New Delhi, Feb 19 (IANS) The Indian insurance sector has witnessed impressive growth over the last two decades and the government’s allowance of 100 per cent foreign direct investment (FDI) in the sector would further accelerate growth, attracting significant foreign capital and boosting innovation, according to a new report.
India’s insurance sector has witnessed significant growth and development over the past few years.
The domestic insurance market has grown at a CAGR of 17 per cent over the last two decades and is expected to reach a size of $222 billion by 2026, according to a TeamLease Regtech report.
A typical single-entity insurance company with a corporate office in a single state needs to deal with 2,236 unique compliances. The annual compliance obligations rise to 4,638 once the frequency of compliances is factored in. The company must also obtain 38 licenses, permissions, and approvals under 27 acts.
According to Sandeep Agrawal, Co-founder and Director, TeamLease RegTech, the Indian insurance sector, driven by increased awareness, favorable regulatory changes, and enhanced private sector participation, has witnessed impressive growth over the last two decades.
“However, it is crucial to understand the complexities of compliance management that companies face in this space. Insurers operate within an exceptionally complex compliance framework, with a typical general insurer managing over 4,500 regulatory obligations annually, including critical requirements on solvency margins, anti-money laundering, and policyholder protection,” he elaborated.
Embracing compliance automation will be transformative for the industry, supporting the shift towards a cashless and paperless economy.
Automation will enable insurers to streamline operations and meet evolving compliance demands with greater efficiency, said the report.
The report concluded with recommendations for compliance reforms like a strong compliance culture led by company leadership, technology-driven solutions to automate compliance processes, and implementing data security measures to build customer trust.
Further, regulators should consider introducing a single-window licensing framework to simplify approvals for insurers, encouraging RegTech adoption, and creating a centralised digital repository for regulations allowing companies to focus on growth and innovation, said the report.