According to the Insurance Regulatory Development Authority of India (Irdai) annual report FY 2024, in 2023-24 India’s insurance penetration was 3.7 per cent, down from four per cent in 2022-23. Penetration for life insurance declined from three per cent in the previous year to 2.8 per cent in 2023-24. When it came to non-life insurance, the penetration remained the same at one per cent during the period.
However, the report also pointed out that India’s insurance market is one of the fastest growing globally. According to Swiss Re Group, a provider of insurance and reinsurance, India is currently at number 10 and will be the fastest-growing insurance market in the G20 over the next five years. The growth outlook is based on strong economic growth, rising disposable incomes, a young population, increased risk awareness, increased digital penetration, and regulatory policies. Let us look at a few more highlights from the annual report 2023-24.
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Protecting Interests Of Policyholders
Irdai has made efforts to strengthen the regulatory framework to protect policyholders' interests under the Irdai (Protection of Policyholders’ Interests and Allied Matters of Insurers) Regulations, 2024, which supersede the Irdai (Protection of Policyholder’s Interests) regulations, 2017.
The regulations ensure that prospects are treated daily during the sale of insurance policies and protect the interests of shareholders throughout the entire cycle of engagement with insurers and distribution channels. Insurers and distribution channels are mandated to adhere to the best practices and also focus on prompt grievance resolution.
Health Insurance Claim Settlements
During 2023024, general and health insurers settled 2.69 crore health insurance claims and paid Rs 83,483 crore towards the settlement of health insurance claims.
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The average amount paid per claim was Rs 31.086. 72 per cent of claims were settled through third-party administrators (TPAs) and 28 per cent of claims were settled through in-house mechanisms of insurers. Also if one looks at the mode of claim settlement, 66.16 per cent of claims were settled through the cashless mode while 39 per cent were settled through reimbursement.
Importance Of Consumer Education
The report also mentions that consumer education is essential for achieving financial inclusion. Through consumer education, individuals are empowered to make informed insurance decisions, access appropriate policies, and use insurance effectively to protect their financial well-being.
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Customer Information Sheet
Another important thing that policyholders need to know is that Irdai has mandated the issuance of a customer information sheet (CIS). The concise and updated CIS is designed to provide policyholders with all important information about the insurance policy in a snapshot. This should include details such as the name of the policy, coverage, waiting periods, and limits and exclusions, if any. This is meant to help policyholders make an informed decision while purchasing an insurance policy.
