The Insurance Regulatory and Development Authority of India (IRDAI) is taking up various regulatory reforms toward achieving the objective of “insurance for all.”
To this effect, the insurance regulator has set up a 24-member committee to develop and suggest an affordable and comprehensive cover for the rural population through the Bima Vahaak and Bima Vistaar schemes, it announced in a recent notification.
Bima Vahaak intends to form a women-centric insurance distribution channel, which is likely to foster greater trust and build awareness about insurance products in the rural parts of India.
Through Bima Vistaar, the committee will aim to bring to the forefront schemes like parametric insurance among others, in order to provide wide coverage for rural India in the event of natural disasters, such as floods, and earthquakes, to name a few.
It is hoped the two schemes will help in building a stronger safety net for the citizens of rural India who are most impacted by these natural calamities. The product offering and serving for customers will of course plug into the Bima Sugam platform to give customers a seamless experience, whether be it be enrolment, servicing, or for claims.
According to the notification, the 24-member committee will aim to address a few fundamental aspects of the schemes around the following goals:
1] To develop and suggest the constitution and operation of Bima Vahak – a women-centric distribution channel focused on reaching rural and/or untapped areas. The committee will also try to recommend a regulatory framework for the same.
2] To develop and suggest an affordable, accessible, and comprehensive cover for the rural population, on a benefit based/parametric structure through Bima Vistaar, and recommend a regulatory framework, therefore.
3] To explore and recommend how to bring about synergies in the working and operations of Bima Vahak, Bima Vistaar, and the digital platform, Bima Sugam .
The committee is likely to submit its report to the IRDAI chairman within 21 days of the date of this notification.
Says IRDAI in the circular: “In order to facilitate the availability of an affordable, simple, but comprehensive cover to the hitherto untapped areas and rural population, it is necessary to understand the needs and requirements in those areas and formulate suitable risk cover and customised distribution channels who appreciate the market dynamics in such areas. Field forces in remote areas need to build the trust of the local population and be more patient and persuasive to be
able to explain the nuances of the need for risk cover. In this context, a women-centric distribution model emerges as an apt alternative.”
The circular adds, “Latest developments in technology, like Artificial Intelligence (AI)/ Machine Learning (ML) can be gainfully utilised by creating a digital platform to reach the last mile.”
According to insurance industry experts, the two schemes – Bima Vahak and Bima Vistaar – are a step in the right direction. These will help explore how insurance penetration can be increased in semi-urban, rural towns, or in villages.
According to them, these steps will go a long way in narrowing the protection gap between the insured and the uninsured or underinsured population.
Says Tapan Singhel, managing director and CEO, Bajaj Allianz General Insurance: “I see this as a very progressive step towards increasing insurance penetration in the country with a focus on rural India. I am confident that the committee will come out with innovative workable solutions towards reducing the protection gap.”