Source: The Times of India
Why in News?
The Insurance Regulatory and Development Authority of India (IRDAI) has asked insurers to reduce operational and distribution costs to make health insurance policies more affordable, particularly for the “missing middle” segment.
What is the Issue?
- Health insurance penetration in India remains low.
- Rising premiums and high management expenses make policies unaffordable for many households.
- A large section of the population is:
- Not poor enough to qualify for government schemes like Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, and
- Not financially strong enough to afford comprehensive private insurance.
Key Directions by IRDAI
1. Reduce Expenses of Management (EoM)
- Cut administrative and distribution costs.
- Rationalise commissions and operational overheads.
2. Improve Efficiency
- Encourage digital onboarding and claims processing.
- Minimise customer acquisition costs.
3. Promote Product Innovation
- Expand use of the “Use and File” system to allow faster product launches.
- Develop affordable, simplified health covers.
