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The insurer’s market share mainly depends on the channels of distribution they have adopted to make the business cost-effective. IRDAI’s working paper supported the idea that the lengthier the distribution channel, the more conflict of interest there was, and it had a mediating effect. There is a chance of misrepresenting policy information, which is an outcome of that effect. In India, as per IRDAI, the incurred insurance claim ratio, the ratio of claims settlement against the total premiums received in a year, varies yearly. Even though the ratio indicates the financial performance of each sector, it can also be a benchmark for explaining the scope of the product utilization by the insured. During 2022–23, the ratio ranges between 72 to 86% for the general insurance companies. It also differs for the Fire, Health, motors, and marine sectors. The highest ratio is for the health sector, around 86%. At the same time, the ratio for the domestic travel insurance business is around 19%. Travel insurance is an example of bundling an insurance policy with another product. However, there is no specific information about the scope of bundling of insurance policies and the claims arising out of it. To combat these challenges, innovative solutions must be explored. One such approach is the introduction of modular insurance plans, allowing consumers to customize their coverage based on specific needs without being forced into unnecessary add-ons. AI-driven policy comparison tools can further empower consumers by offering real-time insights into the value of bundled versus standalone options. Regulatory mandates for “opt-out” provisions in bundled offerings can ensure greater autonomy, allowing policyholders to reject unwanted components. Additionally, the implementation of blockchain-based smart contracts can bring transparency by clearly defining coverage terms and pricing, reducing hidden costs. By adopting these solutions, the insurance sector can enhance consumer trust, encourage informed decision-making, and create a more competitive marketplace, ultimately leading to fairer and more accessible insurance options for all.

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Unpacking Insurance: The Challenges and Innovations in Tying and Bundling Practices in Insurance

  • 章节

  • 发表日期：

    2026年

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  • Anu P R,
  • Seema Sinha,
  • Seranmadevi R,
  • Pavan Kumar Raju R

摘要

The insurer’s market share mainly depends on the channels of distribution they have adopted to make the business cost-effective. IRDAI’s working paper supported the idea that the lengthier the distribution channel, the more conflict of interest there was, and it had a mediating effect. There is a chance of misrepresenting policy information, which is an outcome of that effect. In India, as per IRDAI, the incurred insurance claim ratio, the ratio of claims settlement against the total premiums received in a year, varies yearly. Even though the ratio indicates the financial performance of each sector, it can also be a benchmark for explaining the scope of the product utilization by the insured. During 2022–23, the ratio ranges between 72 to 86% for the general insurance companies. It also differs for the Fire, Health, motors, and marine sectors. The highest ratio is for the health sector, around 86%. At the same time, the ratio for the domestic travel insurance business is around 19%. Travel insurance is an example of bundling an insurance policy with another product. However, there is no specific information about the scope of bundling of insurance policies and the claims arising out of it. To combat these challenges, innovative solutions must be explored. One such approach is the introduction of modular insurance plans, allowing consumers to customize their coverage based on specific needs without being forced into unnecessary add-ons. AI-driven policy comparison tools can further empower consumers by offering real-time insights into the value of bundled versus standalone options. Regulatory mandates for “opt-out” provisions in bundled offerings can ensure greater autonomy, allowing policyholders to reject unwanted components. Additionally, the implementation of blockchain-based smart contracts can bring transparency by clearly defining coverage terms and pricing, reducing hidden costs. By adopting these solutions, the insurance sector can enhance consumer trust, encourage informed decision-making, and create a more competitive marketplace, ultimately leading to fairer and more accessible insurance options for all.