Page 11 - The Insurance Times August 2025

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Govt May Expedite Stake Sale in Insurance PSUs to IRDAI Unlikely to Crack
Meet SEBI Norms Down on Bancassurance

The finance ministry is planning to offload at least half of its required stake Despite Misselling Con-
in New India Assurance Company and General Insurance Corporation of In-
dia (GIC Re) in FY26 to comply with the Securities and Exchange Board of cerns
India's (SEBI) minimum public shareholding (MPS) norms. The Insurance Regulatory and Devel-
Currently, the government holds 85.44% in New India Assurance and 82.4% opment Authority of India (IRDAI) is
in GIC Re, significantly above SEBI's mandated 25% public float for listed unlikely to take coercive action against
companies. A senior government official confirmed that efforts will be fo- the bancassurance model despite ris-
cused on meeting MPS compliance during the current fiscal year. ing concerns over mis-selling, providing

The government may explore various market instruments to initiate the di- significant relief to life insurers, par-
vestment process in tranches. These moves form part of broader disinvest- ticularly in the private sector. A senior
ment efforts and are expected to provide liquidity and improve transpar- official said the regulator views the is-
ency and governance in public sector insurance entities, while also attract- sue as "not as alarming as it has been
ing more institutional and retail participation. made out to be," and believes distri-
bution should be facilitated, not man-
Use Data-Driven Strategies suggesting that facts, analytics, and dated.
value-based propositions are more ef- The finance ministry and RBI had ear-
to Attract Millennials:
fective in converting younger popula- lier flagged issues of customer exploi-
IRDAI Official tions. tation, especially forced selling of high-
Highlighting the growing relevance of Insurers have been encouraged to har- premium insurance via banks. In De-
life insurance among India's working- ness digital tools and behavioral data cember 2024, both Finance Minister
age population, Swaminathan Iyer, to align insurance products with evolv- Nirmala Sitharaman and the former
IRDAI's Whole-Time Member (Life), ing consumer expectations and finan- IRDAI Chairman Debasish Panda urged
urged insurers to shift from emotional cial goals. This comes as the sector in- a customer-first approach.
appeals to data-driven strategies to creasingly targets tech-savvy demo-
engage millennials. graphics through personalized finan- Meanwhile, the Department of Finan-
Speaking at a Life Insurance Council cial planning tools, lifestyle-based un- cial Services (DFS) has directed banks
event, Iyer stated that although derwriting, and digitally enabled distri- to ensure affordability and ethical sell-
awareness is increasing, particularly bution channels. Iyer's remarks under- ing. RBI has also announced that it is
among millennials, emotional market- line IRDAI's emphasis on sustainable preparing guidelines to curb mis-selling
ing alone will not suffice. "You have growth and meaningful customer en- of financial products by banks and
to drive logic through data," he said, gagement in life insurance. NBFCs.

10 August 2025 The Insurance Times