Bima Sugam's capital requirement goes up significantly to Rs 500 crore

The capital requirement for the insurance regulator’s ambitious project, Bima Sugam, an online marketplace to buy, service, and sell insurance products, has increased to Rs 500 crore from the previously envisaged Rs 100–200 crore, according to multiple sources aware of the development.

 

During the two-day Bima Manthan held in Hyderabad, insurance companies were informed of the revised capital requirement for Bima Sugam, amounting to Rs 500 crore over 4–5 years. Of this, Rs 330 crore must be provided immediately, with the remaining Rs 170 crore to be contributed after two years.

 

Bima Sugam India Federation (Bima Sugam), a not-for-profit entity backed by the Insurance Regulatory and Development Authority of India (Irdai), will house the Bima Sugam platform. This initiative aims to democratise insurance in India and has the potential to become the first of its kind globally.

 

This single-window digital platform will serve as a comprehensive marketplace where consumers can compare, purchase, and manage insurance policies across life, health, and general insurance sectors.

 

Bima Sugam is part of the Bima Trinity, which also includes Bima Vistaar—an insurance product—and Bima Vahaak—a women-centric agent force that will sell this product on the Bima Sugam platform.

 

All insurance companies will have equal shareholding in the venture. Ernst & Young (EY) has been engaged as a consultant to execute the Bima Sugam initiative.

 

“EY has prepared a business plan approved by the board of directors of Bima Sugam. According to this plan, the company will require Rs 500 crore of capital over the next 3–4 years. Of this, Rs 330 crore will be brought in immediately to cover the first two years, while the remaining Rs 170 crore will be raised after two years,” said an industry official aware of the development.

 

Another official added, “All companies with shareholding in Bima Sugam will contribute Rs 330 crore, with Rs 165 crore each from life and general insurance players. This is required for technology enablement, and Bima Sugam is also seeking office space in Mumbai.”

 

"We have secured board approval to provide around Rs 6.5 crore to the platform envisaged by the regulator," said the chief executive of a life insurance company, adding that discussions on the capital requirement were held during the Bima Manthan in Hyderabad earlier this month.

 

On November 1, Prasun Sikdar took charge as the first managing director and CEO of Bima Sugam for a three-year term.

 

Two additional officials are in the process of being appointed. ExecutiveAccess has been hired as the HR consultant for recruiting these personnel.

 

Bima Sugam is being hailed as a game changer for the insurance sector, as it is expected to facilitate the sale of a wider range of products and enhance insurance penetration in the country. Payments for these products will be processed through the Unified Payments Interface (UPI), and underwriting by respective insurance companies will occur immediately, generating digitised policies that will be sent directly to customers.

 

Irdai has not provided a specific timeline for the platform's launch. However, industry insiders anticipate that Bima Sugam will go live in the first half of the next financial year (FY26).

 

In October, Debasish Panda, chairman of Irdai, stated that the implementation of Bima Sugam is in advanced stages.

 

“The appointment of other key management personnel for Bima Sugam is also nearing completion, and soon we should have the entire leadership team in place. We are in the process of onboarding the system integrator—the technology service provider—and hopefully, we will witness the first phase of Bima Sugam’s launch soon,” said Panda.