Page 117 - India Insurance Report 2023- BIMTECH

India Insurance Report - Series II 105

Alongside, an articulation, understanding and profundity around the totality of Insurance Vision is
paramount. The Government of India’s Vision for the Insurance Regulatory and Development Authority
of India (IRDAI) must be to promote “Inclusive insurance”. The idea of inclusion should mean:

- For the Policyholders : When risks and covers are aligned, and customer satisfaction is maximized;

- For the Shareholders (including government) : When they get the optimal Return on Equity;

- For the Larger body of stakeholders (including the public at large) : When they participate
in the growth story of Insurers via equity participation, especially retail investors and;

- For the Indian economy : When the Assets under Management grow healthily and power the
Indian economy.

The Regulatory Accountability following the above Vision will prescribe IRDAI, ensuring the following:

a) Provide Ease of Doing Insurance Business Framework - IRDAI will be required to
declare a clear industry service proposition built on progressive, credible, proportionate, and
responsible regulations, excellence in processes, and technology such that the life of users becomes
better. This is possible when IRDAI assumes and discharges Single Window Ownership;

b) Protect Market Oversight - IRDAI market oversight must include sustainable and profitable
growth of its entities that is valued by all stakeholders. Currently, most of the general insurers in the
country are returning negative underwriting results over a long period of time, which does not leave
them supporting any Research and development for the societal benefits as required and envisioned.

Insurance de-risks governments, businesses and communities. Insurance-led research supports the
case for more resilient infrastructure and institutions, and evolving risk transfer mechanisms ex-ante
form part of a comprehensive disaster management strategy. However, insurance will not be sustainable
if it is offered at rates below what is required by sound, risk-based actuarial practices. When insurance is
not risk-based, the wrong price signals are sent, and there is little or no incentive to mitigate risks. In
turn, this leads to wider adverse impacts on society, such as the degradation of vulnerable environments
and a reliance on emergency funds to help build communities after catastrophic events. Whereas the
Government has an important role to play in helping develop risk mitigation measures and rewarding
adaptation to reduce the overall costs to the economy, the insurance industry has an equally key role to
play in helping build more resilient communities. Since the National Disaster Management Plan (NDMP)
provides a framework and direction to the government agencies for all phases of the disaster management
cycle, it is crucial that the insurance regulator helps prepare the groundwork for a Public-Private
Partnership mechanism between government, business and communities to improve the resilience.

The vision for inclusion beyond penetration is clear: it means not just policyholders but the potential
policyholders.It also means Insurance is required to contribute to the per capita rise of GDP and help
promote its exports. The essential expectation behind this Vision Statement is that the IRDAI will
undertake to create an enabling environment and nudge all other stakeholders along.