The Indian parliament has passed the Sabka Bima Sabki Raksha (Everyone is insured, everyone is secure) (Amendment of Insurance Laws) Bill, 2025. One of the main features of the new amended Act is to allow up to 100% foreign direct investment in Indian insurance companies, opening doors to more foreign players to India. We speak with Bajaj General Insurance’s Dr Tapan Singhel about how the new amendments will help India achieve better insurance penetration and enhance insurance awareness among people.
The new Act amends three Acts related to Indian insurance sector, namely, The Insurance Act,1938, The Life Insurance Corporation Act, 1956 and The Insurance Regulatory and Development Authority Act, 1999.
The new reforms are aimed at extending insurance coverage to people, households and enterprises, deepening insurance coverage, providing ease of doing business, improving regulatory oversight and governance.
100% FDI in insurance companies
Speaking with Asia Insurance Review, Bajaj General Insurance Managing Director and CEO Dr Tapan Singhel said, “This is a landmark step for the country. The move to allow 100% Foreign Direct Investment (FDI), along with the reduction in capital requirements for reinsurance, sends a strong message that India is opening up its insurance landscape in a meaningful way. Within hours of the announcement, several global players reached out, expressing interest in exploring India more seriously.
“Greater participation means deeper penetration, wider distribution and a stronger ability to ensure that every household is protected during adverse events. If even 1,000 companies set up operations, the potential FDI inflow could be around $120bn, and this scale can generate nearly 25m direct and indirect jobs.”
Mr Singhel said, “The Act also places considerable responsibility on the regulator, which is important because customer-centric supervision and development have to go hand in hand. With the goal of having every household insured by 2047, this reform can accelerate growth and directly contribute to India’s GDP by about 3-4% over time. This is just the beginning, and the momentum ahead will be transformative.”
MGAs are recognised
The Amended Act formally recognises Managing General Agents (MGAs) for the first time. Speaking about the role of MGAs in shaping the future of distribution and innovation in insurance in the country Mr Singhel said, “The recognition of MGAs is a very positive development. Their inclusion in the Act signals an intent to encourage innovation, deepen distribution strength and diversify the way products are created and serviced.
“MGAs can bring expertise in underwriting and claims, and their agility allows them to experiment with new customer segments, digital models and differentiated offerings.”
Insurance is fundamentally a distribution-led business, not just in India but globally. While the direct-to-customer share remains small, MGAs can expand the reach of insurers and help accelerate penetration at scale.
Mr Singhel said, “This is why their formal entry into the regulatory framework matters as they add depth to the ecosystem and bring new capabilities that complement insurers.”
He said, “We did hope for broader distribution reforms such as open architecture to come in at this stage, but these developments will happen step by step. The most encouraging aspect is that the government listens, and many suggestions from the industry have already been reflected in the Act.
“MGAs are a strong beginning, and they will play a meaningful role in strengthening the insurance marketplace going forward,” said Mr Singhel.
Awareness creation
According to an estimate the industry annually on the whole collects a premium of about INR12,000bn while the spending on creating financial awareness is just about INR40bn. Speaking about how the industry is working to create insurance awareness so that India can achieve ‘Insurance-for-all’ by 2047 mission Mr Singhel said, “Awareness is at the core of the ‘Insurance-for-All’ by 2047 mission.
“The General Insurance Council’s “Achha Kiya Insurance Liya” (Good, we bought the cover) awareness campaign has already created a substantial shift in how people think about insurance. Through programmes like (PMFBY) Prime Minister’s Crop Insurance Scheme, (PMJAY) Prime Minister’s Public Health Scheme and (PMSBY) Prime Minister’s Accident Insurance Scheme, insurance has reached rural and low-income communities in a meaningful way, supported by insurers actively improving awareness by engaging, educating and supporting people on the ground.”
Mr Singhel said, “Alongside this, every insurer has rural and social sector obligations/ commitments, which ensure that we reach geographies and groups that were historically underserved. The regulator has also introduced the lead insurer model, where each state is assigned to a specific insurer. This allows for a focused, local approach through roadshows, partnerships with state bodies and community-level engagement that builds trust.”
Bajaj General Insurance is strengthening this effort by designing solutions like state specific offering called Apke Liye Health Insurance plan, tailored to local healthcare realities.
Catastrophic events and penetration
Urban floods and other catastrophic events in their immediate aftermath do generate lot of queries, however, only a miniscule percentage of these are converted into actual insurance customers. Mr Singhel said, “We are definitely seeing a shift in how customers respond immediately after such catastrophic events. Earlier, people would only inquire; today, a large proportion actually go ahead and buy the cover. Motor Third Party insurance is compulsory, but customers are now choosing comprehensive plans with add-ons like zero depreciation, roadside assistance, engine protector, and consumables cover. What was once optional is now viewed as essential.
“As an industry, we, insurers, have adapted our offerings to the changing climate and emerging claim patterns. With more transparent communication and better-designed products like “V-pay” add-on that takes care of everything from engine protection to everyday scratches, people now understand that insurance is not an extra cost; it is what financially secures them when extreme weather strikes.”
“We are seeing higher conversions because awareness is rising. More customers are opting for comprehensive protection, and that is helping families build financial resilience in the face of increasing climate risks,” said Mr Singhel.
Miniscule home insurance
Speaking about home insurance, which is hardly 1% of the total industry business, Mr Singhel said, “Home insurance continues to remain under-penetrated in India, with a protection gap of approximately 95%, and the reasons are primarily behavioural rather than structural.
“Human beings are not wired to see risks. Even though catastrophic events are increasing, people tend to believe ‘it won’t happen to me,’ and that mindset significantly affects action.”
Mr Singhel said, “Despite a home being the most significant financial investment for most families, home insurance isn’t compulsory. As a result, many postpone the decision, with most purchases happening only when banks require it for a home loan.”
Affordability isn’t a barrier, as home insurance in India is very affordable and offers broad coverage, including structure, contents, and devices, at nominal premiums. The regulator, Insurance Regulatory and Development Authority of India has also brought in the ‘Bharat Griha Raksha’ policy, a standard home insurance product that gives customers comprehensive protection in a simple and easy-to-understand manner.
Mr Singhel said, “The real challenge is awareness; many people don’t realise how accessible and beneficial home insurance is, with even options of getting a “new for old” coverage. With better communication, growing industry efforts, and rising climate risks, adoption will steadily increase, unlocking immense potential for Indian households.”
Man and machine
Speaking about a balanced and judicious mix of man and machine, especially in the retail lines like travel and home insurance Mr Singhel said, “Technology has transformed how insurance is discovered, bought, and serviced, but it can never replace the human element at the heart of our industry.
“I have always believed that AI will not replace humans, rather, humans who understand and use AI effectively will replace those who don’t. Technology boosts efficiency and accessibility but remains a means to an end.”
He said, “Insurance is fundamentally about trust and conversations. It is not a natural pull product, so conversations, guidance, and reassurance become very important. Human empathy allows us to understand customers deeply and show how insurance supports them when challenges arise.”
In products like travel and home insurance, there is already a healthy balance of man and machine where digital platforms make processes seamless, while AI and ML personalise offerings. Yet, agents and customer-facing teams provide the compassion and clarity customers need, especially during claims or resolving concerns.
Mr Singhel said, “The winning model is a balanced blend of technology and empathy. When digital efficiency is complemented by human understanding, we create a scalable and genuinely customer-centric ecosystem.’
He concluded saying, “While there is still work ahead, the combined efforts of the regulator, government, and industry are steadily expanding awareness and moving us towards
universal insurance coverage by 2047.” A