Page 47 - Insurance Times May 2024

A decade of strong growth for insurance

sector, but miles to go

"Stalemate and obstructionism can't go on in insurance sector. The ULIP regulations of 2019, which tried
perpetuity " Arun Jaitley, Finance Minister in NDA 1, to ensure that insurers follow prudent practices in designing
had said when he was questioned on what was the hurry to insurance products and keep the interests of policy holders
come with an Ordinance for hiking foreign direct investment at heart, is among the most significant. Insurers were also
in insurance sector to 49 per cent when a Bill was pending encouraged to participate in a regulatory sandbox in 2019
in the Rajya Sabha. This had set the tone for ushering in a whose objective was to increase the pace of the innovation
slew of next generation reforms in the sector. in companies. It allowed flexibility in dealing with regulatory
requirements while focussing on policyholder protection. The
The insurance sector recorded rapid growth over the last industry responded enthusiastically and a slew of innovative
decade. New products were launched in nonlife segment and products have been approved in different tranches including
digitisation helped improve reach. 'pay as you drive', a customised vehicle insurance that takes
into account the safe driving habits.
While the life insurance industry recorded a premium income
of Rs. 3.28 lakh crore during 201415, a consistent growth Further, IRDAI has implemented a significant change in the
was seen since then and the industry recorded premium product filing process for the life and nonlife insurers during
income of Rs. 7.83 lakh crore in 2022-23. For the year 2022-23. The transition is from the traditional 'file and use'
procedure (which requires approval from IRDAI before
202324, per the Insurance Regulatory and Development
Authority of India (IRDAI) expectations, the growth could launch) to the 'use and file' procedure (where products can
be around 13 per cent. be launched without prior approval) to assist general
insurers in designing and promptly launching new and
innovative products.
A similar growth trend is also visible in the nonlife industry
as the total premium underwritten surged from Rs. 84,684
The most striking aspect of the insurance industry and
crore in 201415 to Rs. 2.57 lakh crore in 202223 registering
regulator was the quick response to the Covid19 pandemic,
16.40 per cent annual growth.
designing of special products to deal with the crisis with a
specific product centric approach and simultaneous efforts
But the industry has been plagued by misselling in life at standardisation.
insurance segment with investment products linked to life
insurance being sold more than pure life covers. Nonlife From April 1, 2020, shortly before the country could feel the
insurance segment suffers from poor claim settlement and intensity of the peril of the pandemic, a standard health
a host of unhappy customers. While the regulatory reforms cover, Arogya Sanjeevani, was introduced as a solution to
have been addressing these issues over the last decade, it some key challenges to deal with the health insurance. The
is still a work in progress. most baffling aspects a customer faces while buying health
cover are the nature of disorders covered, lack of clarity and
Driving Innovation high premium. Arogya Sanjeevani was significant in
The first term of NDA saw many significant changes in the addressing these challenges. When the heat of the pandemic

The Insurance Times May 2024 43