The IRDAI pushed for the ease of doing business in reforms that it introduced in 2022 even as the COVID pandemic increased public awareness of life and health insurance.
– Use-and-file procedure for quicker product launches
Use-and-file norms allow insurance companies to launch new products without prior approval from the regulator.
“The latest regulations such as the use-and-file procedure have brought a significant change of flexibility in the industry. The steps taken by IRDAI are in alignment with its goal of infusing more flexibility and higher governance in the sector,” Mr Kamlesh Rao, managing director and CEO of Aditya Birla Sunlife Insurance, told MoneyControl.
Life insurers’ focus on guaranteed return policies
The Reserve Bank of India (RBI) started raising the repo rate in May 2022, triggering a rise in interest rates for loans and fixed deposits.
Life insurance companies launched traditional endowment policies, promoted as an opportunity for policyholders to take advantage of higher interest rates.
“Owing to high interest rates, the life insurance sector has witnessed a remarkable surge in traditional business, especially guaranteed products. This has improved margins for the life insurance companies as they continue to meet customers’ expectations with their traditional participating and non-participating offerings,” said Mr Rao.
Higher health premiums, newer products
2022 saw more health insurers launch outpatient department (OPD) policies that cover expenses such as doctors’ consultations and pharmacy bills besides hospitalisation costs.
Value-added services was the catchphrase as insurers announced products with features such as a cover of up to INR50m ($604,230), planned treatment abroad, elderly support, coverage for pre-existing diseases such as diabetes and so on.
Motor insurance riders
The IRDAI allowed insurers to offer ‘innovative’ motor insurance riders in the form of pay-as-you-use, pay-as-you-drive and motor floater policies.
Several insurers including ICICI Lombard, Kotak General Insurance, Bajaj Allianz and Digit Insurance, launched motor insurance riders in 2022 that will potentially lower the premiums for policyholders based on usage.