Hanut Mehta, CEO and Co-Founder of Bimapay, said while recent reforms have improved the ‘how’ of insurance delivery, the ‘what’ in terms of product design still requires further refinement.
He pointed to hyper-personalisation through modular and usage-based insurance as a potential area of development, particularly for gig workers, rural customers and first-time buyers.
He noted that current offerings often follow a uniform structure, which may not align with diverse income patterns and risk profiles. According to him, insurance products that better reflect individual usage and lifestyle risks could improve accessibility and adoption.
Premium financing and policy continuity
Mehta described premium financing as a mechanism that enables insurance premiums to be paid in instalments, with a lender paying the insurer upfront and the policyholder repaying over time.
He said this structure differs from personal loans, which are general-purpose credit products, whereas premium financing is linked directly to insurance policies and is designed to support continuity of coverage.
He added that policy lapsation remains a recurring issue in the Indian market, often linked to liquidity constraints and irregular payment cycles. According to him, converting annual premiums into monthly payments could reduce lapsation and help policyholders retain long-term policy benefits.
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Underwriting for informal and gig economy segments
On underwriting challenges, Mehta said traditional credit assessment methods rely heavily on formal income documentation, which may exclude segments such as gig workers and small entrepreneurs.
He suggested that alternative data sources, including digital transaction history and platform-based earnings data, could be used to assess repayment capacity. He also highlighted phased or tiered coverage models, where insurance limits increase based on repayment behaviour over time.
He added that embedding insurance products within digital platforms used by workers could reduce operational friction and improve access.
Demand-side constraints despite supply expansion
Commenting on broader industry developments, Mehta said initiatives such as Bima Sugam and ongoing regulatory reforms have improved supply-side efficiency in insurance distribution.
However, he said, demand-side challenges remain — including product complexity, mismatch between annual premium structures and monthly income cycles, and continued reliance on assisted distribution models.
He noted that improving product simplicity and aligning payment structures with consumer cash flows could support broader adoption.
MSME liquidity considerations
For MSMEs, Mehta said upfront insurance premium payments can impact working capital availability. He said premium financing can help distribute costs over time, potentially easing cash flow pressure and aligning payments with revenue cycles.
He added that such structures may allow businesses to maintain liquidity for operational needs while continuing to meet insurance requirements.
Embedded insurance and payroll integration
Mehta also pointed to growing use cases for embedded insurance within HR platforms, payroll systems and employee benefit aggregators. He said such systems can support automated deductions and reduce policy lapsation by integrating insurance payments into salary flows.
He noted that access to workforce data through payroll systems could also support more structured underwriting and product design based on employee life stages and income data.
Long-term outlook for financing models
Looking ahead, Mehta said premium financing is expected to become more integrated into the insurance purchase process over time, with customers increasingly opting for instalment-based payment structures.
He said as digital infrastructure and underwriting systems mature, financing options may become a standard feature within insurance platforms, reducing the need for separate customer action to access them.
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