Insurance Regulator IRDAI unhappy with practice of companies seeking info for policy premium quote
New Delhi, July 1: While looking for an insurance policy, you would have been asked for personal information, like mobile phone number, by an insurance company before even a simple premium quote is provided.
Such practices are called ‘dark patterns’ and the Insurance Regulatory and Development Authority of India (IRDAI) plans to look into this issue to enhance oversight.
Dark patterns refer to manipulative design features in digital interfaces or sales processes that nudge, pressure or mislead consumers into making decisions that primarily benefit companies while appearing legitimate.
The IRDAI feels the practices of insisting on collecting personal information before providing a simple premium quote creates unnecessary friction and erodes trust among prospective policy holders.
“Product discovery is hidden behind the walls of personal information,” according to IRDAI Chairman Ajay Seth.
The industry regulator has roped in the Institute of Public Auditors of India to independently study and monitor such practices.
Dark patterns can take several forms, including pre-ticked add-on riders that increase premiums without adequate disclosure, guilt-inducing language that discourages customers from opting out during the free-look period, nudging buyers towards higher-commission products or burying key charges and exclusions deep within lengthy policy documents.
Addressing such practices could be critical to improve insurance adoption in India, where penetration remains well below global averages.
In April, IRDAI had directed all regulated entities to conduct a self-assessment of their compliance with norms on dark patterns and submit reports to the regulator.
According to a Swiss Re report, insurance penetration in India stood at 3.7 per cent in FY25 compared with the global average of 7.3 per cent.
Insurance density, measured as annual premium per capita, was $97 in India against the global average of $943.
While the life and general insurance industries grew by 15.7 per cent and 9.3 per cent, respectively, in FY26, insurers are increasingly competing with mutual funds and equities for household savings.
Industry estimates point to a more moderate growth trajectory in FY27, with life insurers expected to grow 8-11 per cent and general insurers posting high single-digit growth.
Foreign Players
The regulator has already approved the licence of one foreign general insurer, while another foreign general insurer is awaiting IRDAI approval to enter the Indian market, he said, without disclosing their identities.
He also said the first set of products is expected to become available on the Bima Sugam digital marketplace by the end of September. The platform, whose website was launched last September, is envisaged as a unified digital marketplace connecting insurers, intermediaries and customers on a single interface. (BVI)
