Insurance Regulatory and Development Authority of India (Irdai) will soon be releasing new regulations for brokers as the demand for insurance broking is growing steadily with 428 brokers in the industry as on today.
Insurance Regulatory and Development Authority of India (Irdai) will soon be releasing new regulations for brokers as the demand for insurance broking is growing steadily with 428 brokers in the industry as on today, according to TS Vijayan, Irdai chairman. He said that the insurance industry is active and is growing in double digits across segments and the growth is being fuelled by increasing adoption of technology and digitisation of insurance processes for the benefit of the customers. Addressing the 14th Insurance Brokers Association Summit (IBAI), he said, “We have sent the new broker regulations for the Gazette notification with some changes. It will be out soon. The redrafted regulations will help in governing the brokers and maximize value for the policy holders.” He said that brokers must make claim settlements more transparent by adopting technology and asked them to improve insurance penetration across cities. Life insurance has not even touched 4% and general insurance is much lower, he said.
He emphasised on the role of technology push in the insurance sector. “Digital push is required. Lead the industry with cutting-edge technology, develop apps and reach out to more customers,” he told the insurance broking community. The growth of Indian insurance industry is encouraging after opening up the sector and insurance penetration reaching around 4%. However, the sector can see more growth coming from areas such as motor, health and life insurance going forward, he said.
Besides, GST and demonetisation have led to formalisation of economy. When formalisation happens, it helps industry like insurance, he added. Sanjay Kedia, president of Insurance Brokers’ Association of India (IBAI), said that the role of the broker was increasing in a range of transactions in the insurance market. The non-life insurance premium crossed Rs 1,28,129 crore in FY17 with a growth of 32.9% over FY16. Of this, Rs 30,000 was placed by the brokers. Insurance penetration for non-life industry in the country stood at 0.77% in 2016. The total gross domestic premium contribution by insurance brokers for non-life was at Rs 30,442 crore during FY 2016-17.
“The demand for insurance broking has been growing with 428 brokers in the industry as of today. The projected growth of non life insurance in terms of GDP is 17% around Rs 400,000 crore. Insurance broking to contribute around Rs 160,000 crore, Kedia said. “An insurance broker is the only distribution channel representing policyholders. Technology, data analytics and brokers’ role in claim distribution (which is not present in India today) would be game-changers, going forward.”