Irdai urges insurers to expand coverage and address emerging risks

MUMBAI: The Insurance Regulatory and Development Authority of India (IRDAI) urged insurance companies to prioritise expanding the number of people covered under insurance, not just improving insurance penetration metrics.

The regulator’s call came at a time when the non-life insurance industry committed over Rs 300 crore over three years to an awareness campaign with the tagline "Achha kiya insurance liya" (Did well by buying insurance).IRDAI member Deepak Sood told industry leaders that companies should address new risks. “The face of risk is changing every day,” said Sood, citing a shift from traditional physical and business risks to emerging threats such as cyber risks that now “sit in our pocket, in our mobile phones.”“Premium could be anything,” Sood said. “If we can keep those premiums low, make it affordable for our people, it doesn't matter what the penetration percentage is, as long as we can reach out.” He identified awareness, affordability, and accessibility as the three pillars necessary to improve insurance coverage.Tapan Singhel, Chairman of the General Insurance Council, warned that India’s low insurance penetration was heightening its economic fragility.

“Every time a catastrophe hits, millions remain uninsured and unprotected,” he said.Singhel cited data to show that general insurance has a lower grievance ratio—0.35 complaints per 10,000 policies—compared to 0.7 for banking and 4 for e-commerce. “It looks like the industry is just a money-making machine. In reality, it delivers to customers at the time of biggest crisis in the best possible manner,” he said, noting that insurers ran a combined ratio of over 100% for 15 years, meaning no underwriting profits.He also pointed to the macroeconomic impact of underinsurance. “A 90+% uninsured SME base causes a 1.8% to 2% fall in GDP growth. When a hurricane strikes Florida, the state's economy grows after. In India, it falls. The difference is insurance.”Singhel cited WHO data showing 10 crore Indians fall below the poverty line annually due to healthcare costs. “Did we do justice by not telling the story that 2.69 crore families benefited last year with Rs 83,000 crore in health claim payouts?” he asked.