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Wednesday, January 27, 2016

Insurance is a service, not a product, says IRDA chief

Speaking at the FINCON 2016, the 17th annual Insurance Conference organised by Federation of Indian Chambers of Commerce and Industry (FICCI), Mr T S Vijayan, Chairman, lnsurance Regulatory and Development Authority of India (IRDAI), focused on three main aspects of the insurance sector: products, technology and customer grievances. About customer grievances, Mr Vijayan said that he was more interested in how insurance companies were handling claims, and not on the fine print of their policy documents. “This is a service, not a product,” he said, and wanted consumers to be aware of their rights. He was against companies questioning whether a victim should have been ‘present at a particular spot at a particular time’. “That should not be asked by the company, it is the work of the police.” Some companies offer consumers the choice of paying their premium at one time or over a period of five years; if the policy offered is declared as a five year policy and the company collects the premium at one stroke, Mr Vijayan was clear that “the difference should be returned to the customer.” He highlighted the changes sweeping the insurance sector in India. Chief among these were the change in the Insurance Act. These changes made it imperative for the regulator to respond in an appropriate manner. Despite this, the industry is very buoyant. However, he observed, that in 2014-15, real premium growth was 1.4 per cent and this highlights the potential for growth at least to catch up with the global standard. “The secret,” he advised companies, “is not on fighting the old but on building the new. Past experience may not be the right guidelines for the future.” The regulator’s chief concern is the customer and the people working in the sector, he disclosed. The insurance sector employs more than 20 lakh people. The opening up of the sector in 2000 brought with it changes and policies have to respond to these changes. The Government is cognisant of the disruptive changes driven by technology. These should be used for the benefit of customers. Mr Vijayan was all praise for the companies that responded promptly to the demands created by the recent floods in Chennai. “That is your moment of truth,” he felt. “When the need arises, you are able to offer support.”