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StudyandDataCompilationbyArthashayTrainingandConsultancy,Puneon

ChangingcustomerexpectationspostliberalisationofinsuranceSector

A.Lliberalisationofinsurancewasexpectedtobring

Bettercoverageandpenetration Toaugmentflowoflongtermfinancialresourcestosupportthegrowthofinfrastructure Betterservices Efficientclaimsettlement Improvingcustomerknowledgeandawareness

Someoftheamendmentsaddedwere

Prioritytohealthsector Policyholdersfundstobedeployedinsocialsectorandinfrastructure Compulsoryruralbusinesscoverforunorganized,informalandeconomicallybackwardclass FineofRs.25Luptosuspensionoflicense,incaseoffailuretofulfillsocialobligations

B.CustomerexpectationsfromAgent/FC/Advisor

Transparentinformationonproduct,commission,benefitsandconstraints(limitations). Knowledgeandskillstoprovidecustomisedsolution Regularbriefs(visits),underwritingguidance,fundswitchingguidance,knowledgesharingand

macropictureofgeneralinvestmentoptions

RenewalPremiumintimationandcollection Facilitationduringclaimsettlement

C.CustomerexpectationsfromInsurancecompanies

Complianceandprocesscheckonagents Transparentandtrustworthytransactions Considerateredressalandcommitmenttopromises,particularlyverbal.Nottoraiselegal(proof

seeking)andterms&conditionsshieldatthetimeofkeepingthepromises.

Ensuringdeliveryofrenewalnotices Maximumpossiblemodesforpaymentofpremium Servicechargeissuetoberesolved(whobearthecost) Moredistributionarmsandcustomerfriendlyproducts Focusonconsumereducationandknowledge Correctinsurancedisclosures,lessoffineprintspeciallydevilpoints(likehiddencosts,

punishingconditionsetc.)

Tollfreehelplinecapabletohandleandresolvecustomerqueriesandissues

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Privilegetochangeagentincaseofcompellingreasons CustomerexpectationsfromInsurancecompanies

D.CustomerexpectationsfromInsuranceRegulatory&DevelopmentAuthority(IRDA)

Needtoplayactiveroleasaregulatorforbenefitofallthestakeholders Needtobetough,knowledgeable(Indiaspecificaswellasglobal),customersensitiveand

impartial

Needtoimprovesectorsimageamongstcustomersaswellaspeerinstitutions(SEBI,IT,PFRDAetc)

Insuranceawarenessandknowledgespreadshouldbethehighestpriorities.Directexposuretocustomersshouldincreasesubstantially.

SeriousrelookatAgentscurriculum(prelicensing)andtrainingprograms.Agentproductivityandcustomersatisfactionindexareatseriouslylowlevels.

Drivesocialandruralobligationsevenmorerigorouslyinletterandspirit Needtohave(andexhibit)bettercontroloveroperations,customerredressal,productsand

compliance(bothinternalaswellasexternal)ofitsmembers

Musthavepolicytowardsorphaned agents(FCs /Advisors)andorphanedcustomers. Thisneedstobedealtwithutmosturgency.

Tackleissueslikepoorpersistency,highattrition,missellingcomplaints,lackoftransparency,decliningconsumertrustetc.

Beproactiveandvisionaryratherthanbeingkneejerkreactive,opportunisticandshortsighted Needtosetupsystemofindependentchecksandbalances,insteadofsolelydependingonthe

datasuppliedbyinsuranceproviders.

Needtoreworkpositionsonkeymaninsurance,employeremployee,partialassignmentofpolicy,

insurance

as

collateral

asset;

channel

specific

product

differentiation

especially

in

the

contextofIndianmarketandinvestmentculture.Thegenericapproachcanbemoldedabitto

accommodatesomeofthecustomerexpectationstowardsinsuranceasasset,without

damagingthecorespiritofinsurance.Onthecontrary,thismighthelpinsurancegelbetterwith

otherfinancialproductsandservices.Theissuesrelatedtopaidupvalues,surrendervalues,lock

inperiodsarereasonablyaddressed,already.

Maybeitisimportanttostatethatobsoleteandrigidactuarialpracticesalongwithinefficientoperationsaredrivingpremiumhighandthetrendislikelytocontinue.Thisisexactlyopposite

totheexpectationsfromliberalisationofsector.IRDAneedtoaddressthis.

Alterationofpremium,term,ridersandsumassuredmaybeconsideredinthepolicy. Willfulrepresentationofwrongpremiumpaymenttermsbytheinsurancecompaniesshouldbe

severelydealtwithasthisisoneoftheprimereasonsforlackofvaluationsonthebasisof

embeddedvalue. Thelongtermramificationsofmisrepresenteddatabythecompanieswould

besevere.

Companysbalancesheetsshouldincludetheknownriskfactors,whichinfluenceparameterslikeValueInForce(VIF), EmbeddedValue(EV),profitabilityetc.IRDAmusthavesome

mechanismtoverifythedatasubmittedbythemembers.

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IRDAshouldhavetheentiredatabaseandanalysis,accessibletoeverybody.Currentlythedataavailableisnotcomprehensiveenoughandverydifficulttoworkuponforresearchand

consultancypurposes.

ThiscompilationwasdoneduringtheperiodofJanuarytoApril2010.Theconsultationswereheld

acrossthemetro,urban,semiurbanaswellasruralareas.Weinteractedwithcustomerswhowere

ragingfromexpertstonovicesinthefieldofinsurance. Thiscompilationwassolelydoneforinternal

purposesonly. Thoughsomeoftheobservationsarequiteharshandsomeexpectationsmaybeabit

impracticaltoimplement,itisworthknowingexactlywhatthecustomerswereexpecting.

Iamsharingthispurelyfortheunderstandinganditisnotintendedtohurtanyoneoranyorganisation.

Thisreportisnotajudgmentalcallonoperationsofanyentitybutrepresentthederivedinferences

fromtheavailabledataandinformation.

Hopethisisofsomeusetoyou.

WarmRegards,

GirishTiwaskar

ArthashayTrainingandConsultancyServices

M. 9890979711