Bima Sugam just got approval from India's Insurance Regulatory and Development Authority (IRDAI). The Insurance Regulatory and Development Authority of India (IRDAI) has introduced Bima Sugam in an effort to digitalize the insurance market for the benefit of policyholders. The portal will launch on January 1st, 2023. Bima Sugam will be able to transform digital payments in the nation in the same way that Unified Payments Interface (UPI) did.
What is Bima Sugam ?
Bima Sugam is a one-stop shop for purchasing and selling insurance, as well as for maintaining policies and resolving claims. Insurance providers may join the platform. It'll have an API (Application Programming Interface) interface and be plug-and-play. It will be similar to a shopping centre. You come, select the scheme or product of your liking, and after making a payment, you are a policyholder.
Who will own Bima Sugam and who will get the fund to start it ?
Bima Sugam will require an initial capital investment of about Rs 85 crore. Major stockholders of this insurance platform are predicted to be insurance companies.
Therefore, some general insurance firms will initially own around 30% of Bima Sugam, life insurance companies will own 30%, online PSBs - Public Sector Banks will own 35% and Brokers Association will own 5%.
Who will be the seller and buyer ?
Each and every insurance intermediary, such as individual agents and web aggregators, will have access to "Bima Sugam." Brokers, banks, and insurance agents, as well as aggregators like PolicyBazaar, will serve as intermediaries or "bridges" when it comes to the sale of insurance products to individuals via Bima Sugam.
On this platform, the policyholder and potential clients can select from a wide range of products, businesses, and payment methods. As far as the policyholder is concerned, he or she will be able to purchase the product either through assisted mode or directly.
What are the benefits of Bima Sugam ?
According to Sandeep Jethwani, co-founder of dezerv, commission costs for buying insurance products through the site are probably going to decrease.
Transparent communication and awareness building will also help to decrease mis-selling on the platform. Data analytics, in the opinion of experts, will also increase product offers and data aggregation quality.
Regarding the security of the platform's data feed, IRDAI Chairman stated that Aadhaar numbers will be used for know-your-customer (KYC) and that the data will automatically populate.
The other advantage of the platform is that the customers can use it to file a claim and submit an appeal for grievance redressal.
There are three key advantages for customers and the industry: better access to users' personal information can increase their trust in buying insurance; lower intermediary costs can result in better pricing; and three, longer-term insurance penetration can be advantageous for companies in the field.
The platform's success, however, is dependent on how excellent the user interface is and how easy it is for all stakeholders, particularly policyholders, to use.
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