Insurance sector regulator IRDAI is mulling to bring in uniform discloser norms for both listed and unlisted companies.
“Listing brings more transparency to the working of companies. We thought we will encourage companies to bring in more transparency into their system,” Insurance Regulatory and Development Authority of India (IRDAI) Chairman T S Vijayan said here.
“We are also thinking…even if the company is not listed, we are thinking whether whatever discloser required by a listed company that can also be brought into an unlisted company,” he told reporters on the sidelines of CII Insurance Summit.
Talking about mergers and consolidation in the industry, he said, customer protection is the key and the regulator will ensure that fair treatment is given to them.
“If two companies are merging together, it is nothing new in the Indian insurance industry…when LIC was formed many number of companies merged into it,” he said.
“It is a natural process but we are very clear that customer protection is the key, whatever promises the companies have made to the customer is going to be the key. What reserves they are maintaining for the customers is the key. We will be keen to ensure fair treatment of customers,” he added.
Vijayan further said, there is a need to bring in appropriate products that will suit the customer need in the existing environment.
“There is a huge market available and challenge before the industry will be to bring out the appropriate products, which can be decided with the help of technology, changes in the environment among others,” the Chairman said.
He also pointed out that companies needs to come up with innovative products which will suit the flexible income in order to address the huge protection gap in India.
“There needs to be a flexibility in premium collection, maybe like collecting higher amount during Diwali. Companies have to come out with innovative ideas to address the huge protection gap in India. This to suit fit into flexible income,” he added.
He said, about 80-85 per cent of the decision of buying insurance products is dominated by one particular gender and companies need to come up with such policies that will include equal participation of women.
“One gender is dominating. About 80-85 per cent policies are taken up by one gender, this is one area we need to focus on. One need to think whether the female population, about 50 per cent of the population should be equal part of insurance and what type of polices can be sold and how the need can be generated for that type of policies,” he said.
Talking about Foreign Direct Investment, Vijayan said, after the FDI cap was increased total money received is about Rs 16,000 crore.
“We have received about Rs 16,000 crore after the FDI cap was increased to 49 per cent from the earlier 26 per cent. When this reinsurance branch will start we will see some substantial money coming in,” he said.
IRDAI has given its initial approval, known as R1 in regulatory parlance, to four global players.
When asked about the industry performance this year, Vijayan said that “it has been good this year and we expect it to be better than last year. Last year the life growth was 18 per cent and non life was 13 per cent.”