Introduction: A Game-Changer for Indian Insurance

India’s insurance sector is on the brink of a digital transformation. Bima Sugam, often described as the “UPI of insurance,” is being developed as a one-stop digital marketplace where insurers, intermediaries, and customers can seamlessly buy, sell, service, and settle insurance policies.

The Insurance Regulatory and Development Authority of India (IRDAI) has tied the initiative to its vision of “Insurance for All by 2047” — ensuring every Indian citizen and enterprise has access to affordable insurance protection.

To ensure a smooth and secure adoption, Bima Sugam will be rolled out in phases: starting with insurers, followed by intermediaries, and eventually direct customer access.

What is Bima Sugam and Why Does It Matter?

At its core, Bima Sugam is a Digital Public Infrastructure (DPI) for insurance — similar to how UPI transformed payments.

• For customers: It will simplify policy buying, renewals, servicing, and claims into a few clicks.

• For insurers: It provides a standardized integration and direct distribution channel.

• For intermediaries: It offers digital tools without eliminating their role in advisory and servicing.

Bima Sugam is expected to cut paperwork, improve transparency, and bring millions of underinsured Indians into the insurance fold.

The Phased Rollout: Step-by-Step

Phase 1: Insurer Pilots

• Select insurers will connect their product catalogues and underwriting systems to test real-time quotations, issuance, and e-KYC.

• This controlled rollout ensures technical stability before opening the platform wider.

Example: A life insurer may pilot issuing term insurance policies on Bima Sugam, testing payment integration and digital signatures.

Phase 2: Intermediaries Onboarding

• Agents, brokers, and banks will gain access.

• They can continue advising customers, but with digital tools for policy comparison and service requests.

• Ensures existing distribution channels evolve rather than get displaced.

Example: A rural insurance agent could instantly compare crop insurance premiums from multiple insurers on Bima Sugam, helping farmers make informed decisions.

Phase 3: Customer Access

• The platform opens directly for retail and corporate customers.

• Customers can compare products, buy policies, renew online, and even lodge claims in one place.

• Integrated with Aadhaar, DigiLocker, and UPI, making processes faster and paperless.

Example: A small business owner could log in with Aadhaar, fetch KYC documents from DigiLocker, pay via UPI, and instantly receive a digitally signed policy.

Why a Phased Rollout?

• Technical complexity: Insurers have varied legacy systems. Pilots allow smoother integration.

• Governance and compliance: Phases give time to fine-tune grievance redressal, data protection, and dispute resolution.

• User trust: A stepwise approach prevents overwhelming customers and ensures a seamless experience.

Historical Context: Building on Past Efforts

Bima Sugam is not India’s first digital push in insurance. It builds on earlier initiatives like:

• E-insurance accounts (2013) to hold policies digitally.

• Insurance repositories that allowed policy dematerialisation.

• DigiLocker integration for KYC and document storage.

The difference? Bima Sugam will unify all these elements into a single public-facing marketplace, with scale similar to UPI.

Governance and Funding Model

Unlike private insurance aggregators, Bima Sugam is industry-owned and funded jointly by insurers and intermediaries, ensuring neutrality and inclusivity.

A governing body, with representation from insurers, intermediaries, and regulators, will set operating rules. This structure helps build trust across stakeholders while avoiding monopoly concerns.

Global Parallels

Globally, few countries have attempted a unified insurance marketplace at this scale. For instance:

• UK has multiple private aggregators, but no single industry-owned marketplace.

• China has experimented with government-linked health insurance digital platforms.

Bima Sugam’s DPI model could become a template for other emerging markets.

Benefits at a Glance

For Customers:

• Transparent premium comparisons

• Paperless onboarding with e-KYC

• Faster claims settlement

For Insurers:

• Wider reach and reduced acquisition costs

• Standardised data exchange

• Easier compliance reporting

For Intermediaries:

• Digital tools to enhance advisory services

• Greater access to multiple product lines

• Continued role in customer servicing

Challenges and Risks

• Governance clarity: Stakeholders must agree on decision-making powers.

• Integration hurdles: Smaller insurers may face higher IT costs.

• Timeline delays: Past schedules have slipped; further adjustments are possible.

• Data privacy & security: As a centralised platform, Bima Sugam must adopt strong encryption, consent frameworks, and audits.

FAQs

1. Will insurance agents lose relevance?
No. Bima Sugam will empower agents with better digital tools, not replace them.

2. How is my data protected?
The platform is expected to comply with India’s data protection laws, with encryption and consent-based data sharing.

3. Can customers use it directly without an agent?
Yes. Customers will have the choice to transact directly or via intermediaries.

The Road Ahead

Bima Sugam is not just a platform — it’s a transformational bet on how insurance can be delivered in India. If successfully executed, it can:

• Deepen insurance penetration,

• Empower agents and brokers,

• Cut inefficiencies for insurers, and

• Give customers unprecedented convenience.

Just as UPI redefined digital payments, Bima Sugam could redefine insurance access in India. The phased rollout is the right step to balance ambition with execution.