Life biz to see 4-fold jump in 10 yrs
The Telangana government in collaboration with the IRDA and Insurance Information Bureau of India (IIB) launched the e-Motor Insurance policy facility in the state in January.
New premium business to reach 4.60 lakh cr in 2025
IRDA plans e-Vahan Bima for pan-India
With an aim to provide motor insurance policies at vehicle owners' doorstep, insurance regulator IRDAI is contemplating promoting the e-Vahan Bima system throughout the country. The Telangana government in collaboration with the IRDA and Insurance Information Bureau of India (IIB) launched the e-Motor Insurance policy facility in the state in January.
The platform for e-Vahan Bima was established after the data sharing was facilitated by the Telangana government with the IIB. "Now that the Government of India, MORTH (Ministry of Road Transport and Highways) has also agreed to share the nationwide data with IRDA/IIB, e-Vahan Bima could also be extended to the rest of the country," said minutes of a IRDA meeting.
Electronic motor insurance policies are expected to help in issuance of insurance policies at vehicle owners' doorstep. Under e-Vahan Bima, the policies are issued in digital format which can be seen in any smartphone. Alongside, QR (Quick Response) code is issued that can be scanned for verification of policy details if need arise. An SMS based verification is also in place.
Driving a motor vehicle without insurance in a public place is a punishable offence under Motor Vehicle Act 1988. Despite this mandatory requirement of third party motor insurance, there are a number of uninsured vehicles plying on the road. Apart from non-compliance of statutory provisions, it dilutes the safety net and has an impact on the compensation limits available to common man in case of an event
During the launch in Telangana, the IRDA had said electronic motor insurance policies could be issued on-line across the country, thus, paving way for a host of benefits like faster issuance, removal of fraud, higher customer satisfaction, elimination of revenue leakages, and analytics, among others.
The new premium business of life insurance segment is expected to register four-fold jump in 10 years by the year 2025 to Rs 4.60 lakh crore from Rs 1,13,327 crore in last fiscal, according to a report by Insurance Brokers' Association of India (IBAI). IBAI released the report titled 'Vision 2025: Broker-Driving customer centric growth' at its 12th annual summit here on Wednesday.
The report which was published in association with Ernst & Young also projected the in the non-life insurance segment to reach Rs 4 lakh crore in the same period from Rs 83,048 crore, if progressive actions are taken. During the 10-year period, the non-life insurance segment is estimated to grow at 13-17 per cent CAGR (combined annual growth rate), while the life insurance market will increase 11-15 per cent.
The report also estimated that the broking channel had the potential to contribute 40 per cent of the gross direct premium in the non-life insurance business and 1.6 per cent of the new business premium in the life insurance business in the coming years. "The brokers share of the total non-life insurance market is 27 per cent at around Rs 20,000 crore and is expected go to Rs 1.60 lakh crore," said Sanjay Kedia, President, IBAI.
Meanwhile, Insurance Regulatory and Development Authority of India (IRDA) is getting ready to release final regulations for commission of insurance brokers by March this year. "A sub-committee has been formed which will decide on the quantum of cap on commission, though the cap on commission and other remunerations for Insurance brokers cannot be removed," said IRDA Chairman T S Vijayan after releasing the report.
Asked if IRDA is ready to discuss quantum of cap with the brokers, he said: "discussion is a continuous process and sub-committee is discussing all this. I hope to bring the final regulation by March." Earlier, addressing the summit, Vijayan said financial intermediation could itself become a challenge and hence, it has to be relevant going forward.
The challenge before industry and brokers association is to remain relevant for the times and change with the times, Vijayan said. The need of the hour is to keep pace with the changing times, environment, economy and tune the responses to the best of the people, society and everyone else, he added.