End users welcome insurance policy changes but expect transparency on guidelines and pricing – Banking & Finance News

IRDAI has carried out several changes and reforms over the last year. Do they help the end user and do they make a difference? Speaking at the FE Insurance Summit, industry stakeholders welcomed the changes but raised concerns about the lack of pricing guidance.

said Nitin Nair, Group Head, Insurance/RPG Enterprises. “The changes introduced by the insurance regulator have brought much greater freedom to the industry. This certainly opens up opportunities for innovation and healthy competition. However, insurance in India is still considered an expense. This thinking has to change.”

The affordability of insurance policies is a key point of contention in this context. Many people believe that without it it is difficult to realize insurance for all purposes. Prashant Bhosale, director of direct tax and corporate insurance at Thermax, used the example of the renewable energy sector to highlight concerns and said: “The regulator has made changes to protect policyholders and ensure healthy competition. Denotification increased the scope of insurance coverage in many niche areas, such as renewable energy sources and cyberspace. However, there are uncertainties regarding the pricing and quality of risk assessment. We need SOPs and clear guidance from regulators on pricing in this context, especially for the renewable energy sector. The regulator needs to think about making insurance affordable to align it with the goal of insurance for all.

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The insurance industry uses dynamic pricing to adjust premiums based on individual risk profiles and real-time data. But according to Neela Patel-Lead, Corporate Insurance-Tata Power, this is not enough. She echoed Prashant Bhosale’s concerns and said, “Earlier, there was no distinction between companies with good and bad practices. As a result, the entire industry received the same price/rate. However, over the past year, we have breathed a sigh of relief. However, the energy sector faces challenges in terms of full coverage of transmission lines. The covers are very basic and the prices do not take into account the unique industry challenges.”

Anisha Udeshi, Director, Global Insurance & Risk, Cipla is quite happy with IRDAI withdrawing notification of several insurance rates. “Thanks to this, we were able to enter into a dialogue with insurers and determine the risks we want to insure against. It also helped identify risks that we knew we could keep to ourselves. Real-time risk analysis is a big positive for large manufacturing plants. This also enabled real-time risk mitigation. The provisions regarding the regulatory sandbox are very positive,” she added.

However, small and medium-sized enterprises continue to look for guidelines that will better address their concerns. Francis Rodrigues, Managing Partner and Principal Director, M/s New Age Secure Insurance Marketing LLP noted that “there are no specific products for small and medium enterprises. There is a need for evolution and change that is happening especially for insurance companies, especially in the motor insurance industry. No significant changes for the MSME sector after reforms undertaken by the insurance regulator, IRDAI. But expect this to happen in a few years.