Bima Sugam: How this new portal will provide a ‘UPI moment’ for the insurance sector

Insurance Regulatory and Development Authority of India (Irdai) has set up a committee to oversee the creation and development of its Bima Sugam—an online marketplace that will house all companies selling life and non-life insurance on a single platform. The launch of the platform, which has already missed two deadlines, has now been rescheduled for June 2024. 

The regulator claims that the proposed portal will be a ‘game-changer’ and a ‘UPI moment’ for the insurance sector. 

What is Bima Sugam?

Bima Sugam aims to simplify the process of purchasing insurance for consumers.  This online platform is where customers can choose a suitable scheme from multiple options given by various companies.  All insurance requirements, including those for life, health, and general insurance (including motor and travel) will be met by Bima Sugam. 

"This platform will help in the settlement of claims, whether it’s health coverage or death claims, in a paperless manner on the basis of policy numbers. In short, identifying the right policy, buying it, and settling the claims and renewals will be streamlined in the online process that Bima Sugam will introduce. Insurance companies (both general and life insurers) will be major shareholders in the platform, which will offer facilities to customers via an ‘e-insurance account’ (E-IA),” said Tejinder Singh senior consultant of Alpha Capital.

Benefits of the Bima Sugam portal

It will facilitate insurance companies to access the validated and authentic data from various touch points on a real-time basis. The platform will interface for the intermediaries and agents to sell policies and provide services to policyholders, among others, and reduce paperwork. Further, the paperwork involved in buying a policy will also come down. Settlement of claims and renewal of policies will also become faster as paperwork is reduced drastically, making it easier for the customers.

Who benefits from the BIma Sugam portal?

The scheme shall benefit consumers more than the agents, since this will affect the commissions drastically and reduce paperwork involved in processing the claims. 

“IRDAI’s robust platform will benefit insurers, hospitals, and policyholders alike. This exchange will serve as a centralized hub for health insurance-related activities; ensuring efficient policy management, quick & hassle-free processing of claims, automatic fund transfer for policyholders & hospitals, and reduced cost per claim to the insurer,” said Ajay Shah, Head – Distribution, Care Health Insurance.

It will provide end-to-end solutions for customers’ insurance needs i.e., purchase, service, and settlement in a seamless manner. “First, you can buy policies, pay premiums, and settle all claims on a single platform. You don’t have to visit the websites of different insurers separately. Secondly, you can choose a repository to maintain all your insurance policies. If you have all the links stored in one place, claim settlement will become easier for nominees and beneficiaries,” said Tejinder Singh

With this proactive measure, IRDAI looks forward to driving positive change in the industry. The initiative will not only meet changing market demands but also position India as a thought leader for insurance innovation.

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