Bima Sugam is anticipated to level the playing field for all participants and bring about greater simplicity, security, and transparency. What UPI has done for payments, is anticipated to do for insurance.
The insurance sector as well as the insurance regulator IRDAI support the planned Bima Sugam platform. Innovation is essential to scaling and sustaining insurance executives’ businesses as they adapt to the challenges of digital disruption. The way products and services are offered is changing as a result of the traditional insurance business model’s constant evolution. A recent survey by Swiss Re found that more Indians are purchasing insurance online as a result of the pandemic’s increase in digital activity. Traditional insurance purchasing has always been a lengthy, multi-step procedure for customers.
So what exactly is Bima Sugam, and how will it help the average person at home? Let’s look at recent events to have an idea of what has happened to find out.
Bima Sugam, which means “Easy Insurance,” has recently received clearance from the Insurance Regulatory and Development Authority of India (IRDAI). In January the IRDAI authorized the sale of all varieties of insurance products using an internet platform.
The working name for the digital platform is “Bima Sugam.” Everyone will be able to buy insurance coverage directly from the insurance providers of their choice. For policyholders, Bima Sugam will offer an E-BIMA or E-IA account in a Demat format.
Since there is no stress associated with preserving any physical documents, it will give consumers more security. Because businesses would be selling policies directly on the platform, commissions will be cut, which will benefit policyholders. The site will provide policyholders with the ability to switch their agent or policy in addition to allowing them to purchase insurance and handle claims.
A customer will have access to soft copies of the policies he has purchased through an electronic insurance account.
The claim experience is anticipated to improve because the insured or their nominee would have easy access to all policy-related information on the site while making their claim. The transfer of one’s policy or agent will go more smoothly thanks to the site.
How can Bima Sugam be helpful?
The owner of the insurance will have a personal E-Bima account on the Bima Sugam platform where all of their various insurances, including health, life, automobile, general fire, etc., would be shown. They are available for access by the policyholder at any time or location. The following services will also be offered to the policyholder by Bima Sugam:
A variety of advantages are in store
Bima Sugam seeks to remove a number of barriers that people have while obtaining the insurance they need, such as the requirement to fill out extensive papers and the reduction of commissions paid to intermediaries. Also, it will increase the reach of insurance companies and provide the most incredible convenience through a number of advantages.
Keeping regulations secure and available
When one uses traditional channels like agents and brokers, there is a lot of paperwork involved. All of this paperwork will be done away with by Bima Sugam, which will also make life easier (and safer) for customers who won’t need to keep any physical records. The procedure of renewals and claims will also be made simpler because no paperwork is required.
Only one window
Bima Sugam will assist customers in reviewing and purchasing plans from a single regulator-approved portal rather than visiting various websites. More transparency will result from this, and incidents of misselling and fraud will decline.
Affordability
Web aggregators currently receive set commissions. However, since Bima Sugam will be selling products directly through its platform, clients will benefit from lower commission costs and pay lower premiums.
Ahead of us
A McKinsey analysis projects that by 2025, machine learning and artificial intelligence will have automated 25% of the insurance sector. Bima Sugam will assist the industry in making significant progress in expanding the insurance infrastructure, which is consistent with the regulator’s desire to digitize insurance distribution in India. Similar to how Unified Payments Interface (UPI) has transformed the ecology of digital payments, the portal is anticipated to alter the sector.
The Life Insurance Council, General Insurance Council, public sector insurers, and brokers’ associations will be some of the major participants in Bima Sugam.
The debut date for Bima Sugam was originally set for January 1, 2023, but it has been delayed. It is anticipated that once it begins operations, it will assist modern startups that now provide sandboxed goods and a level playing field for all insurers.
Bima Sugam’s success will, however, depend on how successfully it is carried out, as with any initiative.