All You Need to Know About Bima Sugam - the Insurance Gamechanger

Bima Sugam, an innovative digital application, is poised to revolutionise the process of purchasing and renewing various types of insurance policies. This platform, scheduled for launch by the IRDAI, aims to provide a comprehensive solution for buying, selling, renewing, and settling insurance claims, all in one convenient location.

Recently, there have been several reports suggesting that the much-awaited Bima Sugam, which is often referred to as a "Gamechanger" by many insurance experts, is all set for its launch, and the platform will soon be available for public use. While there has been no official confirmation on this from the IRDAI yet, the insurance industry is gearing up for the biggest reforms.

However, despite the anticipation surrounding Bima Sugam, many of us are still unaware of this platform and the advantages it brings. This article elucidates the features and benefits of Bima Sugam and how it can streamline the insurance process and enhance customer experiences.

What is Bima Sugam?

In 2022, the IRDAI approved the concept of the Bima Sugam platform. Bima Sugam serves as an online insurance marketplace, similar to an e-commerce platform, where insurers have the opportunity to offer and sell their insurance products, and consumers can buy or renew their policies, raise claims, and receive all the related services at a single place.

Here are a few important things you should know about Bima Sugam:

• Bima Sugam's objective is to deliver a comprehensive digital experience that covers every stage of life and non-life insurance, including policy purchase, renewals, claim settlement, and even agent and policy portability. The platform strives to offer an all-inclusive digital journey for users, ensuring convenience and efficiency throughout the insurance process.

• The implementation of Bima Sugam will occur in two stages. In the first phase, the platform will serve as a data bank for insurance and intermediaries. Whereas in the subsequent phase, the platform is planned to include listing insurance products.

• Bima Sugam, which was originally planned to launch on January 01, 2023, has been postponed. A recent Bloomberg report suggests that the portal is now expected to become operational on August 01, 2023.

• The Bima Sugam platform is anticipated to levy fees on insurance companies for various transactions such as policy sales, renewals, and claims. Additionally, there may be charges associated with inquiries made on the platform. However, there has been no official communication regarding this from the IRDAI.

• During the month of September 2022, the regulatory body put forth guidelines suggesting the dematerialisation of all insurance policies into individual electronic insurance accounts. These accounts would be mandatory and unique to each policyholder. However, the government has not provided any update regarding the same yet.

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What Are the Key Benefits of Bima Sugam?

1. Affordable Insurance Coverage:

As of now, web aggregators and insurance agents receive fixed commissions on selling insurance policies, which can contribute to higher premiums for customers. However, with Bima Sugam selling policies directly through its platform, customers can enjoy the benefit of reduced commissions. By cutting out intermediaries and enabling direct policy sales, Bima Sugam aims to enhance affordability and ensure that customers receive cost-effective insurance options.

2. No Need to Maintain Physical Policies:

Another benefit of Bima Sugam is the elimination of the need to maintain physical policies. Instead, customers will have access to soft copies of their purchased policies through an electronic insurance account. The conventional process of relying on agents and brokers often involves substantial paperwork. However, Bima Sugam simplifies and secures this process by removing the necessity for physical documents. Customers will no longer be burdened with the task of managing and preserving physical paperwork, and this not only streamlines their lives but also enhances security. Furthermore, the absence of paperwork will facilitate easier renewals and claims, making the overall insurance experience more straightforward and hassle-free.

3. Convenience:

Bima Sugam will offer convenience to future policyholders as it addresses various obstacles that they will encounter while fulfilling their insurance requirements. By eliminating the necessity of filling out lengthy forms and reducing commissions paid to intermediaries, Bima Sugam will streamline the insurance process. Moreover, it will expand the accessibility of insurance companies and maximise convenience through a multitude of advantages. Instead of visiting numerous websites, customers will be able to conveniently review and purchase policies from a single platform approved by the regulator. This consolidation of services will not only save time but also enhance transparency, reducing instances of mis-selling and fraud. Bima Sugam will ensure that individuals can conveniently meet their insurance needs while enjoying a simplified and secure experience.

4. Better Claim Experience:

Bima Sugam will offer the advantage of better claim settlement, enhancing the overall claim experience for policyholders. The platform will ensure that all policy-related information is readily available on the portal, enabling the insured or their nominee to conveniently access these details while filing a claim. This accessibility to policy information will streamline the claim process, reducing potential delays or errors. Besides, Bima Sugam will facilitate the smooth porting of policies or agents, simplifying the transition for policyholders who wish to change their existing policy or agent. With improved access to information and streamlined processes, Bima Sugam aims to enhance the efficiency and effectiveness of claim settlements, providing a better experience for policyholders.

When Will the Bima Sugam Be Launched?

The original launch date of Bima Sugam, initially set for January 01, 2023, has been rescheduled. According to a recent report by Bloomberg, the portal is now projected to be operational by August 01, 2023. Once it commences its operations, Bima Sugam is also anticipated to support emerging start-ups that currently provide sandboxed insurance products, aiming to establish a level playing field for all insurers.

KETKI JADHAV is a Content Writer at PersonalFN since August 2021. She is an MBA (Finance) and has over seven years of experience in Retail Banking. Ketki specialises in covering articles around banking, insurance, personal finance, and mutual funds and has been doing it for over three years now.

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Disclaimer: This article is for information purposes only and is not meant to influence your investment decisions. It should not be treated as a mutual fund recommendation or advice to make an investment decision.