The registration process of new companies has been eased by substantially reducing the time taken to process new applications from 6-8 months to two, Debasish Panda, chairman, Insurance Regulatory and Development Authority of India (Irdai) said on Wednesday.
The regulator has created a facilitation cell consisting of two officers for handholding the applicants so that the entity gets its approval to start its operations. “We have put up a guidance document to make it easier for new applicant so that there is room for an additional query,” Panda said speaking at a CII event.
This is one among the many steps taken by the regulator to promote ease of doing business in the insurance sector. Panda is of the opinion that the insurance is no longer at a nascent stage and therefore it was time to give the player more flexibility and freedom to operate.
“Thereby, we are moving from a rule-based regulatory regime to a principle-based one,” Panda said.
The insurance industry is poised to grow at an accelerated pace. Insurance premiums as a percentage of gross domestic product (GDP) have doubled in the past 10 years. According to Irdai data, insurance penetration in the country is at 4.2 per cent as of 2021, which is higher than China, but lower than developed countries.
“We are not satisfied with where we are and want to catch up not only with the world average but also with the developed countries,” Irdai chairman said.
The regulator has given steep aspirational growth targets to life and non-life companies to increase the insurance penetration in the country. As of 2022, India’s insurance industry has a gross written premium (GWP) of $115 billion. The regulator intends to grow India’s GWP to $500 billion by 2027, a growth of 34 per cent over the next five years.
“We have kept an aspirational growth target of 34 per cent. And I am glad to inform that many CEOs are quite ecstatic about these targets, and they are all raring to go,” Panda said.
Among initiatives that the regulator intends to take to further propel growth in the sector is to encourage insurers to get themselves onboarded on “Bima Sugam” a digital platform for selling, servicing, and settling claims. It is a plug-and-play solution with an API interface.
“I presume this (platform) would be a game changer as far as insurance is concerned,” Panda said.