Chennai, Dec 22 : The Indian insurance sector adapted to the changing landscape during the year 2023 with some regulatory changes, digitalisation, said top industry officials. The year also saw the government not proceeding in favour far reaching controversial amendments to the insurance laws that stood the test of time. 'The year 2023 saw some market-moving developments for the industry including the government's decision to levy tax on income arising from insurance policies with an aggregated premium worth Rs 5 lakhs every year, starting April 2023,' Sumit Rai, Managing Director and CEO, Edelweiss Tokio Life Insurance Company Ltd told IANS. He said that there was a sustained emphasis on digitalisation to reimagine customer and distributor management processes. 'The Insurance Regulatory and Development Authority of India (IRDAI) brought multiple reforms, focussing on three prominent themes ' strengthening the ecosystem, improving accessibility & reach, and safeguarding policyholders' interest,' Rai added. The year that is going to end saw IRDAI trying to ease the way of doing business for the insurers ' life and non-life- by cutting down the paperwork. 'The introduction of 'use and file' method for launching life insurance products dispensing with filing of some documents gave the insurers the freedom to design products as well as fixing accountability on the insurer by filing compliance certificates by the CEO,' C.L. Baradhwaj, Executive Vice President (Legal & Compliance, Future Generali Life Insurance Company Ltd told IANS. He said that the IRDAI deregulated the payment of commission to the intermediaries, issued guidelines on remuneration for Non-executive Directors and Key Management Persons in order to promote accountability of senior management team by linking their performance and remuneration to key company performance parameters. Baradhwaj said the sectoral regulator in order to increase the insurance penetration brought in a new distribution channel at the village level through its guidelines on 'Bima Vahaks' to market parametric product 'Bima Vistaar.' According to Anil Kumar Aggarwal, Managing Director and CEO, Shriram General Insurance Company, the sector adeptly adapted to a changing landscape, prioritising digital transformation. 'Regulatory changes influenced market dynamics, urging companies to enhance flexibility, innovation, and responsiveness,' Aggarwal told IANS. As regards the industry trend, Aggarwal said the digitalisation emerged as a transformative trend and major players invested in the same. 'Rapid adaptation allowed us to align our services with evolving consumer expectations,' Aggarwal added. With regard to mergers and acquisition (M&A) activity in the sector, Aggarwal said it was moderate, reflecting a cautious approach. 'Strategic alignments were observed, signaling the industry's proactive response to evolving market dynamics and fostering a more competitive landscape. A measured acceleration in M&A activity is plausible next fiscal year. Companies are likely to explore synergies to navigate challenges and foster a more resilient and competitive industry landscape,' Aggarwal remarked. One of the disappointments for the insurance industry in 2023 was the decision of the government not to move ahead with the controversial amendments to the insurance laws that was proposed in 2022. By amending the insurance laws, the central government had proposed to allow regional insurance companies, reduce minimum startup capital from Rs.100 crore, change investment norms and other measures. The first Chairman of IRDAI N.Rangachari had told IANS that measures proposed by the government may result in mushrooming of small insures and the return of pre-1956 period. Prior to 1956, there were several hundreds of small life insurers who were issuing policies in a restricted manner and sold in an unrealistic manner, while claims were not paid. Queried about their expectations as to 2024 Aggarwal said it would be transformative, with continued digital integration, regulatory clarity, and strategic partnerships being pivotal for sustained sectoral growth. On his part Rai said the IRDAI licensed three new players in 2023 and it is expected more number of players to be allowed next year. 'IRDAI has said that it is looking to issue licenses to 20 new insurers in the immediate future. Additionally, the regulator is also likely to relook the capital requirements, making it entry of new players easy. With an increased competitiveness in the market, the sector will see more innovation, improved distribution models, automation and more,' Rai said. 'One of the awaited developments of 2024 is that the government will table the Insurance Laws (Amendment) Bill 2022 as it has the potential to bring another round of positive reforms and bolster growth prospects of the industry,' Rai added. He said the Bima Trinity - Bima Sugam (online marketplace), Bima Vistaar (affordable protection to masses) and Bima Vaahak (women centric distribution channel)- initiative of IRDAI with a target to provide insurance for all by 2047 is expected to take off next year at different intervals. 'We expect the regulator to proactively push the industry to leverage technology including new-age solutions like artificial intelligence and machine learning to create better and simplified solutions (insurance products). We will see more niche products coming into the market in the medium-term as the overall efforts of the regulator through initiatives like state-level insurance project provide higher clarity of nuanced needs of the customers across geographies,' Rai said. The year also saw the four government owned general insurance companies - National Insurance Company Ltd, Oriental Insurance Company Ltd, United India Insurance Company Ltd and The New India Assurance Company Ltd ' carrying out restructuring measures. The rejig measures were suggested by the consultancy firm EY. (Venkatachari Jagannathan can be reached at v.jagannathan@ians.in) /IANS