An Analysis of Insurance Tender Opportunities in India

Insurance is a financial arrangement that provides protection against financial loss or risk. It involves an individual or entity (the policyholder) paying a premium to an insurance company in exchange for coverage. The insurance company, in turn, agrees to compensate the policyholder for specified losses or damages, as outlined in the insurance policy. Key elements of insurance are premiums, policy, coverage, claim, deductible, and underwriting.

Insurance services with the government and Public Sector Undertakings (PSUs) in various ways, reflecting the regulatory framework, public policy objectives, and the role of the government is to oversee and manage how insurance works to make sure it follows the rules. The government might have its own insurance companies to provide services to people. These companies play a big role in offering insurance services to the public. The government and insurance companies work together to create plans that protect people in different situations. For example, there might be insurance plans for health, crops, or accidents. The government can make some types of insurance compulsory, like car insurance to cover accidents. Employers may have to get insurance to help workers if they get hurt on the job. When the government is involved in big projects like building roads or bridges, they use insurance to protect against problems that might happen. In the event of a major issue such as a flood or fire, insurance can assist individuals and businesses in recovering. Sometimes, the government gives people benefits or advantages for using insurance. For example, you might pay less tax if you have certain types of insurance. This analysis furnishes an in-depth examination of the insurance requisites presented by the Government of India in the period 2022-2023.

Tender notices are routinely released by approximately 8000 procuring agencies operating within the Government of India. Within the past year, 630 of these agencies collectively issued 3144 tenders specifically for insurance like cyber risk insurance policy,  group health insurance, personal accident insurance policy, mega risk insurance policy and machinery breakdown insurance, indicating a considerable demand for such services within the government. Notably, a significant portion of these agencies operate within the bank sector. Additionally, entities from diverse sectors such as power, industry, agriculture, rural development, education, and transport also demonstrate a notable demand for insurance services.

In the banking sector, financial institutions like The Rajasthan State Co-operative Bank Ltd., Baroda Uttar Pradesh Gramin Bank, Bank of Maharashtra, Union Bank of India, Reserve Bank of India, and IDBI Bank purchase various types of insurance tenders. The Rajasthan State Co-operative Bank Ltd. has issued a tender to select an insurer for a comprehensive cyber risk insurance policy, reflecting the industry’s shift towards online processes and the imperative to minimize cyber risks. Notably, Canara Bank and the Department of Cooperation have released tenders for group personal accident insurance policy and group health insurance to safeguard their extensive workforce. With a workforce of 86,919 employees, Canara Bank is actively involved in offering both health and accident insurance, including personal accidental insurance (GPA) coverage for salary account holders. Furthermore, IDBI Bank Ltd has initiated the empanelment of an insurance broker, and the renewal of insurance policies for Reserve Bank of India staff and debit/credit card holders. Additionally, there are insurance arrangements for property and other assets of the Reserve Bank of India. This integration of banking and insurance services ensures comprehensive risk management within the sector.

In the power sector, various entities rely on insurance services to mitigate risks and safeguard their operations. Entities like the West Bengal Power Development Corporation Ltd, National Thermal Power Corporation Limited, UP Rajya Vidyut Utpadan Nigam Ltd, Telangana Power Generation Corporation Limited, and Rajasthan Rajya Vidyut Utpadan Nigam Limited consistently issue tenders for insurance services. There are a total of 269 Thermal Power Plants, with 138 in the public sector and the remaining 131 in the private sector. In this RRVUN has recently published a tender for a mega risk insurance policy and other related policies, seeking proposals from Public Sector General Insurance Companies for its RVUN Power Plants and Insurance coverage for plant assets and asset insurance within the sector.

In the industrial sector, entities such as the Department of Sugar, Brahmaputra Cracker And Polymer Limited, GSPL India Gasnet Limited, Karnataka Co-Operative Milk Producers Federation Ltd, and GAIL (India) Limited regularly issue tenders for a range of services, including group term insurance service, personal accidental death insurance coverage for farmers, building insurance coverage, employee group medical insurance, and machinery breakdown insurance. Tendersniper has categorized 257 tenders specific to the industrial sector, enabling us to segregate and present insurance tenders separately for your convenience.

In rural development, entities like District Magistrate South 24 Parganas and Lakshadweep District release tenders specifically related to ship vessel insurance. The Shipping Corporation of India, which originated with 19 vessels, has evolved into a conglomerate boasting 80 ships with a total deadweight of 59 lakh (5.9 million) tonnes. These  ship vessel insurance tender encompass various aspects of the shipping trade and then the tender for hull and machinery insurance for Thilaakkam in Lakshadweep District.

In the transportation sector, insurance policies, are carried out by organizations like U.P. State Road Transport Corporation (UPSRTC), a public-sector passenger road transport corporation serving Uttar Pradesh and neighboring states in North India, administer insurance policies. UPSRTC’s bus services extend to over 355 cities across India, and the corporation, with around 52,000 employees, the government published a tender for a premium rate for the issuance of a term group insurance policy of Rs 400,000 per person, covering approximately 3,627 regular employees.

The Airports Authority of India (AAI) has published a tender for insuring various vehicles. AAI manages the operations of 137 airports, including 23 International Airports, 81 Domestic Airports, 23 Domestic Civil Enclaves, and 10 Customs Airports. Various airport ground vehicles, such as pushback tugs, catering trucks, de-icing vehicles, snow-plowing, -sweeping, and -blowing vehicles, airstairs, “Follow me” cars, airport service cars, apron buses, belt loaders, container loaders and transporters, water trucks, lavatory-service vehicles, refueling trucks, and fire trucks, fall under the administration of AAI. To address the insurance needs of these vehicles, the government has published a tender for services like Motor Insurance Service – 4 Wheeler, Renewal of Comprehensive Insurance policy for AAI Vehicles/Equipment, and other Assets Insurance Services, including Electronic Equipment Insurance, Standard Fire & Special Perils Cover, Storm, Typhoon, Hurricane, Tornado, Flood and Inundation (STFI) Cover, Earthquake Cover, and Theft/Burglary Cover, with optional features.

A few other agencies such as Bangalore Metro Rail Corporation Limited, Bangalore International Airport Limited, and V.O.Chidambaranar Port Trust purchase insurance policies. These policies encompass a range of coverage, including unnamed accidental group insurance for contractual drivers and conductors, insurance renewals for vehicles, commercial general liability insurance, comprehensive coverage for specific equipment and assets, and coverage for employees in the unfortunate event of their demise during service. Moreover, there are specialized services such as marine and transit insurance for cargo exports/imports and an all-risk open policy for inland transit insurance of electronic spares sent via air, road, post, or courier. This intersection of transport and insurance plays in safeguarding the operations and assets within the transport sector. Beyond these sectors, tenders are published in areas like urban development, agriculture, animal husbandry and fisheries, art and culture, civil supplies, and environment and forest.

The quarterly analysis of insurance tenders reveals a fluctuating trend: 596 tenders in October to December 2022, marking the baseline; a subsequent increase to 845 tenders in January to March 2023, reflecting a 41% rise; a further rise to 1011 tenders in April to June 2023, indicating a substantial 19% increase; and finally, a decrease to 688 tenders in July to September 2023, representing a 32% decline from the previous quarter.

To enhance transparency, the government should implement an open tendering process for procurement, widely disseminating these tenders across numerous web portals. As of December 17th, 2023, the Tendersniper portal indicates 59 active insurance tenders. Among these, Delhi and West Bengal jointly contribute 11 tenders, representing 19%, followed by Tamil Nadu with 9 tenders (15%). Maharashtra presents 8 tenders, accounting for 14%, and both Karnataka and Uttar Pradesh contribute 7 tenders, collectively making up 12%. Jammu and Kashmir present 6 tenders, constituting 10% to the overall analysis.

This analysis underscores a significant need for insurance tenders across India, with the majority of these solicitations originating from the banking and power sectors. Engaging in the tendering process initiated by Indian government agencies can be highly advantageous for those offering insurance services.