Page 24 - The Insurance Times February 2026

reporting insurance contracts, enabling investors, Finally, the global shift toward open insurance ecosystems-
regulators, and policyholders to better understand an where data can flow securely across insurers, intermediaries,
insurer's financial health. Although India is still in the process and service partners, is changing how customers engage
of determining how best to adopt or adapt IFRS 17, the shift with the industry. Open insurance enables smoother on-
represents an opportunity to modernize financial reporting boarding, more accurate pricing, and highly personalized
and build investor confidence. Globally, regulators are also protection solutions. With India's expanding digital public
differentiating between prudential regulation (protecting infrastructure, the country has a unique opportunity to build
the financial system) and conduct regulation (protecting an open insurance system that blends innovation with strong
consumers). In mature markets, these two functions operate data protection. Leveraging this could accelerate financial
distinctly. In India, however, conduct challenges are often inclusion while preserving trust and transparency. India is
addressed with prudential tools, creating confusion and already experimenting with highly integrated platforms like
occasionally leading to disproportionate reactions. Aligning India Stack , UPI , Sahmati ( account aggregator), India
with global best practices will require clearer separation, health stack and even National Health Claims Exchange
sharper regulatory focus, and enhanced supervisory (NHCX). The regulator IRDAI , itself is pushing the agenda
capacity. of Bima Trinity with Bima Sugam , an insurance marketplace
being the central theme of it. All these digital development
Beyond solvency and reporting reforms, global markets are would need for operational resilience discussed before.
also moving toward more proportional, risk-sensitive
regulation-where the intensity of supervision depends on an The Counter-Narrative: Leveraging
insurer's size, complexity, and risk profile. This approach
eases the compliance load for smaller players while still 'Immaturity'
keeping a close watch on larger, systemically important While many argue that India should aspire to match the
ones. EU's Solvency II and China's C-ROSS (China Risk oriented maturity levels of western insurance markets, an equally
Solvency System) are good examples of such frameworks. compelling view suggests that India's relative "immaturity"
As India's insurance sector continues to grow and diversify, may in fact be its greatest advantage. Traditional markets
a similar model could help maintain balance-supporting in Europe and the U.S. evolved over decades-often weighed
innovation while ensuring stability, especially as digital-first down by legacy systems, paper-heavy processes, silo-ed
insurers and niche specialists enter the space. data, and entrenched distribution models. Indian insurance
, by contrast, is relatively a new sector with majority of the
Another major trend globally is the focus on operational insurance companies getting operational in last 10-15 years
resilience. Regulators now expect insurers to be prepared with much advanced technology platforms compared to
for cyberattacks, technology breakdowns, climate events, Government owned insurance companies which operated
and risks stemming from third-party partners. With India's in pre-opening up era. This provides an opportunity to bypass
insurance ecosystem becoming more digital by the day, the the historical constraints and build a modern insurance
need for frameworks that look beyond financial solvency and ecosystem from the ground up, powered by its technological
instead address the resilience of systems, processes, and strength, and expansive digital public infrastructure.
supply chains, will only increase. Setting clearer standards
around cybersecurity readiness, cloud management, and Insurance is, at its core, a data- and math-driven business,
disaster recovery would go a long way in strengthening trust two domains in which India already demonstrates global
in the sector. leadership. This creates room for India to build AI-driven
underwriting engines and real-time risk assessment models
Additionally, Climate and sustainability requirements are that can outperform many mature markets still constrained
reshaping regulations worldwide. Regions like the EU and by fragmented data architectures. Early examples are
UK have already introduced climate stress tests, mandatory already visible: health insurers using AI to automate pre-
ESG disclosures, and guidelines for green investments. Given authorizations, motor insurers deploying telematics for
India's rising climate vulnerabilities, integrating climate risk usage-based pricing, and agri-tech firms experimenting with
assessment into underwriting, pricing, and capital planning satellite-based yield estimates to support crop-insurance.
will be crucial. Doing so not only strengthens balance sheets
but also fuels the development of climate-responsive India is also well placed to lead in the next wave of insurance
products, from parametric solutions to agricultural & micro- products. Parametric covers,like policies that pay out
insurance. automatically when rainfall drops or floods cross a certain

22 February 2026 The Insurance Times