Insurance's UPI Moment: Bima Sugam To Make Life Easier For Policyholders

All consumer services related to insurance policies will soon be available at the click of a button and on a common platform.

Bima Sugam, the electronic marketplace touted as the UPI moment for insurance, is a step closer to rollout. The insurance regulator's brainchild is set to simplify buying, grievance redressal and claim disbursal for policyholders.

"Bima Sugam will be a one-stop shop for sales, service and claims," Debasish Panda, chairman of the Insurance Regulatory and Development Authority of India, said at a conference in 2022. The platform providing an "end-to-end digital journey", he had said, would be a "gamechanger".

The Insurance Regulatory and Development Authority of India, in its 125th Board Meeting, approved the IRDAI (Bima Sugam—Insurance Electronic Marketplace) Regulations, 2024.

Under this, a not-for-profit company would be formed under Section 8 of the Companies Act, 2013, to facilitate, develop, operate, and maintain the marketplace for providing various services to insurance stakeholders.

• All general, health and life insurance policies would be listed on the platform.

• The platform would allow tech-based insurance distribution.

• Individuals would be able to buy life, motor or health insurance policies and raise service requests and claim requests through the portal.

• Customers would not be charged for availing services from Bima Sugam.

• The use of technology and (availability of) data is expected to reduce the cost of intermediation (commission).

Vighnesh Shahane, managing director and chief executive officer of Ageas Federal Life Insurance, told NDTV Profit that the platform could yield two main advantages:

• Convenience of services on a single screen.

• Lower premiums. Currently, 30–40% commission is given to brokers, but with Bima Sugam, the commission will be down to 5–8%, ensuring that the benefit will be passed on to the customer.

Also, if a customer has four policies from different insurers, in the event of an unforeseen circumstance, the nominee would be able to access and raise requests and claims all at the click of a button from a single platform, Shahane explained.

However, for Bima Sugam to be fully functional, all insurance policies would be required to be dematerialised, he said.

While the regulations for setting up Bima Sugam have just been approved, the concept draft of the actual platform and its features is awaited. Exact details of the functions, the expected reduction in costs, and commissions would follow in the months to come.

Overall, the regulations are in line with the regulator's objective of "Insurance for all by 2047", that is, the platform is expected to bolster the sale of insurance to address the huge protection gap in India and help individuals be covered for their lives and assets.