head of insurance He was speaking at the Annual Insurance Summit organized by the National Insurance Academy (NIA) on Thursday.
The theme of the summit was to close the insurance protection gap.
Naveen Tahilani, CEO, Tata AIA Life The insurance company said that though there has been progress in persistence levels and claim settlement ratios of all top insurers were above 98%, underwriting standards have to be improved to reduce rejections.
Tahilyani said, “When we take a policy we should be sure of the customer. Small amount of rejection should not happen as it should be taken care of at the underwriting level.”
He said the protection gap in India ranges from 83% to 92%, with the life insurance gap narrowing. But it is still higher than developed markets such as Hong Kong, Australia and Singapore, and developing markets such as China, with a 70% gap.
SN Rajeshwari, Member Distribution, IRDAI said that the industry should jointly take ownership of bridging the gap through better access using digital technology, data and micro insurance.
“Out-of-pocket expenses (OOP), high cost of treatment and communicable and lifestyle diseases are major contributors to the protection gap. Technology has been a great help in quick settlement of claims, checking fraudulent claims and providing end-to-end solutions for insurance The originator can be the customer,” Rajeshwari said.
NIA director G Srinivasan said penetration in general insurance is less than life insurance, with only 5% of people having home insurance, and 12% having health insurance.
“With most people employed in the informal sector, insurance is vital to their well-being, but somehow consumers are indicating that they do not need insurance,” Srinivasan said.
IRDAI’s Rajeshwari said that the village adoption insurance companies proposed by the regulator can be a way to raise awareness.
Tata AIA Life’s Tahilani said companies need to stop relying on medical tests to underwrite insurance and access data. He said, “We should engage with the customer more than once a year instead of getting the premium. Maybe there are some products that allow the premium to be reduced when a person’s health improves, thus encourage customers.”
Life Insurance Corporation of India (LIC) Chairman MR Kumar said that though government schemes like Ayushman Bharat have helped in the spread of insurance, there is a need to further improve the reach.
Distribution channels like POS and CSC can fast-track orientation, lower cost and simpler mono-line products digitally insurance penetration Kumar said in rural areas.