Ever since the liberalisation of the Indian insurance market at the turn of the 21st century, there has been widespread transformation across the domestic insurance landscape. This is especially true for the Indian life insurance market, which is ranked seventh globally in terms of premium income, where a combination of increasing technology integration and supportive regulatory reforms have fuelled robust business expansion over the past 24 years. As a result, the Indian life insurance industry today contributes to ~70% of the total insurance business in the country and is playing a pivotal role in increasing insurance coverage across different demographic segments. In this regard, key regulatory changes and customer- centric measures introduced in 2024 have the potential to further increase Customer Trust, in turn supporting the larger mission of achieving ‘Insurance for All’ by 2047.
Key regulations that serve to empower policyholders
With India projected to become the sixth-largest insurance market in the world by 2032 in terms of total premium volume, the Insurance Regulatory and Development Authority of India (IRDAI) has been reviewing and consolidating many provisions to encourage insurance adoption. In June 2024, it introduced key amendments through its Master Circular on Life Insurance products, all in an effort to make life insurance products simple, transparent and easy to understand for the bulk of India’s population. The insurance regulator has exhorted insurers to offer products with flexible premium payment frequencies and even bolstered the grievance redressal mechanism to safeguard
policyholders against erring insurers. To simplify the insurance purchase experience, a quick snapshot of policy benefits, terms and conditions and an enhanced Free Look period have been implemented that should support prospective customers in better decision-making. Additionally, features such as partial withdrawal under pension products, the facility of policy loans across all life insurance savings products and the option
to opt for health riders without surrendering existing policies have improved the attractiveness of life insurance products as investment cum protection instruments.
How insurers have focused on customer-centric expansion strategies
In order to facilitate improved customer value delivery and increased insurance penetration, the regulator has empowered insurers to make decisions on product innovation and delivery through their respective Board constituted Product Management Committee. This simplified product clearance process along with its focus on curbing insurance mis-selling has translated into more personalised insurance products hitting the market, enhanced transparency in service delivery and improved customer experiences; delivered through insurance agents, corporate agents, and other intermediaries. Similarly, the IRDAI’s Bima Trinity initiative expected in early 2025 should boost insurance access and insurance penetration even further. In fact, the introduction of the affordable benefits-based Bima Vistaar insurance product, women- driven Bima Vihaak sales channel and Bima Sugam electronic marketplace could revolutionize the insurance landscape in the near future.
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On their part, life insurers have been increasingly integrating advanced technologies and data- based analytics to streamline their underwriting processes, introduce hyper personalisation features and give more power to the hands of policyholders when purchasing life insurance. Innovation is leading the way in life insurance product development for investors looking to diversify their portfolio while also securing their loved ones with comprehensive life protection. As a result of this innovation focus, life insurers are pursuing customer- centric growth strategies that are destined to enhance insurance coverage; even as they enhance financial reporting standards to improve compliance and accountability standards on par with international peers.
Sustaining the growth momentum in 2025 & beyond
As life insurers remain committed to the path of technology-driven transformation, policyholders can expect more convenience features to be added and new hybrid insurance products to be launched in the new year as well. While the rapid pace of digitalisation within the life insurance industry should enhance operational efficiencies even further, policyholders will ostensibly benefit from reduced process lead times and improved underwriting processes across the life insurance value chain. What’s more, with the Union government mulling over increasing the Foreign Direct Investment (FDI) limit in the insurance sector to 100%, the Indian insurance sector could witness significant capital inflows that should augur well for further product and market expansion. The cumulative impact of these transformative changes should increase customer trust and overall experience standards; promoting more Indians to secure themselves with comprehensive life insurance protection and ultimately reflect in greater socio-economic progress for years to come.
Views expressed by Nilesh Parmar, COO & CTO at Future Generali India Life Insurance.
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