If innovative products by public sector can unleash democratisation of insurance distribution then there are clear lessons for the private sector insurers to draw upon their innovative product design skills and emerge even more impactful for consumers. Ajay Seth, chairperson, Insurance Regulatory and Development Authority of India (IRDAI) articulated this and more at the just concluded Financial Express Insurance Summit, 2025 in Mumbai.
‘Insurance for all needs radical rethinking’
Be it the postal department’s Rural Postal Life Insurance or some popular government schemes like PM Jeevan Jyoti Bima Yojana, an affordable life insurance scheme or the PM Suraksha Bina Yojana, an accident insurance scheme, an eye on customer-centricity seems to matter.
In tune with the goal to get to insurance for all by 2047 when India gets to celebrate its first 100 years since independence, IRDAI chairperson Ajay Seth says, “universal insurance coverage demands radical rethinking of what constitutes a viable insurance product.”
Referring to some “institutional priorities,” in the journey ahead for the sector, he sees an increasing need for all to “operationalise customer centricity in all functions” – be it product design, accommodating diverse customer profiles, in claim settlement standards, while enforcing timely resolutions or when dealing with grievance redressal across all customer segments. This, to him, also means making information available in regional languages.
Arduous journey lies ahead
Ajay Seth, who many industry leaders and fine minds from the insurance sector gathered at the summit regard as a blend of study in caution of a regulator and that of a listening leader who is unambiguously driven by the need to pursue the goal of a truly inclusive growth for the sector, was addressing the first major summit focussed on insurance.
From Seth’s address, many now see where the puck is going on financial literacy leading to informed decision-making by customers. Sadly, Seth says, he finds the industry wanting on this with an arduous journey still ahead. “Today, the industry on the whole collects a premium of about Rs 12 lakh crore while the spending on creating financial awareness was just about Rs 4000 crore,” he says.
He also clearly sees a future that is enabling market participants to experiment with product distribution models and service architecture. Equally critical for the sector is the effort at enhancing the trust levels. This, along with product democratisation and actuarial innovation. The longevity products and indexed coverages are also in need of greater emphasis. On climate and catastrophic risk products, he feels the insurance sector is best suited to provide for adaptation. This, even as the efforts are on to build infrastructure in a manner that can withstand climate change. In the agriculture sector these could also include efforts at climate -resistant seeds albeit all of these will take time. Therefore, the immediate focus would have to be on adaptation with rightly-priced products.
On the crucial question of claims settlements and the delays therein that disturb customers at times, a subject of discussion in a subsequent session at the summit, he says “claim settlement through objective metric lets consumers take informed decisions and an assurance that he or she is getting a risk cover at the most competitive rate with an assurance that the claim will get settled in the most efficient manner.