Insurance Shifts: A Glimpse Into 2024

The insurance sector has experienced many changes in the year 2023. Under the new tax regime, amendments have been introduced concerning taxation, particularly impacting Endowment Plans. Notably, if the annualised premium for Endowment Plans exceeds Rs 5,00,000 lakh, maturity proceeds will now be subject to taxation. This marks a crucial shift as endowment plans combine Life Insurance coverage with maturity benefits upon completion of the tenure, thereby making them liable for taxation if the premium surpasses the specified threshold. This alteration stands out as a pivotal development in the Life Insurance sector.

Additionally, minor adjustments have been made to plans offering additional benefits alongside Life Insurance, such as endowment plans, traditional saving plans, and ULIPs.

"The end of the last financial year saw changes in budget and taxation rules. This alterations prompted a surge in high premiums during the last quarter, primarily driven by the quest for tax savings. However, Shriram Life, with its focus on lower-income customers, remained unaffected by this trend as we don't actively target or engage with higher-income segments. Consequently, we anticipate growth for Shriram Life in the coming year, recognizing that the broader industry might face challenges in demonstrating robust growth given the current economic landscape," said Casparus Kromhout, MD & CEO of Shriram Life Insurance.

In the year 2023, the Insurance Regulatory and Development Authority of India (IRDAI) brought multiple reforms, focussing on three prominent themes – strengthening the ecosystem, improving accessibility & reach, and safeguarding policyholders’ interest.

In 2024, things are changing, especially with the government's success in digital payments. Now, they are set to reveal Bima Sugam, a one-stop digital platform, that makes it easier for everyone. It covers everything from buying to helping with insurance products, as per media reports.

There's also another insurance called Bima Vistaar. It's made for everyone and doesn't cost too much. They plan to start it in January 2024, making insurance more available for more people.

And there's more! Bima Vaahak is like a special way for women to get insurance info right in their local areas. It helps women understand why having insurance is important for their money safety. These changes show the government wants to make insurance easier for everyone.

The Insurance Regulatory and Development Authority of India (IRDAI) is planning to launch a unique all-in-one insurance product called Bima Vistaar soon, which will complement its two other initiatives, Bima Sugam, a one-stop digital platform, and Bima Vahak, a women-led distribution channel, to boost the country's insurance penetration.

"Year 2024 will be a pivotal year marked by initiatives like expenses of management regulation, Bima Vistaar, Bima Vahak, and Bima Sugam. These efforts are poised to amplify customer empowerment and advance the insurance industry, aligning with a broader mission of "Insurance for all." The insurance amendment bill's emphasis on perpetual licenses fosters autonomy, underlining IRDAI's commitment to a level playing field and heightened insurance penetration," said Sarbvir Singh, Joint Group CEO at PB Fintech.

He observed the evolving interplay between regulation and innovation, lauding IRDAI's forward-thinking approach. The regulator's strategic announcements, encompassing tele medicals for NRIs, cashless health insurance claims, emphasis on women customers, simplified policy documents, expedited claim procedures, and introduction of user-friendly policies, reflect a purposeful drive toward enhancing customer trust. This innovation-centric path is set to unlock the full potential of insurtech, propelling the industry towards accelerated success in the coming year.

While speaking with BW Businessworld, Dhiren Salian, Chief Financial Officer, ICICI Prudential Life Insurance, said, "The insurance industry is undergoing a shift towards digital-first business models. Technology is playing a pivotal role in simplifying products, processes and delivery mechanisms and providing customers with a delightful experience.

He added, "With the growing trend of nuclear families, changes in prices and processes and growing consumer awareness, the retail protection segment has started to exhibit growth."

In the year 2023, the Insurance Regulatory and Development Authority of India (IRDAI) brought multiple reforms, focussing on three prominent themes – strengthening the ecosystem, improving accessibility & reach and safeguarding policyholders’ interest. As the regulatory firm was in action and it is expected to some more regulatory reforms to continue to steer the industry.

In additon to this, Sumit Rai, MD & CEO, Edelweiss Tokio Life Insurance, point out three key trends likely to unfold in the new year, including Bima Trinity, Product Innovation and New players getting licensed. He also said, "One of the awaited developments of 2024 is that the government will table the Insurance Laws (Amendment) Bill 2022 as it has the potential to bring another round of positive reforms and bolster growth prospects of the industry."