Page 157 - India Insurance Report 2023- BIMTECH

India Insurance Report - Series II 145

with their target audience via various social media platforms to communicate important messages about
awareness. They employ visually appealing advertisements to underscore the significance of insurance
in various aspects of life. Even government entities are utilizing these platforms, including specialized
channels for farmers, making it easier to reach rural populations. Consequently, people increasingly
recognise the importance of protection and are increasingly open to acquiring it, a sentiment further
reinforced by the impact of the COVID-19 pandemic and its associated challenges.

2.2.Simple Products

One of the challenges in expanding insurance coverage in rural areas stemmed from the abundance
of insurance policies with complex proposal forms and intricate terms and conditions. These terms
often caused confusion and were frequently used against policyholders when making claims. The IRDAI
took a bold initiative to address this issue by introducing straightforward, easy-to-understand standard
insurance products that cater to the needs of the masses. These standardized policies now cover various
aspects, including term life, annuity/pension, health, and business protection for SMEs. While these
plans were not specifically designed for rural areas, they serve the greater good and are now available for
purchase. This initiative has effectively curbed the possibility of fraudulent sales and protected
policyholders’ interests, instilling confidence among the rural population. Insurance companies have
been advised to promote the sale of these standardized policies in rural settings.

2.3.Rural Financing / Banking Institutions in Insurance Distribution

Prior to the opening up of this sector, only authorized agents or company officials had the authority
to sell insurance policies. This used to be a limiting factor in terms of expanding the reach of insurance
services. However, various regulations have since enabled banks, micro-finance institutions, regional
rural banks, and even technology-driven lending institutions to offer insurance policies to their clients.
This particular arrangement has proven beneficial for these institutions as it allows them to quickly
provide the appropriate insurance coverage to borrowers. This coverage can take the form of life insurance
for personal loans or insurance for the asset for which the loan is being granted. In the case of business-
related loans, suitable insurance coverage is also arranged. Micro-finance institutions and regional rural
banks have established a strong presence in rural areas and are making significant strides in extending
insurance coverage.

2.4.Technology Driven Distribution Outlets

Ensuring a seamless and effortless experience for policyholders during both the purchase and claim
process of their policies is crucial for instilling confidence throughout the entire insurance value chain.
Historically, this has been a cause for concern, but thanks to advancements in technology and connectivity,
this issue is now being effectively addressed. The government’s significant push towards digitalization
has further accelerated these efforts.