Bima Sugam: India To Have World's First And Largest Online Marketplace For Insurance Services; Here's What We Know About The Platform

The Insurance Regulatory and Development Authority of India (IRDAI) believes that the proposed 'Bima Sugam' insurance platform has the potential to revolutionise the insurance industry.

Bima Sugam is basically an online platform that offers customers a variety of insurance schemes from different companies.

It will cover all types of insurance, including life, health, and general insurance such as motor and travel.

Their aim is to establish it as the largest online marketplace for insurance products and services, a concept that has not been implemented anywhere else in the world.

Bima Sugam is designed to assist customers in navigating through the multitude of insurance options available. It will simplify the process by reducing paperwork and helping individuals find the most suitable scheme for their needs.

The platform will also facilitate the settlement of claims, whether they are related to health coverage or death, in a paperless manner using policy numbers.

Initially, the insurance repository will store details about insurance schemes on the platform. This will be followed by a listing of policies.

The budget for Bima Sugam has been increased to Rs 200 crore, from around Rs 85 crore.

A committee has been appointed by IRDAI to create the platform and plans to issue requests for proposals soon, to appoint a service provider. These service providers will be the technological partners responsible for creating and operating a platform that offers all services in one place.

With numerous insurance schemes available in both the life and non-life sectors, customers often struggle to determine which is the best option for them.

The Bima Sugam platform aims to address this issue by providing a single platform where customers can easily compare and identify suitable schemes. This eliminates the need for customers to spend time consulting agents or visiting multiple insurer websites to find the right policy.

According to the IRDAI, Bima Sugam is an electronic marketplace protocol that aims to universalise and democratise insurance.

It will be connected with India Stack, which provides a digital infrastructure for seamless service delivery. The e-marketplace is expected to empower all stakeholders in the insurance value chain.

IRDAI had initially planned to launch the Bima Sugam by January 2023, but the implementation date had been postponed multiple times.

Implementing the Bima Sugam is expected to be a challenging task as it requires the support of technology and innovation. However, industry observers believe that it will help increase insurance penetration in the country.

A study conducted by State Bank of India Life Insurance revealed that although 80 per cent of consumers recognise the crucial role of insurance in financial security, a staggering 94 per cent of them remain inadequately covered.

This highlights the need for initiatives like the Bima Sugam to address the issue of under-insurance.