IRDAI chairman Debasish Panda on Tuesday said that there is a need for more insurance companies in the country to increase insurance penetration and density.

“We are a diverse nation and we cannot have a one-size -fits-all strategy. We need to have strategies for different geographies, societies, lifestyles and income levels and needs and that will require unique insurance solutions.”

“We need more players, differentiated ones so that they can reach out to every nook and corner of the country. We just cannot be done with a handful of products. We need many more products,” said Panda at a session organised by IVCA on Tuesday.

At present, there are 24 life insurers, including LIC, and 32 non-life insurers, including standalone private health and specialised insurers.

The insurance penetration (premium as percentage of GDP) in India during 2021- 22 was 4.2 per cent compared with 7 per cent globally and the insurance density (per capita premium) was $91 compared with $874 globally.

The insurance sector has already seen several regulatory changes since Panda took charge. However, Panda added said there are more areas where work is in progress.

This includes transition to a risk-based capital regime, introducing a risk-based supervision framework for monitoring insurers, convergence to IFRS standards and optimising the strength of the Insurance Information Bureau.

The proposed amendments to the Insurance Act could lead to new micro, captive, regional, specialised or composite insurers.

Future trends

“We will be venturing into the world of continuous underwriting and seamless insurance. For instance, drivers will be able to see how their insurance costs fluctuate depending on the routes they travel, the state of the road and all of it will encourage them to drive safely,” he said.

“In case of a hurricane or a cyclone, when sustained winds over a geographical location hit a certain speed, people in that area with decentralised insurance could be automatically paid compensation based on policy terms,” he added.

Travel insurance is an area where smart contracts operating on blockchain can be used to monitor flight data.