Mumbai: India’s Insurance Regulatory and Development Authority is considering a proposal to increase foreign direct investment in the insurance sector from 74% to 100%, with IRDAI member Deepak Sood on Friday in the 17th edition of the Mint BFSI Summit and the awards.
Permission for 100% FDI in insurance can not only open flood phase to the offshore capital to enter India, but can also provide the facility of admission of new foreign insurers, which helps the country to increase insurance entry to achieve the government’s goal of “Insurance for all by 2047”.
India has 26 lives and 32 general insurers, most private sector players work through a joint venture with a foreign partner.
“When we talk about insurance for all by 2047, it means that each person has at least one health policy, a life insurance policy, and a property policy that covers his home and his business. Recently there is a proposal to increase FDI insurance from the government.
The regulator increased the FDI limit in insurance from 49% to 74% in 2021. The plan to increase it align with its goal to widen the access to insurance so that every Indian citizen in the country was covered by some types of insurance by 2047.
Sood said, “Idardi is working on increasing the number of players in the country to have a deep penetration and we can expect more coverage,” Sood said.
IRDAI member said that the government can help in increasing insurance coverage in the country by encouraging tax profit or subsidy offer.
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Innovation for deep coverage
At the Mint BFSI Summit, Sood urged the insurance industry to ensure entry into a deep market, as well as to rethink your distribution model to develop new products to address various requirements and risks.
In the last two years, IRDAI has improved product use and file process to encourage innovation in insurance industry, he said that without increasing wrong sales, an important innovation to increase insurance penetration was that IRDAI’s “Consumer Information Paper” was introduced.
Sood said, “This document in very simple terms gives the key points of coverage (and) the insurance policy that makes the policyholder aware of what he is going to buy.” “There are always a lot of complaints that the customer does not know what he is buying because the details are in the right print. It is especially in the direction that is to solve the issue and makes the customer clear what he is buying.”
Another major initiative is Bima Sugam- “The purpose of an electronic insurance market is the purpose that aims to bring all stakeholders into the price chain on one platform”.
Sood said that insurance was launched to increase efficiency, improve transparency, provide more products, increase services, make deep penetration, and to make the settlement close to all by 2047 to simplify the disposal of claims easier with the ambition of the regulator.
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Health Insurance: Missing Middle
Sood urged India’s insurance industry to increase health insurance coverage in the country.
The insurance regulator has discharged cashless settlements, pre-ordering, and post-ordering duties within three hours of a three-hour claim within an hour of request.
Sood said, “If the insurer fails to follow these criteria, these measures are to make the claim process easier in health insurance. It is supported by a strong complaint handling mechanism,” Sood said.
He said that while government schemes have covered a huge low -income population and high -income people are capable of carrying insurance, the industry was missing from mass.
“We have to work towards bringing a new approach, customized products and developing new functions for distribution in new types of groups and whatever is to be addressed to address this missing medium -income group. Otherwise, a huge population remains without health insurance coverage,” Sood said.
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More reinforces require
Sood also highlighted the need for more domestic re -rebels between emerging geo -political risks and increase in natural disasters.
“… reinforcement market has the ability to decrease. We need to work on ways to increase domestic capacity, which can be brought about the introduction of new players,” he said.
Sood said that the industry needed to reconsider the ways to handle “increasing number and severity of natural terrible events”.
“We need to create capacity and new types of parametical products, which will not only make it easier for people to take insurance against these crises, but will also be able to claim it during such natural destruction.” “We need to expand the reinforcement capacity in this market so that we are able to handle more and more such events and become self -sufficient.”
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Sood said Idardi was working towards starting a risk-based capital regime. “It will benefit both the insurer and the market and provide capital for proper risk. As we look at more and more complex risks, insurers will be able to better use and manage their capital.”
He urged the insurers in India to work better to deal with cyber risks.
Sood said, “The worst thing about cyber risk is that it is not known from where it starts and where it attacks.” “We are carrying equipment in our pockets and this is the way we are exposing ourselves to these risks. We have to develop ways to protect against such risks.”
The face of such a risk will change again with the calculation of quantum “and it will be on us in a much more complex way”, the member of the Irai said. “We need to build measures to protect each person, and if you are killed by it you see that you are preserved through insurance.”
