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IRDAI Chairman: 70 Insurers Insufficient for 1.4 Billion People; More Needed

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IRDAI Chairman: 70 Insurers Insufficient for 1.4 Billion People; More Needed

Insurance Regulatory and Development Authority of India (IRDAI) Chairman Debasish Panda on Tuesday said there is a need for more insurance companies in the country, as the existing players are not enough to cater to the 1.4 billion population.

Highlighting the importance of public listing, Panda said the regulator will engage with some insurers to go public as it brings in value for investors and policyholders.

“What we are currently looking at is how do we have more number of players. Possibly, 70 players are not enough for a size (population) of 1.4 billion,” Panda said while addressing the CII Insurance and Pension summit.

The regulator is also making efforts to bring in more capital to the sector because insurance is a capital-intensive segment. He said there was a need for more capital to come from domestic resources and foreign direct investment into the insurance sector.

The insurance regulator has removed entry barriers for floating an insurance company. Now, private equity players, institutional investors, venture capitalists and family offices can become investors or promoters of an insurance company, and can also exit easily, he said.

The regulator is focussing on speedy approvals of applications for floating an insurance company.

“We have kept an internal benchmark that between two board meetings, we want the proposals to be cleared, which would be a time gap of 90 days. Even if somebody submits a proposal well before that, we would be willing to take a call,” Panda said.

He said already new players have entered into the insurance sector, and there were a few more in the pipeline. During recent roadshows held in Japan, Europe and America, the regulator has witnessed keen interest from many global insurance companies and investors to enter the domestic insurance market, he said.

On listing, Panda said a large number of insurance players should strive to become public.

“Companies after a particular age should get listed. We have been softly nudging them that after reaching a particular level and growth, they should go for listing. It will bring in more disclosure and transparency, and will bring value for policyholders and investors,” he said.

The Chairman said a few insurance companies are already in the process of approaching the markets regulator, the Securities and Exchange Board of India (SEBI), to seek permission for listing of their shares.

He said the regulator has made the process very seamless, in terms of providing a no objection certificate, for an insurance player to approach the markets regulator for listing.

“We are now going to engage with a few of them (insurance companies) who we feel are ready to go for listing,” he said.

Panda emphasised that an attempt is needed to involve every stakeholder to make inclusive insurance a reality. This, he said, would require a more collaborative approach amongst the government, the regulator, insurers and tech companies.

“In this direction, a state-level insurance plan has been formulated wherein each insurer has been entrusted with the responsibility of increasing insurance inclusion in the assigned state or the union territory,” he said.

To maximise this initiative, insurers should consider establishing more physical presence while also enhancing the number of digital touch points. He also asked insurers to focus on designing products as per the specific requirements of the assigned states, as it would ensure that relevant products were available and accessible to all regardless of the location.

Panda said the implementation of the Bima Trinity was in the advanced stages. The Bima Trinity includes Bima Sugam, the digital platform, Bima Vistaar, a comprehensive cover for the rural population, on benefit based / parametric structure and Bima Vahak, a women-centric distribution channel which would focus on reaching untapped/rural areas.