BS BFSI Summit: Bima Sugam to transform insurance sector, says industry

Bima Sugam will unify India's insurance market, boost rural reach, and make policies more transparent and affordable, said experts

Bima Sugam, hailed as the “UPI (Unified Payments Interface) moment for insurance”, is poised to transform India’s insurance landscape by creating a unified digital marketplace for all insurance products and is expected to be a game changer for the industry, according to experts at the Business Standard BFSI Insight Summit 2025. 

Industry experts view it as a powerful step toward transparency, affordability, and inclusion — particularly in rural and underpenetrated regions. 

The initiative is expected to simplify policy buying and claims, and lower premiums. It also promises to streamline processes, and intermediaries such as agents and brokers remain essential for personalised advice and last-mile reach. 

 

Amit Roy, partner and leader, insurance and allied businesses, PwC India, said: “The biggest challenge is building trust, not just selling a product. Bima Sugam can bring in transparency, feasibility, and customisation for policyholders. Most importantly, it will add glamour and pride, which the sector needs. It can also help expand the agent base — we have just 2.5 million agents in a country of 1.4 billion, which is extremely low.” 

Sharad Mathur, managing director and chief executive officer, Universal Sompo General Insurance, said: “Bima Sugam aims to reach rural areas and Tier-III/Tier-IV regions, where penetration is low. It will improve accessibility and affordability with advisory-based distribution. The GST reduction of 18 per cent has happened. The moment Bima Sugam launches, we hope about 20 per cent in addition would further come down, which will make it affordable in those pockets and even in metros. So, I think these things are going to bring in a big positive change, and will be embraced by the entire population range.” 

According to Narendra Bharindwal, president of the Insurance Brokers Association of India, Bima Sugam is the next step in India’s digital-insurance journey. It will simplify the purchase and claims process of insurance. 

“If it makes life easier for the insurance policyholder, both on purchase and claims, it is going to do the right thing. However, we must remember that insurance is a ‘push product’. Customers need advice before buying, especially when there are more than 500 health products. Intermediaries — brokers, point-of-sale persons, agents — will remain crucial. So, considering all these factors, the industry, the regulator, and the government have created the distribution architecture. Four million to 4.5 million people, directly and indirectly, are employed in distribution and one of them will be able to pay on a monthly basis. So, currently, we are unclear about how this will get integrated into Bima Sugam,” Bharindwal said. 

According to Debashish Banerjee, partner, Deloitte India, the key is execution. Unlike UPI, insurance has an established ecosystem with brokers, agents, and aggregators. “We need to clarify what Bima Sugam aims to replace or transform. If commissions shift to fees, policyholders could benefit. It should be rolled out geographically first, not by product line, starting with rural India,” he said.

 

Roy also noted that even as Bima Sugam had all the insurance companies and intermediaries participating, it would not threaten the ecosystem of web aggregators.

 

“They have been there for decades and have their own marketplace and customers. Their model is different. Here the idea is to people who have been left out. They would continue to function and this would operate very differently.”

 

Also, after the launch of Bima Sugam’s website, a phased rollout is expected early next fiscal year.

 

Mathur said: “It is in an advanced stage. It needs to be a finely shielded platform and overall it is taking a little more time than expected because we have been thinking that it is another digital marketplace.”