What Is Bima Sugam? What Are Its Benefits?

The Insurance Regularity and Development Authority of India (IRDAI) has approved an online platform where all types of insurance policies will be sold. The online platform will be tentatively called Bima Sugam. The key stakeholders in this online platform, Bima Sugam, are General Insurance Council with a 30% stake, the Life Insurance Council with a 30% stake, Online PSBs with a 35% stake and Brokers Association with a 5% stake. The IRDAI has asked companies to start Bima Sugam by January 2023. Agents, insurers, intermediaries and customers will get access to the digital platform and all exchanges will be monitored by IRDAI.

In this post, we’re going to help you with complete information about what Bima Sugam is and how it can be beneficial for you. Let’s first start with understanding this term.

Also Read: IRDAI's Bima Sugam Plan Could Disrupt Insurance Distribution

Bima Sugam will be a one-stop platform for every type of insurance need like health, vehicle, life etc. It is an Amazon-like online platform with a variety of insurance policies. This digital transformation in the insurance world will allow customers to make policy purchases directly from the insurance firms of their choice. Also, the insurers will require to convert their existing policies into Demat forms within a year after the regulations come into effect. However, the entire cost for fresh and existing policyholders will be borne by the insurers. Moreover, Bima Sugam shall have linkages with the National Securities Depository Limited (NSDL), the Unique Identification Authority of India (UIDAI), the Central Depository Services Limited (CDSL) and more.

According to IRDAI, Chairman, Debasish Panda, Bima Sugam will be a game changer. It will help the insurance industry in achieving many objectives, he added. He also mentioned that this digital platform would be responsible for sales, claims and services.

The Bima Sugam digital platform will offer many benefits to customers and providers. Let’s have a look:

1. The new digital platform will provide more security to the customers as there will be no requirement for maintaining and safekeeping the physical document. It also aims to make the process hassle-free for the policyholder at the time of renewal with no paperwork. Also, there will be E-BIMA or E-IA account for policyholders in Demat format to create a framework and give a further push to end-to-end digitisation of the ecosystem. 

2. Bima Sugam will also clear the way for the new entrant start-ups who are embracing a Sandbox approach in terms of unique offerings like OPD covers, and so on.

3. It will help individuals review and buy policies from one single regulator-approved platform rather than visiting different insurers’ websites.

4. The individuals will also get the benefits of reduced commissions as the companies will be directly selling the policies on the platform. However, insurance intermediaries will also be on board. But, industry officials say that commissions paid to the intermediaries will also come down. It will result in cheaper policyholder premiums and increased investments in insurance-cumulative programmes.

5. Bima Sugam will undoubtedly help customers who face difficulty with existing agents in terms of services. And, it will also help customers get better and more secure after-sales services.

6. The next big benefit is for the existing insurance repository as they will also get a boost in terms of all insurance companies subscribing to it as an approved person.

Once launched in January 2023, Bima Sugam will bring you tons of benefits. It allows you to buy and renew your insurance policies from the comfort of your home while keeping all of your personal information safe.