Chennai: Ever heard of a sectoral regulator giving targets for the industry as a whole and also for the individual players? Well, it happened in the insurance sector with the Insurance Regulatory and Development Authority of India’s (IRDAI) Chairman Debasish Panda, at his meeting with the heads of non-life and reinsurance companies at Hyderabad on Friday. “The IRDAI is now looking at the market developmental role.
All these years, the Authority was carrying out the regulatory role,” a senior industry official told IANS preferring anonymity. Pointing out the low penetration of the non-life sector in the country – about 1 per cent- two decades after opening up the sector, Panda said the global average of insurance penetration is 4.16 per cent. He said the target penetration rate is 2.52 per cent by FY27 and it means the Indian non-life sector would grow from Rs 2.20 lakh crore premium from FY22 to a whopping Rs 11.73 lakh crore by FY27. Panda also listed the target for all the non-life insurance companies.
At the meeting, Panda sounded like a consultant or a CEO of an insurance company but certainly not like a sectoral regulator. Target the low-hanging fruits, he told the insurers and also cited a couple of low-hanging ones. For instance, he said the balance in the 45 crore Jan Dhan accounts – that started with zero balance some years back- is now about Rs 1.5 lakh crore. Similarly, the central government gives Rs 6,000 per annum to small and marginal farmers.
Asking the industry to chalk out strategies to tap these segments which in turn would increase insurance penetration amongst the rural segments, Panda said there should be an information technology interface between the insurers and the bankers. The regulator also said, once the software interface between the two organisations is there, then the certificate of insurance could be sent to the policyholders. He said nominees of many policyholders who had died of Covid were not aware of the insurance policy taken by the deceased from the banks.
Panda said the IRDAI will involve itself in sorting out the regulatory issues by taking up the matter with the Reserve Bank of India (RBI) if need be. The IRDAI Chairman also told the industry captains that the Authority is on mission mode on the following: -developing and implementing risk-based supervisory with a knowledge partner; -establishing a framework for risk-based capital in two to two-and-half years’ time; -strategies for implementing applicable IFRS/Ind AS accounting standards; -developing an ecosystem for InsureTech and -strengthening the policyholder grievance redressal mechanism and naming it as Bima Bharosa.
Panda also said onboarding of new players will be made easy with a ‘no objection certificate from IRDAI to go to the Registrar of Companies to incorporate the company will be automatic. He said a two-member facilitation cell at IRDAI will be formed.
The cell will handhold the investors. The IRDAI Chairman also said a new intermediary channel ‘Bima Vahak’, a community-centric one will be formed. The channel will be women-centric and technology-enabled.