The insurance regulator is planning a platform for personal insurances called Bima Sugam with the objective of increasing insurance coverage in the country. A neutral platform, it bears the promise of bringing to one marketplace insurers, various intermediaries, product information, purchase, payments, renewals, dematerialisation and, hopefully, claims.
Here is a wish list of things it can offer. This is partly a dream list and partly information and facility gaps I have gleaned from the questions asked by readers of this column.
Too many options confuse. A platform like Bima Sugam will quickly demonstrate the mind-boggling choice in insurance offerings. Full marks to the industry for introducing a wide variety with insight and intuition. But too much choice befuddles the customer.
Mutual funds sorted out this problem recently and sanity was approached with SEBI laying down limited categories and variants in the nature of funds, returns options and risk profile, not to speak of standardising nomenclature. In short, transparency and comparability.
The insurance regulator too has approached this issue, but from a different angle, by fashioning standardised policies in leading categories which each insurer is mandated to offer.
Coverage, exclusions, co-pay, excess, floater sum-insured, top-up, liability, comprehensive… The prospective insurance customer doesn’t even want to enter this dense cloud of words. Adding to the confusion is the high visibility advertising and the flood of marketing phone calls, SMSes and, lately, WhatsApp messages as well.
Buying mobile phones is easier and more fun! The price difference between 256 / 128 GB memory makes for a simple decision if one needs the extra storage and at that price.
Missing renewals is another problem. Reminders come too early / too late / get lost in the post or in the spam folder. Or, the insured just clean forgot. Renewals are beneficial to both the insured and the insurer and rejection of renewal is likely to be relatively rare anyway. A simple auto-renewal facility can help. It can even be on-account and subject to underwriting or rating decisions (like revision in premium because of a claim or age slab), and can ensure that cover does not stop due to oversight.
Wishes are endless. More in the next instalment of Cover Note!
(The writer is a business journalist specialising in insurance & corporate history)