Insurance regulator approves Bima Sugam — here's how it will work

The Insurance Regulatory and Development Authority of India (IRDAI) has recently given its approval to ‘Bima Sugam’. The insurance regulator has asked insurance companies to operationalise it by January 2023. According to experts, this could prove to be the biggest reform in the insurance sector in the days to come.

It’s an Amazon-like platform where all life and general insurance policies will be listed. Bima Sugam will be responsible for sale, servicing and claims coming from these insurance policies.

Aggregators like PolicyBazaar, brokers, banks and insurance agents will act as facilitators or bridges in terms of selling insurance policies through Bima Sugam to individuals.

Individuals can also buy life, motor or health insurance policy through Bima Sugam.

Bima Sugam will need approximately Rs 85 crore as initial capital. Insurance companies are expected to be major shareholders of this insurance platform.

So initially, some general insurance companies will hold about 30 percent stake in Bima Sugam and another 30 percent will be held by some life insurance companies. As more funds are required for the operations of Bima Sugam, more insurance companies will be roped in as investors.