| Bima Sugam could give customers a digital route to compare insurers on pricing, product features and service quality.
The proposed Public Insurance Registry would provide a common, verified information layer across the insurance ecosystem. Bima Sugam’s proposed pull based model could give customers a more direct way to seek and purchase policies across insurers. The digital marketplace is part of wider IRDAI distribution reforms covering commissions, remuneration disclosure and expense limits. |
Insurance comparison shopping could become easier as the Insurance Regulatory and Development Authority of India (IRDAI) prepares to launch Bima Sugam, a digital insurance marketplace that is expected to go live by November, alongside a common digital information layer that could allow customers to access more consistent information on products and insurers.
Bima Sugam is being envisaged as a customer-facing Market Infrastructure Institution (MII), while the proposed Public Insurance Registry (PIR) would provide the common digital infrastructure and verified information layer for the wider insurance ecosystem. The framework is intended to create a digital, pull-based alternative to traditional insurance distribution, allowing customers to seek out insurance products rather than relying entirely on products presented by distributors. The proposals form part of IRDAI’s wider overhaul of insurance distribution economics.
The proposed system could make it easier for customers to compare insurers and products on pricing, product features and service quality. IRDAI’s proposed MII framework envisages platforms providing insurers a level playing field to compete on product features and performance, pricing, and the quality of services related to claims settlement and grievance redressal. The proposals are still subject to consultation and could change before implementation.
The PIR would serve a different purpose from Bima Sugam. It is proposed as a business-facing digital public infrastructure that would allow insurance participants to discover, verify and exchange information using common standards. The registry is intended to address information and interoperability gaps while keeping underlying records with the institutions that hold them.
This could give customers and intermediaries access to more standardised and verified information when evaluating insurance products. The proposed registry is also expected to cover information across the insurance lifecycle, including policy and claims records, servicing and grievance-related information, subject to consent, access and data-governance safeguards.
The shift could also change the way insurance is sold. Instead of a distribution model in which the customer is approached by an agent, broker or other intermediary and then offered a selection of products, the proposed MII structure is designed around a pull-based model in which customers can actively seek products through digital channels. This does not mean traditional distributors will disappear. IRDAI’s proposed framework continues to recognise insurance distribution entities and persons, while digital infrastructure is intended to provide an additional route to market.
Bima Sugam has been under development for several years, with insurers working on technology integration. IRDAI had earlier targeted initial motor, health and term insurance products for rollout by September-end. The regulator subsequently indicated that the broader marketplace is likely to launch by November and will be rolled out in phases.
Distribution reforms
The proposed digital infrastructure is also part of a broader attempt to change the economics of insurance distribution. IRDAI has proposed product- and segment-specific commission limits, greater disclosure of distributor remuneration and measures to curb incentives that could contribute to mis-selling. The regulator has also proposed a five-year glide path for changes to expense-of-management limits.
For consumers, the practical impact will depend on how many insurers and products are integrated into Bima Sugam, how comparable the information becomes and how the platforms present pricing, product terms and service-related information. The proposed framework does not remove the need for advice or assisted distribution, particularly for complex insurance products.
The immediate change, therefore, is not the creation of a single website that will automatically rank every insurance policy. It is the development of a common digital infrastructure that could make insurance information more accessible and standardised, while giving customers a more direct route to compare and purchase products across insurers.
