Indian insurers at the cusp of transformation: retired IRDAI chairman

India's IT capabilities will accentuate the further growth of the sector.

The Indian insurance industry is at the peak of transformation, said the recently-retired Insurance Regulatory and Development Authority of India chairman Subhash Khuntia.

In a letter published on the IRDAI website, he outlined three factors to support his statement: the young Indian population that is likely to persist for several years, the potential of high economic growth, and the relatively low level of insurance penetration.

The country’s capability in IT and its IT-enabled services sector will further accentuate the potential growth of the insurance sector, he added.

On the other hand, Khuntia advised insurers to focus on risk prevention and engaging with policyholders so that the latter will also benefit from loss prevention and in turn generate trust.

“Emerging risks arising out of global climate change and cyber-risks will have to be addressed. Use of new distribution channels and omni-channels will be pervasive. Insurers need to be agile to respond to the fast-changing needs of the customers. Regulatory sandbox provides an opportunity to pilot such innovative products and services,” he said.

In addition, he stressed the importance of insurance inclusion, particularly catering to the rural population, farmers, women, MSMEs, the poor and the marginalised, and highlighting the need to develop cost-effective microinsurance models.