Uncertainty looms over launch of Irdai's ambitious Bima Sugam project

Industry players, who are also investors in the project, say it is unlikely the project will meet the announced launch date of April 2025, with few updates on its progress

The insurance regulator’s ambitious project to create an Amazon-like digital platform for buying, selling, and servicing insurance policies – Bima Sugam, hailed as a 'UPI moment' for the industry by the current chairman of the Insurance Regulatory and Development Authority of India (Irdai) - is yet to materialise despite extensive discussions since the idea was first mooted. What's more there is little clarity even among industry players as to when the platform is likely to be officially launched.

 

Following a meeting in June 2024 to review the status of the Bima Sugam project, Irdai chairman Debasish Panda had stated that the first phase of Bima Sugam would be launched in April 2025.

 

With barely three months to the deadline, industry players express little confidence that the project will materialise in any form by the said date.

 

"I am not sure if Bima Sugam will be launched in April 2025, as we do not have much update on what are the developments. We have taken board approvals for funding the project, but, there isn't much clarity on the progress of the project and what stage it is in. As those investing in the project, we must at least have some updates on the project. The only major update we have is that the CEO has been appointed," said the chief executive office of a private sector insurance company, on the condition of anonymity.

 

On November 1, 2024, Prasun Sikdar took charge as the first MD & CEO of Bima Sugam for a three-year period. Additionally, ExecutiveAccess has been hired as the HR consultant for recruiting officials to Bima Sugam. EY is also helping the regulator on the project.

 

Bima Sugam will be backed by the regulator, the Life Insurance Council, and the General Insurance Council, with insurance companies investing money in the project. All insurance companies are expected to have equal shareholding in the project. The capital requirement for Bima Sugam has already increased to Rs 500 crore from the previously estimated Rs 100–Rs 200 crore.

 

The idea, initially proposed by Panda in 2022, has seen several projected launch dates, including January 2023, June 2024, August 2024, and most recently April 2025, yet neither the regulator or the platform itself have provided any updates on its progress.

 

“Insurers do not have enough clarity about Bima Sugam and when it will be launched. With the kind of capital we are putting in, we must at least get some monthly update about the progress of the project.  We also have questions coming from our board on the developments of the project. I don't think that it could be launched in two months," said the CEO of another private sector insurance company anonymously.

 

Echoing similar sentiments, the CEO of a third private sector insurance company stated that while their board has approved the investment in Bima Sugam, they remain uncertain about its launch timeline, with the only development they are aware of being Sikdar's appointment.

 

Panda, at a public event in October last year, had said that the implementation of the Bima Sugam is at an advanced stage. “The appointment of other key management personnel (for Bima Sugam) is also at an advanced stage of getting completed and soon we should have the entire leadership team in place. We are also in the process of onboarding the system integrator – the technology service provider – and hopefully we would see the first phase of Bima Sugam’s launch soon,” he had said at the time.

 

According to Panda, Bima Sugam will be a public digital infrastructure project, keeping the policyholder at the centre, and will offer an end-to-end journey of the lifecycle of the product and beyond. It will help customers exercise their choice, and distributors will benefit, too, as they will be able to complete a transaction at a cheaper price and in less time.

 

Bima Sugam India Federation, the not-for-profit entity backed by Irdai, will house the platform, which aims to democratise insurance in India, potentially becoming 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.

 

It is a part of the Bima Trinity, including Bima Vistaar, the insurance product which will in turn be sold by Bima Vahaak – the women centric agents’ force who will sell this product - on the Bima Sugam platform.