Chennai, July 2 (IANS): Have you ever heard of an industry regulator setting targets for the industry as a whole and also for individual players?
Well, it happened in the insurance sector with the Chairman of the Insurance Regulatory and Development Authority of India (IRDAI), Debasish Panda, during his meeting with the heads of non-life insurance companies and reinsurance in Hyderabad on Friday.
“IRDAI is now looking at the market development role. All these years the Authority has played the regulatory role,” a senior industry official told IANS, preferring anonymity.
Highlighting the low penetration of the non-life sector in the country – about 1% – two decades after the opening of the sector, Panda said that the global insurance penetration average is 4.16%.
He said the target penetration rate is 2.52% by FY27 and that means the Indian non-life sector would grow from Rs 2.20 lakh crore premium in FY22 to a whopping Rs 11.73 lakh crore d here FY27.
Panda also listed the target for all non-life insurance companies.
At the meeting, Panda sounded like a consultant or CEO of an insurance company, but certainly not an industry regulator.
Target low-hanging fruit, he told insurers and also cited a few low-hanging fruit.
For example, he said the Jan Dhan account balance of 45 crore – which started with a zero balance a few years ago – is now around Rs 1.5 lakh crore.
Similarly, the central government gives 6,000 rupees a year to small marginal farmers.
Calling on the industry to develop strategies to tap into these segments which in turn would increase insurance penetration among rural segments, Panda said there should be an information technology interface between insurers and bankers.
The regulator also said that once the software interface between the two organizations is in place, the insurance certificate could be sent to policyholders.
He said the applicants of many deceased Covid policyholders were unaware of the insurance policy taken out by the deceased with the banks.
Panda said IRDAI would get involved in resolving regulatory issues by raising the issue with the Reserve Bank of India (RBI) if necessary.
The IRDAI Chairman also told the Captains of Industry that the Authority is in mission mode on the following:
-develop and implement risk-based supervision with a knowledge partner;
– establish a framework for risk capital within two to two and a half years;
– strategies for implementing the applicable IFRS/Ind AS accounting standards;
-develop an ecosystem for InsureTech and
-strengthen the mechanism for reparation of claims by policyholders and name it Bima Bharosa.
Panda also said onboarding new players will be facilitated by a “no objection certificate” from IRDAI to go to the Registrar of Companies to incorporate the company will be automatic.
He said that a two-member facilitation cell at IRDAI will be formed. The cell will hold the investors.
The IRDAI President also said that a new community-focused mid-channel “Bima Vahak” will be created. The channel will be female-centric and tech-enabled.