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The Insurance Regulatory and Development Authority of India (Irdai) has asked insurance companies to inject an initial capital of Rs 300 crore by the end of this month into Bima Sugam, its Amazon-like digital platform for buying, selling, and servicing insurance policies, 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 are 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 MD & CEO of a private sector life insurer, who was present at the meeting.
“We have to contribute nearly Rs 5 crore for the 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.
The capital requirement for Bima Sugam has increased to Rs 500 crore from the previously envisaged Rs 100 to Rs 200 crore.
While SBI Life Insurance and HDFC Life Insurance have received board approval for investing Rs 6.6 crore each, ICICI Prudential Life Insurance has received the board’s nod to invest up to Rs 10 crore in Bima Sugam. Separately, in November 2024, Life Insurance Corporation of India (LIC) informed the exchanges that it had invested Rs 1 lakh for an 8.33 per cent stake in Bima Sugam. The state-owned New India Assurance and ICICI Lombard General Insurance have received board approvals to invest Rs 5 crore each.
After multiple delays, Phase I of Bima Sugam is expected to be launched in mid-2025. The idea, initially proposed by the regulator in 2022, has seen several projected launch dates.
Often hailed as the UPI moment for the insurance industry, Bima Sugam keeps the policyholder at the core and aims 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. It will also benefit distributors who can complete a transaction at a cheaper price and in less time.
Bima Sugam is a part of the Bima Trinity envisaged by Irdai. The trinity includes Bima Vistaar – a rural-focused composite insurance product that Bima Vahaak, the women-centric agents, will sell 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 the Bima Sugam platform, had completed all its incorporation and other foundational actions and was now ready to be capitalised by the enthused Industry participants. The portal for Bima Vahak, the localised women-centric insurance field sales force, is nearing completion and is set for a soft launch for onboarding ‘Vahaks’ in April 2025.
