Bima Sugam can deepen insurance penetration, but must be fair, transparent

Bima Sugam aims to transform insurance with a digital one-stop platform for buying, managing, and claiming policies, targeting "Insurance for All by 2047

The Insurance Regulatory and Development Authority of India (Irdai) has paved the way for an ambitious digital platform, Bima Sugam, which is set to debut in December. This platform will serve as a one-stop marketplace where consumers can compare, purchase, and manage life, health, and general insurance products. With features such as e-KYC, seamless digital on boarding, and policy management, it seeks to bring efficiency, transparency, and trust to a sector often criticised for complexity and opacity. The promise is transformative. India’s insurance penetration stands at just 3.7 per cent, far below the global average of 7 per cent. Despite reforms and the entry of private companies, insurance adoption continues to lag. A unified platform that simplifies access, lowers transaction costs, and fosters competition could democratise coverage, especially at a time when rising health expenses and climate-related risks make insurance indispensable. 

However, the journey to this digital leap is not without hurdles. Bima Sugam has already seen multiple delays, underlining the difficulty of aligning insurers, distributors, and technology partners under one architecture. Smaller insurers fear being overshadowed on a single platform dominated by larger companies, raising concerns about market concentration. Unless the platform ensures a level playing field in visibility, pricing, and consumer choice, the risk of deepening inequalities within the sector cannot be ruled out. 

Equally critical are consumer-facing challenges. A digital marketplace may not automatically translate into adoption, particularly in rural India, where financial literacy remains low. Without targeted outreach, multilingual interfaces, and community-level education, the digital promise could bypass those who need protection the most. Also there are issues of privacy and security. Global experiences show that a single vulnerability in such platforms can erode consumer confidence. For Bima Sugam to succeed, its foundations must rest on strong data-protection protocols, audit trails, and an independent oversight mechanism. 

Grievance redress is another dimension that requires careful design. Policyholders frequently cite difficulties in claim settlement as the most frustrating aspect of insurance. There is also a growing need for transparency and simpler communication in health insurance, especially for critical illnesses. The platform must incorporate transparent dispute resolution, real-time claim tracking, and ombudsman integration. Affordability, too, cannot be ignored. Recently, the Goods and Services Tax (GST) Council decided to exempt individual policies from GST, aiming to ease the premium burden. That said, the broader regulatory vision anchored in Irdai’s “Bima Trinity” — Bima Sugam (distribution), Bima Vistaar (composite products), and Bima Vahak (women-led last-mile outreach) — offers a coherent road map. If executed with sensitivity to inclusion, Bima Sugam can serve as an important medium for achieving the ambitious goal of “Insurance for All by 2047”. The task ahead is to balance scale with fairness, efficiency with security, and access with awareness. India’s financial sector has shown through platforms like Unified Payments Interface that digital infrastructure can be a great equaliser.