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hello and welcome to ET now today I am at irda head office in Hyderabad and joined by iida chairman Mr debashish Panda thank you so much sir for talking thank you very much sir in board meeting you have taken series of new decisions uh to increase the insurance penetration to increase uh uh to in overall to defer development of insurance sector and one important decision is of regarding the registration of new insurance companies so what does it mean does it mean that in coming time we will see a number of new insurance companies because you are allowing P companies also P funds also to become promoter see I mean if you go by the vision of the irdi we are looking at you know before 2047 our countries should be fully insured all our citizens should get adequate cover for Life personal accident Health property and all businesses and Enterprises should also be adequately covered with insurance our economy is growing major drivers of growth also suggests that are and and there are certain reports which say that India from being the 10th largest Insurance Market by 2032 we will become the sixth largest Insurance Market if you look at the growth pattern in the last five years the cagr was around 11 percent last year alone 21 20 uh two the gross written premium was around nine lakh roads registering a growth of about 9.94 percent highest and today if you look at the year on year growth as compared to last year in October 2022 the growth is around 20 percent which is a very encouraging trend going forward you know the pandemic has also taught a lot of lessons that how health insurance is a risk mitigation tool that people have understood a lot of people are realizing the need for insurance discretionary spends are increasing so more and more people are investing in the insurance as a product you know for risk mitigation and also through life by way of savings by way of annuity and so on now if we have to double our penetration then we would require you know something like three and a half lakh to four lakh roads of capital okay currently about one lakh crore of capital is already deployed in the insurance Market so the existing companies will have to raise more capital and at the same time we need lot many new players so the registration regulations are very important set of regulations which will take care of these requirements yes sir So based on various inputs that we received through our interactions then we had a conference with the private Equity Funds The Venture Capital funds the family offices we met the trade bodies the CII Vicky PhD Chamber of Commerce received inputs from all of them as to what all we need to now factor to make the registration regulations more Progressive forward-looking and also a vibrant one based on that then we came out with a draft regulation which was put in public domain the Consulting we did consultation with the industry as well with the other stakeholders after you joining we have seen that every week there are so many new draft notifications are coming up and series of notifications are coming continuously so the whole idea is that unless you create a regulatory framework which is Progressive forward-looking supportive and facilitative then you know investors will not be attracted to come and invest in the country so that was the first and foremost requirement secondly we are also trying to build a very robust risk management framework so that at all points of time we are able to supervise that they are financially sound and stable so the registration is guidelines is a step towards that direction and let me tell you today we have also approved a new entity to start their operations in the country as an insurance company after a gap of five years five year 2017 was the last and now 2022 we have today approved I will see that you will be approving registration very fast yeah there are around there are around 19 more applications which are at different stages one is fully matured the capital is to come in the next 15 days time so once that happens they will get the approval the others are in different process so we have actually created again a framework that when a new applicant comes we have a facilitation cell who does the hand holding so that they are constantly in touch with them to assist them in completing the requirements for setting up of the unit so that as early as possible within that 60-day framework they are able to start their operations okay sir and sir in open architecture texture you have announced that presently Banks were able to tie up with three life three General three health insurance so now A Bank a corporate agent will be able to tie up with 27 companies so it was three three and three three each in life uh General and health now we have expanded that three to nine nine so once you have given that window it's up to the market to decide and the companies to decide with how many they need to tie up nine or nine nine nine nine nine nine okay twenty seven so so typically now it will they have a choice now insurance companies and corporate agents have a choice to how many they wish to tie up now what it does for the policyholders it gives a wider choice of offerings okay so if you walk to a bank then you have several products to decide yes so it's now up to them we are not mandating that you need to tie up with three or four or five or nine it's a compare only opening up the sector for more tie ups so it depends on the insurance company and the corporate agent you know OK sir and uh now uh as per your announcement that companies will not require any permission to raise Capital through other means and you have increased the threshold also no what we have done is for companies also to raise monies from the market as a subordinate debt we have laid down certain parameters So within those parameters if they fall then they need not come to the insurance to irda to obtain a permission and that flexibility is available to them so that they can go at the appropriate time to the market the market doesn't wait because the market may be conducive for the insurance company to go and raise that Capital so that freedom is provided they fulfill those parents so in today's in board meeting it was expected about the single limit for expenses of management but we have not seen this again you have come up with a revised draft notification so what was the idea behind that and why we have not seen this in this board meeting see two of the regulations actually they go hand in hand the expenses of management and the commission regulation yes sir so uh when the draft was put up a few days ago a few months ago since then a lot of comments had come okay then a lot of stakeholder consultation like we have you know had interaction with all categories of the intermediaries individual agents their Federation the web aggregators the imfs the corporate agents the insurance companies so a lot of inputs came and it was felt appropriate that we will look into all of that and the whole idea is you know not to come up with something where we Face a hurdle when it comes so therefore we now this draft has undergone a big change from what we had exposed and what it is now sublimit has been so therefore we thought let's again get the comments and there was no hurry in any case because the date of implementation in any case would be from the next financial year okay so why not give another opportunity for the stakeholders to present their views if they have any I believe that now much of it has been reconciled to the uh you know to the to the in to the expectations of the stakeholders uh so that it works in a seamless manner it is it is already directly linked to the commission also and in commission draft you have said that it can be maximum up to um limit so do you think it will disrupt complete the market because few companies to increase their market share they will be able to give maximum commission I mean these are all sort of wild assumptions that we are making in any Market the market forces which determine the market is a place of competition also okay and no company would like to you know overprice a product or price it below what the threshold would be so the pricing is also done or decided by the market so the players know how to price it okay now as far as the new guidelines of the commission are concerned it gives complete freedom to the insurance company or the industry to decide what kind of commission structure is appropriate they can retain at the current levels they can enhance it so it is for them to decide so instead of irda stipulating x y z it's better to leave it to the board so it and the boards have been advised also through the circular that at all points of time they should take the interest of the policyholders into account and also the agent and intermediatives into account so do you think that it will provide label playing field for everyone and one of the important thing we have seen it will in one line I may say it will bring in more efficient efficiency yes and that summarizes what will happen and the sort of that allegation keep coming against the few companies that they are paying over and above the prescribed limit so after this fixed limit that sort of things won't be there I don't know what is uh what is the question you are making but what I'm trying to say I want to say that we have seen couple of every times there are few there maybe no no not the question there are some breaches which may be uh you know beyond the control of the regulation so they have breached no not the regulator by the insurance company so they breach that now this single expenses of limit gives them the flexibility to remain within that yes and secondly what we have said that maybe somebody is above that limit so they may take time to come down to this limit yes sir so there is a Glide path also new companies obviously when they start their operations their expenses of management will be higher so they will be given a five-year Glide path to bring it down to the allowable expenses limit yes so I mean all in all it is a win-win for everybody where you are allowing the boards giving them the flexibility secondly we are giving giving the freedom to the companies to decide the commission structure there may be certain products where you need to give board commission they can do that the irda doesn't come in their way so they have the complete flexibility to decide how much of commission structure they can retain at the current level they can enhance it so it is up to the companies you have so therefore by imposing caps it was a bit of you know not bringing in the efficiencies into the system so we thought that this will be the right way right approach and I am sure all the stakeholders will receive it well so presently there is a big buzz in Insurance sector about bhima sugam so how this will be a big game changer in Insurance sector and there is one another thought of many people that it will disrupt Insurance sector because there will be direct policies will be available so agents will suffer companies will increase competition and by when we will see this bhima sugam into reality sugam is contemplated to be a e-market place okay and for the customers and more importantly for the agents or the intermediaries this is going to be a game changer now how an agent is able to service his custom cell product to the customer through this portal yes sir is able to service his customer through this portal and is able to also settle his claims to this portal okay now typically what happens when a customer is approached by an agent the agent will have to go from his home to maybe 20 30 kilometers in his bike or motorcycle reach he will solicit by explaining him through a piece of paper here and also gave him a comparison of what is this product what is that product now here in this and he has to do his kyc he will require documents it's a cumbersome process time taking process costly process here what happens the entire kyc gets automatically done by simply the customer types his aadhaar number which is masked and everything is linked everything gets Auto popular yes sir choice is available he shows it on the screen of the iPad or the smartphone so is there a deadline for insurance no no just listen so the customer journey and as well as the now the insurance agent if he goes man physically he has to go to the branch deposit his check it takes two days or three days to get collected then they will print to the policy they will sort of do the underwriting print the policy then hand it over to him he will have to go to The Village or the town of the customer so you know the amount of time and that money and resources that he spent in that amount of time and resources he will be able to service 20 other customers or 30 other customers and overall penetration so the penetration will grow the agent also gets more income more customers and at the same time Insurance penetration as you said and the customer Journey becomes absolutely delightful now question when it will come up you see it is at the conceptualization stage it's not a small portal that it comes up we have to take millions and millions into every account going forward it will become a very important Market infrastructure in the financial Market infrastructure so it has to be very carefully everything has to be done so it will take time so and we are already started working on it but I cannot Define an exact time but yes we will try to speed up this whole process so that you know it comes up as early as possible so actually typically it helps you know bhima Vistar is a kind of a product a bouquet of a bundled kind of products typically for the people who have less disposable income now it will have a component of life it will have a component of accident personal accident you'll have a component of health and it will have a component of property so the typical approach would be that it will be like say for example you can afford say 500 rupees annually so it will be linked to the number of units of insurance that you buy if you have more money you double that so say 100 units of insurance 50 rupees 500 will grow five times so depending on your affordability you can buy so this is the design or construct of the bhima Vista then what does is a women's Centric Force okay men will also be there but primarily women they are from the community for every gram panchayat we want one at least one to begin with who goes to the households and with with her iPad or with her uh iPhone uh sorry the smartphone and goes explains to the household the importance of insurance and the availability of insurance and the price of the product and then sells that product and gets the policy straight away in a printable form or in a downloadable form okay people will believe in that because he or she comes from the community people haven't it's like the bank so the people would know that yes this girl is from our neighboring Village or from our village so they will have trust in her they will have the confidence in her so that's how we are trying to create this new uh uh you know set of intermediaries who will go into the rural Market who will go into the semi-urban areas which are now untapped there is a huge Market potential and small ticket items they will be able to sell through the bhima sugam portal and service their customers and so that is the approach of you know the bhima sugam the Trinity of bhima sugam bhimavista yes sir and Sir for demetralization of insurance policies have you given any deadline to injuries no not yet we are also working on see the the bhima sugam also talks about all the insurance repositories uh getting connected to the bhima sugam so that the day the bhima sudam becomes operational whatever insurance policies are issued will be pushed into the repository okay and going forward you know it's available in a dmat form which should be possible then people will be able to use it as a financial instrument for pledging of shares or raising alone so that that only enables the customer to leverage on the insurance policy that he or she has so around two years back IID came up with a consultation paper of allowing life insurance companies to sell Indemnity right now there is no such decision we are more worried about how to you know further our efforts of penetration and therefore we are trying to but as we go forward once these things stabilize we'll take a call and yes recently you've made a 13-member committee also in which that is basically for penetration of Health for the missing middle okay so how what kind of products can be done how can we reach out I will suggest a standard health no not a standard that I don't know what they will suggest this committee stock is that first time ever iida has chosen six doctors there are doctors there are very eminent doctors and we have the hospital Network Federation also representing uh we have academicians also who are researching on health care or managing Healthcare they are there so it is a quite the you know what should I say very eminent people sitting on that committee and so they will give their input so let us see what finally comes out yes in terms of their recommendations answer a few days back IIT came up with a clarification after there was so much of you and cry that for insurance policy on the policy note only the amount of commission will be mentioned we have never come out with a no no you came media you all have created this confusion yes sir so the media has created that confusion we wanted to set it at rest you know yes sir so no speculation so we haven't yet I mean never ever have circulated any yes so therefore clarify you just set it to rest yes so there was no speculation things have stopped there after yes so my last question is regarding that you have given a ambitious Target to Insurance sector particularly for General Insurance sector for 11 lakh Road and it's been five six months so ing to you how things are moving fast and do do you think that in present scenario it is achievable by 2027. see we what we have done is we have looked at what is the cagr in the last five years it's around 11 last year growth was around 10 percent currently here on year growth is 20 percent we sat with the insurance companies okay to discuss how can we double the penetration what all now we are making the regulatory changes we are making all these changes that we just discussed this will facilitate all of you so can we have some aggressive and aspirational targets then we talked about why not we have lead insurers like the Lead Bank Concept in each of the state how can we partner with the state government the insurance companies to further our efforts for insurance penetration so all those things are now falling in place we are from ird I have written letters to all the chief secretary saying that we have designated a lead insurer just like Banks we will have it yes we can have a forum uh of like the state level Bankers committee we can have the state level bankers and insurance state level Insurance committee so all the state governments are now every day I'm receiving two three replies from them and they are quite enthused about this whole effort going forward we will also go to the state headquarters have meetings there discussed with the state authorities insurance companies have already started going but our bi-monthly meetings could also happen there so coming back to that growth so in these discussions it was agreed to we had made certain projections so they agreed to some of them yes said this is bang on we are absolutely the same kind of target has been also decided by our board too exactly so they were all quite enthusiastic about this whole idea of growing more in an aspirational Manner and as I said we are almost you know growing at twenty percent and hopefully the momentum will keep going and uh so that's where we are and I hope I see a good future as far as the sector is concerned thank you so much sir thank you thank you thank you so much