Identifying cost-effective and simple ways of distributing insurance is the key to success in increasing insurance penetration, according to T. S. Vijayan, Chairman, Insurance Regulatory and Development Authority (IRDA).
In his keynote address on simplifying insurance for masses at the 7 Global Insurance Summit, organised by Associated Chambers of Commerce and Industry of India (Assocham), here on Wednesday, he said the regulator’s micro-insurance norms had facilitated NGOs (non-government organisations) and SHGs (self-help groups) to sell and service over 50 lakh policies to masses in 2012-13. However, the persistency and claim ratio were low due to inappropriate awareness mechanism, he pointed out.
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“The policy servicing adopted by the insurers is critical in delivering protection. It should be simple and transparent to ensure timely payment of all eligible claims,” Mr. Vijayan said.
Governor of Andhra Pradesh E. S. L. Narasimhan said that there needed to be a lot more transparency in the way insurance selling and claiming procedure was done by the insurance firms. The segment should now focus on the bulging middle-class and senior citizens, he said.
“All the negative aspects of the insurance were never revealed. It’s always an uncomfortable experience when it comes to claims, especially medical. And, insurance policy is the most unattractive proposition compared to other investment options,” Mr. Narasimhan said.
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There had to be some code of ethics for the advertisements to facilitate clearer information on the policies.