With the Indian insurance sector standing on the verge of significant transformation on the back of new initiatives, such as the Bima Sugam portal, the expectation from Union Budget 2024 are high.
Ahead of Union Budget 2024, the general insurance industry has shared its expectations ranging from tax incentives to the EV sector to more focus on cyber insurance
With the Indian insurance sector standing on the verge of significant transformation on the back of new initiatives, such as the Bima Sugam portal, the expectation from Union Budget 2024 are high.
The general insurance sector is eagerly expecting reforms that will increase the affordability and accessibility of insurance products. The upcoming Bima Sugam portal will serve as a centralised database for policy purchases, portability, and claim settlements, thus ensuring better service for policyholders.
In March 2024, the Insurance Regulatory and Development Authority of India (Irdai) approved the setting up of Bima Sugam — an online common marketplace for buying, selling, and servicing all types of insurance policies.
Industry stakeholders have also called for tax incentives, especially bringing more reliefs for the electric vehicles (EVs) segment. Further, there is an industry-wide call for distribution efficiency, and regulatory reforms, and incentives supporting innovation.
Says Ashwani Dhanawat, executive director and chief investment officer, Shriram General Insurance Company: “We hope higher budgetary allocations to the insurance sector, which will enhance our ability to provide comprehensive coverage to a broader segment of the population. Extending the benefits under Section 80EEB for EVs beyond March 2023 will encourage more people to adopt eco-friendly transportation options and will further promote sustainable practices.”
Section 80EEB of the Income-tax Act, 1961 allows policyholders to claim tax savings of up to Rs 1.5 lakh on interest paid on a loan to purchase an EV. At present, tax deduction benefits are only available if the loan is approved between January 1, 2019 and March 31, 2023.
Says Neel Chheda, chief underwriting and data science officer, Tata AIG General Insurance: “We hope the government takes some initiatives, such as increasing tax incentives for insurance offerings to make them more affordable, particularly for the underserved segments. Further regulatory reforms that support digital innovation are necessary, as is the simplification of compliance processes, so that insurers can deliver more efficient and customer-centric services.”
Rakesh Jain, CEO of Reliance General Insurance commended the Irdai’s initiatives for implementing cashless systems to emphasising ombudsman schemes. However, he emphasised the need to protect against unforeseen disruptions, such as climate change and economic development related risks, through furthering sustainable development goals in the upcoming Union Budget 2024.
Jain said, “Introduce financial support or tax benefits for extensive insurance on EVs. Provide tax advantages for cyber insurance, particularly for small and medium businesses to enhance their ability to withstand cyber risks and data breaches.”
Rahul M. Mishra, co-founder, and director, Policy Ensure, suggested increasing the cap for insurance premium payments under Section 80C of the Income-tax Act, 1961.
He said: “Regulatory measures, such as easing minimum capital requirements for new insurers and introducing a composite license, could make insurance more widespread and financially inclusive. There is an industry-wide call to relax point of sales persons (POSPs) regulations and allow agents to collaborate with multiple insurers.”