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SECTOR: INSURANCE

Overview:

A well developed and evolved insurance sector is a boon for economic development of a country. It provides long-term funds for infrastructure development and concurrently strengthens the risk-taking ability of the country. The Insurance sector in India has reported consistent increase in insurance penetration.

The Indian insurance industry has moved into a more competitive arena with the arrival of private players in the market. Even though the Life Insurance Corporation of India reigns supreme in terms of market share, private companies are gearing up to woo the consumers. Any new player entering the insurance business would try to differentiate its products offering, but it is the service delivery system and grievance redressal mechanism which would become the key differentiator.

With the increase in income and exponential growth of purchasing power as well as household savings, the insurance sector in India would introduce emerging trends like product innovation, multi-distribution, better claims management and regulatory trends in the Indian market.

Types of Insurance

The Insurance Sector is basically divided into two categories – Life Insurance and Non-life Insurance. The Non-life Insurance sector is also known as General Insurance. Both the Life and Non-life Insurance are governed by the IRDAI (Insurance Regulatory and Development Authority of India).

This government organization thoroughly monitors the entire insurance sector and also acts like a custodian of all the insurance consumer rights. This is the reason all the insurers have to abide by the rules and regulations of the IRDAI.

Life insurance companies offer coverage to the life of the individuals, whereas the non-life insurance companies provide coverage with our day-to-day living like travel, health, our car and bikes, and home insurance. Not only this, the non-life insurance companies also provide coverage for our industrial units as well. Crop insurance for our farmers, gadget insurance for mobiles, pet insurance for pets are some of other insurance products being made available by the general insurance companies in India.

Government Sponsored Schemes

The government is also striving hard to provide insurance to individuals of below poverty line category by introducing schemes like:

Pradhan Mantri Suraksha Bima Yojana (PMSBY) – Provides accidental death cover for Rs. 2 lakhs at a very nominal premium of Rs. 12 per year only.

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)- Provides life insurance cover of Rs. 2 lakhs at a premium of Rs.330 per year.

National Health Protection Mission (AB-PMJAY)- also known as Ayushman Bharat. It provides a defined benefit health cover of Rs. 5 lakh per family per year. This cover will take care of almost all secondary care and most of tertiary care medical procedures.

Introduction of these schemes would help the lower and lower-middle income categories to utilize the new policies with lower premiums in India.

With several regulatory changes in the insurance sector in India, the future looks pretty awesome and promising for the insurance industry. This would further lead to a change in the way insurers take care of the business and engage proactively with its genuine buyers.

Some demographic factors like the growing insurance awareness of the insurance, retirement planning, growing middle class and young insurable crowd will substantially increase the growth of the Insurance sector in India.

Initiatives for customer delight

Since liberalization of insurance sector in the year of 2000, it has come a long way. Today, use of technology in the sector has revolutionized the customer experience and engagement by enhancing the overall process. The days are no more when the insurers used to communicate with the customers only during the claims. But, as on date, new technological processes and improvised grievance redressal mechanism are being used to drive product innovations and reinvent customer delight through speedy settlement of consumer complaints.

Protection of Policyholders’ Interests

The IRDAI has framed regulations which prescribe insurers to have in place a policy for protection of consumers interests which shall include enhancing Insurance awareness, defining service parameters, turnaround times, procedure for expeditious resolution of complaints, steps to prevent mis-selling and un fair business practices and steps taken to ensure proper information flow to prospects so as to reduce number of complaints.

Grievance Redressal Mechanism

Having a complaint or a grievance with the insurance company or an insurance intermediary is not uncommon. Various policyholders feel that they have been cheated with respect to their insurance policy. They either feel that the agent sold them a wrong policy or that the insurance company did not fulfill its end of the bargain. The Insurance Regulatory and Development Authority (IRDA) has made sure that there is a grievance redressal process for the aggrieved policyholders. This process starts with the insurance company and escalates up to the consumer forum if the customer does not find the resolution to his satisfaction.

1 - Approaching the Insurance Company

The first step is to approach the insurance company from whom the insurance policy was bought. Every insurance company has a dedicated grievance handling cell as mandated by IRDA. The company lists the details of its grievance cell in the policy document and the same is also available on the website of NCH, wherein, correspondence address, an email address and a contact number of all offices handling complaints are mentioned. The aggrieved policy holder can call the number, write a letter or leave a mail stating the nature of his grievance and the company handles it internally. If no response is received within 15 days, then the complainant can contact the insurance company's regional office stating that his grievance has not been acknowledged or addressed. If there is no response from the regional office as well within 30 days, or if the resolution is not to the liking of the complainant, then he can escalate his matter to the Insurance Ombudsman of his area.

2 - Going to an insurance ombudsman

An insurance ombudsman is a non-judicial arbitrator appointed to handle insurance complaints (pertaining to personal line insurance products) and seeking solutions for the same. The Insurance Ombudsmen hear cases and pass judgments. There are different ombudsmen for different territories and the complainant has to approach the ombudsmen for his territory. The complaint should be referred to the ombudsman within 12 months of the dispute. Beyond this period, no grievance is handled. The aggrieved should submit all relevant information in a specified format and also all documents showing follow-up of the case with the insurer and the insurer's response, if any. The ombudsman has the authority to hear cases up to Rs.30 lakhs and is supposed to give his verdict within 3 months. A decision of the Ombudsman is binding on the insurer and not on the complainant.

3 - Consumer Forum

Consumer forum gives a judicial solution to the grievances. If the complainant is not satisfied with the solution provided by the ombudsman or if the case is beyond ombudsman’s financial authority (30 lakhs), the consumer forum can be his next stop. He can take the help of a lawyer to prepare his case in a specified format. The forum entertains cases only within 2 years from the date of grievance. There are three levels of the forum depending on the claim amount. If the amount is up to Rs.20 lakhs, the forum at the district level would help. If the amount is above Rs.20 lakhs and up to Rs.1crore, it would be undertaken by the state forum. For claims over Rs.1crore, the national forum handles the case. So, seeking redressal of a grievance can be hassle free if the complainant is aware of the procedure as detailed above.

It is playing a pivotal role in redressal of grievances of the consumers by providing advice, information and guidance to empower the consumer as well as persuading business/corporate houses/Govt. organizations for resolution of customer grievance and suggesting them to reorient their policy and management systems wherever required to address consumer concerns and grievances.