Bima Sugam: More affordable insurance policies

The Insurance Regulatory and Development Authority of India (IRDAI) has approved the setting up of Bima Sugam — an online insurance marketplace for buying, selling, and servicing insurance policies as well as settling claims. In a press note “Regulatory Revamp: A Paradigm Shift” released on March 22, 2024, the regulator said, “The IRDAI (Bima Sugam – Insurance Electronic Marketplace) Regulations, 2024, aims to establish a Digital Public Infrastructure named Bima Sugam towards universalization and democratization of insurance as well as empowering and safeguarding policyholders’ interests and achieve the vision of “Insurance for all by 2047.” What is Bima Sugam? How is it going to help customers? ET Wealth Online explains.

What is Bima Sugam?

Bima Sugam is like an e-commerce platform where insurance companies can sell their products. It will onboard all the companies that offer life and non-life insurance products under one roof. From buying insurance policies to renewals to claim settlement to portability to grievance redressal — Bima Sugam aims to provide an ‘end-to-end’ digital journey to all policyholders. IRDAI said, “This marketplace serves as a one-stop solution for all insurance stakeholders, including customers, insurers, intermediaries, and agents, thereby, promoting transparency, efficiency, and collaboration across the entire insurance value chain.”

“Bima Sugam will be a unified platform, which will be integrated with various govt databases, insurers, intermediaries, insurance repositories, etc., for fetching customer details, providing product information, and buying and servicing Insurance policies. It will act as a single interface for customers, intermediaries, and agents who can connect and either buy or sell insurance across insurers (life, health, non-life),” said Atri Chakraborty, COO, of IndiaFirst Life Insurance Company.


How is Bima Sugam going to help the customers?

Bima Sugam is all set to make your life insurance journey easier, simpler, and more affordable.

No paperwork, insurance in e-format

Buying insurance policies now through traditional channels such as agents and brokers, starts with filling out lengthy forms and submitting various documents. You need to maintain those physical documents for renewals or claims later. Bima Sugam aims to eliminate the paperwork as you can simply have your policy in an electronic format.

When you buy a policy through Bima Sugam, soft copies of the policy are likely to be available to you through an electronic insurance account. Insurer will have to extend this option to both new and existing customers, according to insurance industry.

Easier access to insurance policies through a single window

With Bima Sugam, customers no longer need to keep a tab of different policies separately. They can view all their policies — life, health and non-life insurance — in one single application or window under Bima Sugam.

You can check your policy details, and renewals dates, and raise service requests through Bima Sugam. “Bima Sugam will facilitate servicing options for the customers from one single unified portal across policies and ease the claim settlement process for the nominee or beneficiaries since all policies are linked and stored in one place,” said Chakraborty.

Bima Sugam: Insurance policies to become more affordable

Bima Sugam is all set to make insurance policies more affordable. At present, insurance web aggregators typically charge a fixed commission to sell insurance products. As insurance companies will sell policies directly through Bima Sugam, the commissions paid to intermediaries are likely to be reduced, leading to lower premiums for policyholders, according to industry officials.

The regulator earlier proposed that an insurer can offer a discount on premium rates for policies purchased directly through the platform.

“The regulations (Bima Sugam) focus on making insurance easy to access and affordable for everyone. It’s towards streamlining the entire insurance value chain, from policy issuance to claim settlement, thereby promoting transparency and collaboration at every stage,” said Tarun Chugh, MD & CEO, of Bajaj Allianz Life Insurance.

Further, you do not have to pay any additional charges to use Bima Portal. Earlier, the regulator said in a draft exposure, “Consumers shall not be charged for availing the services of the marketplace.”

“Bima Sugam will be a game changer in the insurance sector, similar to what UPI was in the banking sector; it will contribute towards easy accessibility of insurance and making products more affordable,” said Kishore Kumar Poludasu, MD and CEO, of SBI General Insurance.

“The platform will offer a one-stop shop for selling, servicing, and claims settlement backed by the regulators’ credibility rather than just being a comparison and purchasing tool. It will provide insurers with immense opportunity to reach clients and from the customer’s perspective, having access to a wide range of products from a variety of insurance firms on a single platform would provide more options and flexibility,” he adds.

Bima Sugam platform is yet to be launched, so for finer details we need to wait and watch.

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