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The Insurance Regulatory and Development Authority of India (Irdai) has directed insurance companies, which will be shareholders in Bima Sugam - its ambitious project to create an Amazon-like digital platform for buying, selling, and servicing insurance policies — to inject an initial capital of Rs 300 crore by the end of this month, according to multiple sources familiar with the development.
This was communicated to the insurers at 'Bima Manthan', a two-day event hosted by the insurance regulator, where industry issues were discussed.
"During the Bima Manthan this time, the insurance companies have been asked to submit the initial capital for Bima Sugam by the end of February. We are speaking to our board for these funds," said the managing director (MD) and chief executive officer (CEO) of a private sector life insurer, who was present at the meeting.
“We have to contribute nearly Rs 5 crore for Bima Sugam, each one of us contributing towards the initial capital of Rs 300 crore. Our board has approved the same. We have to give these funds by the end of this month as per the discussion in the Manthan this time," said the CEO of a private sector general insurer.
The capital requirement for Bima Sugam has increased to Rs 500 crore from the previously envisaged Rs 100 crore–Rs 200 crore.
The launch of Bima Sugam has been delayed multiple times but Phase I is now expected to finally be launched in mid-2025. The idea, initially proposed by the regulator in 2022, has seen several projected launch dates that were subsequently pushed back.
Often hailed as a 'UPI moment' for the insurance industry, Bima Sugam is designed as a public digital infrastructure project, keeping the policyholder at the core to offer an end-to-end journey of the lifecycle of the product and beyond.
The platform’s aim is to democratise insurance in India, potentially becoming the first of its kind globally. This single-window digital platform is expected to serve as a comprehensive marketplace where consumers can compare, purchase, and manage insurance policies across life, health, and general insurance sectors. Additionally, it will also benefit distributors immensely as they will be able to complete a transaction at a cheaper price and in less time.
Bima Sugam is a part of the so-called 'Bima Trinity' envisaged by Irdai. The schemes include Bima Vistaar – a rural focused composite insurance product - that will be sold by Bima Vaahak, a women centric agents’ force, on the Bima Sugam platform.
In a statement last week, Irdai said, Bima Sugam India Federation (BSIF), the entity set up to build and operate Bima Sugam platform, has completed its incorporation and other foundational actions and is now ready to be capitalised by industry participants.
Additionally, the portal for Bima Vaahaks, the localised women-centric insurance field sales force, is nearing completion and set for a soft launch for onboarding ‘Vaahaks’ starting April 2025.
