Insurance sector: Customer took centre stage in 2014

Sunil Sharma, chief actuary, Kotak Mahindra Old Mutual Life Insurance, says, "There has been a significant surge in the stock market, which has led to superb returns from unit-linked funds which invest in equities. However, the return to policyholders should be looked at over the entire term of the contract without worrying too much about unrealised gains or losses."

Policy servicing is another area on which life insurers are focusing. Kshitij Jain, managing director and chief executive officer, Exide Life Insurance, says, "Emphasis on policyholder protection and grievance redressal has led to a fall in the number of complaints, having a favourable impact on customer satisfaction. Regulations for direct fund transfer to customer bank accounts for survival and maturity benefits are also welcome moves."

Insurers have also started focusing on digitising policies. Following the weak response to its related pilot project, the Insurance Regulatory and Development Authority, or Irda, plans to come out with final guidelines on digitisation in the next few months. Under the pilot, Irda had asked insurers to tie up with repositories so that policyholders can keep their policies in digital form. The project was implemented for two months from July 1. During the pilot, each life insurer had to convert a minimum of 1,000 or 5% of existing and new individual policies, whichever was less, into electronic form. No company could meet the target.

OUTLOOK FOR 2015

Experts say insurers will invest in digitisation, making the claim process easier, lowering the processing cost. The thrust will be to reduce expenses by reducing the policy issuance cost. Most important, some companies may get listed on stock exchanges as the government has issued an ordinance increasing the foreign direct investment cap in the sector from 26% to 49%.

HEALTH INSURANCE

It was a good year for health insurance with adoption of standard definitions, features and formats. For example, the entry age for all health insurance policies is now at least 65 years, renewability is for life and critical illnesses have standard definitions. V Jagannathan, chairman cum managing director, Star Health Insurance, says, "The new health insurance regulations implemented last year by Irda have ensured transparency.  There has been a rise in online sales as well."

Naveen Kukreja, group CMO, policybazaar.com, says, "From the consumer perspective, the launch of low-cost Ulips and break-in policies in the two-wheeler segment has been a major highlight."

Some insurers also launched innovative plans covering treatments abroad. Most health plans are for treatments in India. Also, with steep rise in medical inflation, several insurers have started offering covers of up to Rs 1 crore.

In 2015, more innovative products are likely to be launched. Sanjay Datta, chief, underwriting and claims, ICICI Lombard General Insurance, says, "We believe that the year ahead will be good for the general insurance sector, including for the larger pieces of health and motor insurance. With changes expected on the policy front and strengthening of the macro-economic scenario, the industry is poised to enhance its value proposition across the product and service spectrum. It should be an exciting year for health and motor insurance customers."

FULL COVERAGE: 2014 Year In Review