Suresh Mathur, Managing Director, Institute of Insurance & Risk Management, was the chief guest at InsureNext 2024. Edited excerpts of his keynote address:
There are so many regulatory changes which are coming up. Post Mr. Debashish Panda taking over charge as IRDA Chairman, the insurance sector has renewed the hope of sustainability and growth in the future. We are all aware of the various initiatives the regulator has taken up to deepen insurance penetration.
There has been a lot of talk on insurance penetration and I will give a little brief of it for achieving universal coverage by 2047. Needless to say, universal coverage can happen when there is disruptive approach – both in terms of policy and digital transformation. Sensitizing people to the tasks that are required to achieve this goal is a prime aspect.
Courtesy of the digital transformation, the boundaries between banking, financial services and insurance are getting aggregated – leading to a comprehensive approach towards scaling up the emerging challenges. India presents a wealth of opportunity due to the significant low penetration rates in both the life and general insurance. Despite being the 10th largest life insurance market in the world and 15th non-life insurance market globally, the sector’s growth has been gradual.
IRDA predicts Indian general insurance premiums will reach 2.5% of GDP by 2032, with global premiums exceeding $7 trillion in 2022. The insurance technology sector is thriving thanks to simplified product launches and expansion into unreserved areas. In India, there are 24 life companies at present and 34 non-life companies and non-life segment is under 1% demanding strategic growth.
There is ongoing consolidation in both the life and general insurance domains. According to data from IBF, the Indian insurance industry currently stands at a substantial $280 billion. The life segment is projected to experience a growth of around 12-15% over the next 3-5 years.
IRDA chairman has prioritized insurance for by 2047 with 3 As, which are availability, affordability and accessibility of insurance for all. Then he is pursuing products for gig workers, street vendors, food aggregators, farmers, paper makers, etc. And then he has also talked about the Bima Trinity, which is Bima Vistar, which encompasses 3 insurances- term insurance, health insurance for the families and also for the dwelling.
Bima Sugam, a platform which will enable access to insurance market. Bima Vahak will ensure that the women workforce also engages and involves themselves into insurance selling. All the insurance companies have been allotted states where they have to actively involve themselves.
The following areas would be in the focus for the regulator – the intersection of digital insurance and regulation, consumer protection, data focus and so on. Customer portals are expanding, advanced modeling techniques are being leveraged. The insurance industry and its regulators are now taking cyberattacks seriously.
Then digital assets advancement of blockchain, cryptocurrency and other items that are part of digital assets ecosystem has exponential growth in recent times. The regulators are concerned about the customer protection, economic losses and also the consumer education. ESG – environmental, social and governance – will remain a central focus for the regulators in the years to come.
We expect the insurance councils and the government will also continue to assess the impact of climate change on the insurance industry and explore increased regulation in these areas like the disclosure, risk and resiliency. Periodically we need to take review to assess, to have mid-course correction. Thank you.
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