Defining year for insurance industry’s future course 

Insurance industry consolidates in 2023, regulator IRDAI focuses on reforms, tech & rural India; customers, tech & regulator initiatives shape year.

For the insurance industry, the year 2023 was one of consolidation as insurers took guard afresh after the pandemic, course correction amid growing emphasis of regulator IRDAI on reforms and renewed focus on transformation aided by technology, affordable products as well as measures to reach out to rural India.

At the heart of the developments were customers, untapped growth potential the country offered and the goal of insurance for all by 2047 pursued by the Insurance Regulatory and Development Authority of India (IRDAI).

Much of the year was defined either by measures rolled out or proposed by the regulator, be it preparing the ground for the insurance trio of Bima Sugam, Bima Vahak and Bima Vistaar introduction; designating lead insurers for each State under the State Insurance Plan; revision of customer information sheet; and extending the scope of the ‘Use and File’ procedure to more life insurance products. Changes to rules on commission payouts as well as management expenses; modifications to surety insurance guidelines; and products for persons with disabilities, HIV/AIDS and mental illness also figure in the list.

“The changing customer needs presented the industry with an opportunity to innovate... the year also saw an expanded scope of categories like OPD in health insurance, women-centric term insurance policies and NRI-specific products,” said Sarbvir Singh, Joint Group CEO of PB Fintech, the parent company of insurance aggregator PolicyBazaar.

There was also an increased focus on technology towards facilitating seamless customer experience. Right from discovery, purchase to claims, technology has reshaped customer experience and made insurance more accessible for tier-2 and 3 cities too, he said.

Bajaj Allianz General Insurance Co MD and CEO Tapan Singhel said “the year 2023 was significant for the general insurance industry, as primary industry-defining initiatives were envisioned during the year. The sector sustained impressive double-digit growth throughout the year, marked by innovative initiatives from regulators and insurers. Introducing Expense of Management (EOM) norms for non-life insurance companies was a crucial step for insurers and customers.”

There were also challenges for the insurance industry from the government decision to remove tax exemptions for non-linked life policies with premium above ₹5 lakh to the spate of natural calamities, be it the landslides in Uttarakhand to floods in north India and Sikkim as well as Cyclone Michaung and Biparjoy.