Early April in London, Finance Minister Nirmala Sitharaman addressed the India-UK Investor Roundtable painting a vivid picture of India’s financial sector — open to the world, and brimming with opportunity, reform, and ambition. She highlighted India’s openness to foreign banks and reiterated the government’s commitment to attracting foreign investment in the banking sector.
The same intent extends to the insurance sector, underscored by the February Budget, which allowed 100 per cent foreign direct investment (FDI) in insurance, subject to simplified guardrails — a move aimed at boosting capital infusion and trust in the sector.
India, she noted, is on track to become the sixth-largest insurance market by 2032, growing at a compounded annual growth rate (CAGR) of 7.3 per cent from 2024 to 2028 — the highest among the G20 nations. Since the sector’s opening in 2000, FDI has crossed Rs 82,847 crore. The new policy signals a clear message: India means business.
Much of this optimism is grounded in a quiet but radical transformation, led by the Insurance Regulatory and Development Authority of India (Irdai). Under the stewardship of Debasish Panda, who retired as Irdai chairman in March 2025, it has transitioned from a compliance-driven regulator to a mission-mode institution.
The reform wave began with a complete overhaul of the regulatory framework: 78 regulations were consolidated into 26; and 370 circulars merged into 12 master circulars.
This effort wasn’t just about simplification — it was about agility. A new three-year sunset clause now ensures every regulation either remains relevant or gets re-evaluated periodically. In regulatory parlance, this is radical; in practice, it’s revolutionary.
These reforms have made the industry vibrant. Three life insurers, two general insurers, one standalone health insurer, and a reinsurer have entered the arena. The non-life insurance segment has seen a new entrant after five years; for the life segment, the wait was longer — a decade.
The backbone of this revolution is the Bima Trinity – a three-pronged strategy to widen insurance access. Much has been written on it. Still, here is a snapshot.
Bima Sugam is the ‘UPI moment’ for the insurance sector. A seamless digital marketplace, Bima Sugam is poised to connect customers, insurers, and intermediaries on a single protocol. Backed by the robust India Stack, a digital public infrastructure platform designed to expand access to financial and social services in India, it promises low-cost, paperless, presence-less, and cashless insurance access.
Bima Sugam is a unique digital public infrastructure designed to democratise insurance, promote innovation, and enable better underwriting — leading to more personalised products, faster claims, and a dramatically improved customer experience.
By reducing the cost of intermediation and bringing transparency to the forefront, Bima Sugam is set to unlock massive scale and trust in the insurance ecosystem.
With the Irdai (Bima Sugam) Regulations, 2024 notified and the Bima Sugam India Federation operational, this project is ready to transform customer experience, underwriting, and transparency.
Bima Vistaar is a simple, affordable all-in-one solution bundling life, personal accident, property protection, and even daily income support during surgeries. Designed to be affordable and simple, it echoes the success of mass products like Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Fasal Bima Yojana (PMFBY) with wider coverage. Its blueprint is finalised.
Bima Vahak is the beating heart of the ecosystem — a women-led grassroots distribution force. These local agents, trusted in their communities, will drive awareness, trust, and uptake at the last mile. It’s not just distribution — it’s empowerment.
Bima Vahaks will distribute Bima Vistaar, leveraging Bima Sugam. Guidelines for Bima Vahak have been notified and the rollout will align with the launch of Bima Vistaar.
Across developed economies, insurance discourse often revolves around penetration — deepening coverage among already insured populations. But in a country as vast and diverse as India, inclusion is the priority. The vision of “Insurance for All by 2047” shifts focus from merely collecting premiums to ensuring that every citizen — be it a farmer, street vendor, or gig worker — has access to basic risk protection.
In sum, the Bima Trinity is being operationalised through Bima Sugam as a digital backbone, Bima Vistaar as a bundled and affordable product, and Bima Vahak as a women-led, last-mile distribution force.
Besides, a state insurance plan has been launched and the insurers are assigned specific states or Union territories to develop tailored, local strategies. A national mission office will oversee these efforts, reporting to a governing council, led by the Irdai chairman.
To keep the innovation engine running, the regulatory sandbox has been made perpetually accessible — open 24×7, 365 days a year. This shift from static compliance to agile experimentation means that insurers and insurtechs can pilot new ideas — be it microinsurance, parametric products, or artificial intelligence (AI)-enabled services — without waiting for formal approvals.
An insurtech company is a technology company that applies innovative digital tools and solutions to the insurance industry to improve efficiency.
This could unlock customised solutions for farmers, gig workers, micro, small, and medium enterprises (MSMEs), and beyond. In this sandbox lies the potential to leapfrog legacy systems and deliver future-ready insurance.
Beyond product and access, Irdai has re-engineered the sector’s foundations. Risk-based capital norms, compliance with International Reporting Financial Standards, and a transition to risk-based supervision are underway. These are not just buzzwords — they will make insurance companies accountable and resilient. All the three projects, in advanced stages of implementation, are expected to enhance capital adequacy, transparency and risk sensitivity across the sector.
In parallel, major reforms in distribution are on the anvil. Irdai’s Regulations Review Committee has already submitted proposals to streamline and modernise product distribution, and deliberations are going on.
At the heart of all the regulatory transformations is the interests of policyholders. The idea is to build a policyholder-centric insurance ecosystem that prioritises accessibility, transparency, and trust. From mandating inclusive and customised products — including coverage for mental health, disabilities, and special conditions like surrogacy — to enforcing multilingual policy documentation and customer-friendly benefit illustrations, every touchpoint is being reimagined with the consumer at the centre.
Timelines for underwriting, claims, and grievances have been tightened and surrender norms simplified. Along with this, a robust cashless claim framework is being put in place. Tech-enabled initiatives such as automated surveyor allocation and a policyholder charter are ensuring fairness and speed even as interest penalties on delays hold insurers accountable. In essence, Irdai is shifting the culture from policy issuance to policyholder protection.
With all the building blocks – regulatory overhaul, digital transformation, ease of doing business, and robust risk frameworks – in place, the sector is at an inflection point. The once fragmented and complex environment is now unified by a clear mission, enabled by the Bima Trinity and supported by a strong policy backbone. The stage is set — not just for incremental growth, but for a structural leap that can redefine how insurance is accessed, delivered, and experienced across the country.
In past two-and-a-half decades, the insurance sector has evolved. Now, the revolution. It’s not just about policy or product; it’s about people, protection. It’s about telling a farmer in Kutch, a weaver in Varanasi, a fisherwoman in Rameswaram, and a gig worker in Bengaluru that their dreams are valuable and insurable.
Going beyond selling insurance policies, it’s about building social security at scale, with innovation at its core and inclusion as its soul. Panda has done his job well, transforming a sleepy Irdai to a mission-mode regulator. We will wait for his successor.
This column first appeared in Business Standard. The writer, a Consulting Editor of Business Standard, is a Senior Adviser of Jana Small Finance Bank.
Writes Banker’s Trust every Monday in Business Standard.
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