Why in News?
The Insurance Regulatory and Development Authority of India (IRDAI), as part of its Vision Insurance for all’ by 2047, has allotted states and union territories to every insurer to increase insurance penetration in India.
IRDAI is also planning to launch Bima Trinity – Bima Sugam, Bima Vistar, Bima Vaahaks – in collaboration with general and life insurance firms to make insurance activities hassle free.
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What is IRDAI Vision 2047?
- Insurance for All by 2047 aims that every citizen has an appropriate life, health and property insurance cover and every enterprise is supported by appropriate insurance solutions.
- It also aims to make the Indian insurance sector globally attractive.
- Insurance customers (Policyholders)
- Insurance providers (insurers)
- Insurance distributors (intermediaries)
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- Making available right products to right customers
- Creating robust grievance redressal mechanism
- Facilitating ease of doing business in the insurance sector
- Ensuring the regulatory architecture is aligned with the market dynamics
- Boosting innovation
- Competition and distribution efficiencies while mainstreaming technology and moving towards principle based regulatory regime.
- It can help people in households all over the country to have access to an affordable insurance policy that covers health, life, property, and accidents.
- These policies would offer faster claim settlements, sometimes within hours, and additional benefits like gym or yoga memberships.
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What is the State of Insurance Sector in India?
- According to the Economic Survey 2022-23, life insurance density in the country increased from USD 11.1 in 2001 to USD 91 in 2021. Total global insurance premiums in 2021 increased 3.4% in real terms, with the non-life insurance sector registering 2.6% growth, driven by rate hardening in commercial lines in developed markets.
- According to the Economic Survey 2022-23, India’s insurance market is poised to emerge as one of the fastest-growing markets globally in the coming decade.
- As per the IRDAI, insurance penetration in India increased from 3.76% in 2019-20 to 4.20%in 2020-21, registering a growth of 11.70%.
- Life insurance penetration in 2021 was 3.2%, almost twice as high as the emerging markets and slightly above the global average.
- India is at present the 10th biggest market in the world it is projected to be 6th biggest by 2032.
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What are the Challenges Related to Insurance Sector
- Lower Adoption Rate
- Lack of Product Innovation
- Talent Management
- Slow Rate of Digitalization
- Claims Management
What is IRDAI?
- IRDAI, founded in 1999, is a regulatory body created with the aim of protecting the interests of insurance customers.
- It is a statutory body under the IRDA Act 1999 and is under the jurisdiction of Ministry of Finance.
- It regulates and sees to the development of the insurance industry while monitoring insurance-related activities.
- The powers and functions of the Authority are laid down in the IRDAI Act, 1999 and Insurance Act, 1938.
- To improve the insurance sector in India, several steps can be taken to leverage technology, align with customer behavior, optimize data usage, simplify claims management, adopt hybrid distribution models, and tackle fraud.
- Digitalization should be a priority across the value chain to reduce costs, improve efficiency, and support ecosystem development. This involves using technology to enhance employee skills and productivity through upskilling programs.
- Insurers need to align with dynamic changes in customer behavior and preferences. By offering quick personalized products and prioritizing flexibility over mass offerings, insurers can better meet customer needs and manage perceptions.
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