We have all read headlines like “Bima Sugam to be a game changer for insurance” in print media and on various websites in the past few days. The IRDAI chairman along with other insurance experts has quoted various times about how Bima Sugam will disrupt the digital distribution of insurance in India. According to many reports, IRDAI has further set up a 24-member committee to develop and suggest an affordable and comprehensive cover for the rural population through the Bima Vahaak and Bima Vistaar schemes.
Bima Vaahak is a woman-centric insurance distribution channel that will aim at promoting trust and building awareness about insurance products in the rural parts of India. Similarly, Bima Vistaar will aim to provide wide coverage for rural India in the event of natural disasters, such as floods, and earthquakes, to name a few.
So what is the whole story about Bima Sugam and how will the common man at home benefit from it? To find out, let's take a look at the events that have taken place in the last few weeks.
The Insurance Regulatory and Development Authority of India (IRDAI) has recently provided the approval for Bima Sugam which literally translates to ‘Easy Insurance’. The regulator has notified and asked all insurance providers in the country to be a part of Bima Sugam by January 2023 which can lead to the biggest reforms in the Indian Insurance Sector. The IRDAI is promoting various regulatory reforms that aim at achieving the goal of ‘Insurance for all’.
Compare and buy the most suitable Life Insurance Plan from the below-mentioned IRDAI-approved Life Insurance companies.
Bima Sugam will be a one-stop shop, an electronic insurance platform. Imagine Amazon, Nykaa, or Myntra for all your fashion, beauty, and daily requirements. Fascinating isn’t it? A centralized marketplace for insurance where all insurance products of different insurance companies will be available. It basically translates to easy access under a single roof to insurance agents, brokers, banks, and even aggregators like PolicyX. Insurance aggregators across the country will act as bridges and facilitate the hassle-free purchase of insurance policies through Bima Sugam for customers. Individuals can buy a life, motor, or health insurance policy through Bima Sugam.
Bima Sugam will be responsible for the sale, servicing, and claims management attached to these insurance policies. The prime motive for launching Bima Sugam is to ensure that insured individuals don’t need to visit so-called home branches to avail of insurance-related services. With insurance usually being complex in nature most people are still apprehensive about purchasing any form of insurance online. With technology hopefully reducing distributor margins, policyholders might benefit from cheaper premiums. Premiums on the Bima Sugam platform for Life Insurance and General Insurance should be lesser. Additionally, IRDAI may also provide discounts for the policies purchased via the platform.
On the platform Bima Sugam, the insurance holder will have their own E-Bima accounts where all their respective insurances will be displayed be it health, life, motor, general fire etc. The policyholder can access them whenever or wherever he/she wants to. Bima Sugam will also provide the following services to the policyholder:
Bima Sugam further will help policyholders to access and monitor all their policies on one platform allowing them to make premium payments, change contact details, nominee details, and more. The conversion of policies from physical paper format to e-format will benefit policyholders and reduce the risk of theft and loss of the respective policy. The platform will also be of great service to IRDAI in recognizing fraud and ill practices in the insurance sector.
Bima Sugam can be onboarded by insurance companies as it will be plug-and-play with an API (Application programming interface) interface. IRDAI Chairman, Mr. Debashish Panda also states that policyholders will be able to buy the product through assisted mode, or directly.
According to reports the initial capital for the platform will likely be Rs. 85 crores. Bima Sugam will majorly be funded by insurance companies. Moreover, life insurance companies will hold a 30% stake in Bima Sugam and another 30% stake is likely to be held by general insurance companies.
It is an unspoken truth that given the low penetration of insurance in India, Bima Sugam is a step in the right direction. The platform will act as a flag bearer of trust for consumers facilitating them with the convenience of services available on a single screen backed by the Insurance Regulatory Body of India.