Effective insurance coverage in India could double from 15% to 30% in five years: IRDAI Chairman

“At the most, 15 per cent of our population and economic enterprises would have an effective cover,” Seth said during a discussion with financial educator and author Monika Halan.

“Can we make that fifteen to reach at least thirty per cent? Double that number with an effective cover. That perhaps is possible in five years,” he added.

“Currently, we track the number of policies, how much premium is collected every year. We really do not track the number of lives covered or the total sum insured,” he said.

The remarks highlight a key challenge for India’s insurance industry, where growth in premium collections and policy sales does not necessarily mean that more people have adequate financial protection.

Seth said digital infrastructure, particularly the Account Aggregator (AA) framework, could play an important role in expanding insurance access by helping insurers use financial information with customer consent and reduce the cost of providing services.

He noted that the industry must develop insurance products and services around the needs of individuals and small businesses rather than focusing only on building digital infrastructure.

Referring to the success of the Unified Payments Interface (UPI), Seth said the insurance sector needed to create similar demand for digital services.

He also stressed that insurance agents and intermediaries would continue to play an important advisory role, particularly for customers requiring assistance in choosing suitable products.

However, digital platforms would be essential for expanding insurance services beyond higher-income groups and reaching customers in smaller cities.

“Digital is the way to move forward,” Seth said, adding that account aggregator infrastructure could make the cost of providing insurance services far more affordable.

The regulator’s emphasis on effective coverage signals a shift towards measuring how many individuals and businesses are financially protected, rather than judging the industry’s progress only by policies sold and premiums collected. (ANI)

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