IRDAI calls for affordable insurance premiums amid rising prices

The Insurance Regulatory and Development Authority of India (IRDAI) has directed insurance companies to make insurance products more affordable. This directive is part of IRDAI’s vision of achieving ‘insurance for all’ by 2047.

Rising premiums are putting essential coverage out of reach for many, especially the elderly.

During the “Insurance for All” vision meeting held in Mumbai on August 23-24, industry leaders and regulators discussed strategies to address the affordability crisis.

A key focus was leveraging insurtech (technology-driven insurance solutions) to reduce operating costs and, in turn, lower premiums.

In an earlier conversation with CNBC-TV18.com

Rahul Mishra, Co-Founder and Director, Policy Ensure, shed light on the key drivers behind the rise in insurance premiums.

“Rising healthcare costs are a direct result of medical cost inflation, which also impacts insurance claims and payments. Insurance companies modify premiums to reflect these rising medical expenses,” Mishra said.

He noted that an increase in the frequency of claims, driven by factors such as an aging population and the rise in chronic diseases, requires higher payouts from insurers, leading to higher premiums.

The situation is further aggravated by the increasing costs associated with the treatment of seasonal diseases.

Recent data from Policybazaar indicates a 150% increase in the average size of seasonal illness claims over the past three years.

Diseases such as dengue, malaria and gastroenteritis have pushed up average treatment costs to ₹1.5 lakh, which now accounts for 33-40% of all seasonal disease claims.