Need to Address Vast Protection Gap Through Deeper Penetration, says Inusrance Brokers Association of India

New Delhi: The Insurance Brokers Association of India (IBAI), the apex body of licensed insurance brokers, at its 16th Annual Insurance Brokers’ Summit today, emphasized on the need to address the pressing issue of the vast protection gap through deeper penetration in highly underpenetrated lines of business, while keeping in mind the interest of the policyholders.
The theme for the summit is‘Insurance Brokers: Driving Insurance Penetration While Protecting Policyholder Interests’.The summit underlined the role of brokers as representatives of their customers.
Insurance Regulatory and Development Authority of India (IRDAI) Chairman Subhash Chandra Khuntia released the 4thedition of the ‘IBAI General Insurance Claim Insights for Policyholders Handbook’ at the event. The claims handbook covers the claims related ratios pertaining to Fire, Marine, Motor, Health and Miscellaneous lines of business in addition to the overall claims by all non-life insurance companies in India with the exception of a few specialized insurers. In his statement Mr Khuntia said, “Brokers have the capabilities to provide an array of additional bespoke services and frequently perform these services in global markets for a fee. In India, however, only a fraction of these services is currently provided by brokers-risk management and claims consulting for the insured and CAT modeling and valuation/survey for the insurer.”
The handbook analyzes different parameters related to claims from publicly available data for different insurers, both public and private for the financial year ended March 31, 2019. This compilation of the claims settlement data of various insurers is not available elsewhere and has been collated from individual websites of each insurer. It is one of the first such initiatives to look at insurance transactions in the country from a claims perspective, i.e., from the point of view of policyholders. Insurance brokers, as representatives of policyholders’ interests are uniquely positioned to undertake this initiative.
The fourth edition of the handbook shows a positive trend when it comes to the overall claims settlement ratio which is an important indicator for policyholders to make an informed decision while entering into an insurance contract. The claims settlement ratio for the entire industry grew to 85.18% from 80.77% in the previous year’s analysis for the financial year ended March 31, 2018, however the claim repudiation ratio has marginally increased from 6.43% to 7.47%.
The purely data-driven analysis takes into account only the number of claims and not the claim amounts. Claim amounts are not disclosed in insurers’ publicly available data. The association believes that if the corresponding claims amount are also disclosed in line with most international practices then policyholder will have much richer insights on the claims performance of the insurance companies. The association believes, the handbook will provide a comprehensive resource for policyholdersto objectively compare one insurer with another on their claims settlement history.
Insurance Brokers Association of India, President Mr. Sanjay Kedia said, “In the past decade, the Indian non-life insurance industry has really come into its own with over INR 1.7 lakh crore placed in premium during 2018-19, registering a growth of 13% on a year-on-year basis. For the industry to further thrive and get to the next level of growth, it is imperative that insurance penetration grows to a level comparable to the more developed insurance markets.”
“Insurance distribution needs to be further aligned with what would add maximum value to policyholders in terms of accessibility, coverages, policy placement and claims. As we push for the increase in the uptake of insurance, it is critical to protect the interests of policyholders. In a proactive measure, the IRDAI brought in the Protection of Policyholders’ Interests Regulations way back in 2017 and guidelines were further revised and updated last year. As policyholders’ representative, the insurance brokers should spread the awareness and highlight the rights of policyholders under the regulations. Awareness is key when it comes to the accountability of the insurance industry towards its policyholders. IBAI will continue to champion the cause of policyholders and ‘IBAI General Insurance Claim Insights for Policyholders Handbook’ is one of the key milestones in this journey” he added.
IBAI in association with EY, released a report titled, “Distribution reforms to increase insurance penetration.”The report focuses on how the broking industry can further leverage global best practices and focus on key growth drivers that can help improve the penetration in India.
The summit was attended by more than 300 delegates including CMDs and CEOs representing India’s top life and non-life Insurance companies, IRDAI members, insurance brokers, insurance companies, TPAs, Loss Assessors, customers and other stakeholders from the insurance industry.