Bima Sugam – India’s Insurance E-Marketplace

The Insurance Regulatory and Development Authority of India (IRDAI) has issued draft regulations to establish Bima Sugam as a not-for-profit entity to serve as an online insurance marketplace catering to all stakeholders.

Objective

By promoting transparency and collaboration, Bima Sugam aims to democratize insurance access using technology and achieve the vision of “Insurance for all by 2047″

Key Features

• Non-Profit Status

As per the 2024 Regulations, Bima Sugam is incorporated under Section 8 of the Companies Act as a non-profit with focus on public service over profits or shareholder returns.

• Zero Charges

Importantly, Bima Sugam cannot charge consumers any fees for availing services on its platform. Revenue would come from other sources ensuring affordability.

• Data Privacy

It cannot store customer data, preventing misuse. The board must have data privacy protection policies, ensuring security.

• Governance Framework

The board overseeing operations has IRDAI nominees plus the CEO. Shareholding of the company will be widely held amongst life, general and health insurers, with no single entity having controlling stake. Shareholders shall contribute to capital as and when required.

The IRDAI will nominate two members to the company board, which will appoint a chairperson and CEO. The appointments will have prior regulatory approval. The board will also have a risk management committee.

• Sustainable Finances

Shareholders would infuse capital if needed. Revenue models ensure self-sustainability over time by value generation.

Benefits of Marketplace

Bima Sugam integrates the entire insurance ecosystem onto a single portal. This online platform would make discovering, comparing and purchasing insurance simpler through greater transparency.

India’s Insurance Market

India is expected to be the sixth largest insurance market by the year 2032. The life insurance sector in India is predicted to record a compound annual growth rate (CAGR) of 12.5% from Rs 9.0 lakh crore in 2023 to Rs 14.5 lakh crore in 2027, in terms of gross written premiums.

Category: Economy & Banking Current Affairs - 2024