The Insurance Regulatory and Development Authority of India (IRDAI) is planning to come up with standard products for term plans, dwelling and small & medium enterprises (SMEs) to improve penetration in the industry.
Challenges faced due to the economic impact of COVID-19 have lowered sales of insurance products in the country said the regulatory body's chairman Subhash Khuntia, addressing an event organised by industry lobby group CII, adding that the industry is working on introducing standardised policies for life and small businesses soon, to make insurance more accessible and easier for consumers to understand.
"The idea to come out with the standard products for dwelling units is because the same product will be sold by all the companies. It will become easier for policyholders to pick such products as they don't have to go through voluminous policy documents to find out terms of conditions. So, hopefully, more and more people will protect their homes," said Khuntia.
He added that insurance products will also be introduced for SMEs to cover losses caused by floods and fire.
The IRDAI chairman that the negative new premiums growth seen in April has seen some revival, especially in the health and life insurance segment. He hopes that companies will start registering positive growth by the end of September and wipe out the downturns caused by the pandemic by the end of the financial year 2020-21.
Khuntia said that while the industry has performed well in expediting the claims settlement process during the pandemic, there is scope for improvement considering the low reach of insurance in the country. The penetration of life insurance with annual premium as a percentage of gross domestic product (GDP) was at about 3.7 percent and about 0.9 percent for general insurers in 2019, but they were significantly short of the global average, he pointed out.