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Digital Disruption in Insurance: Stock market discipline can drive innovation

April 05, 2018

It was a milestone year (2017) for India’s insurance sector, as insurers continued to ride the wave of investor demand for insurance IPOs. India’s century-old insurance market, which had been relatively staid in terms of innovation for decades, is transforming to improve solvency standards and deliver new competitiveness and efficiencies. As the government seeks to liberalise the sector, improve efficiencies at state-owned insurance companies and grow the pool of insurance capital eligible for investment in other Indian assets, investors have been responding positively to the opportunities in the sector. Recent IPOs in domestic insurance closed multiple times oversubscribed, with pricing coming in at the top of pricing ranges, although stock market performance since listing has been mixed. The focus on growing the insurance sector is attracting interest of foreign investors. Following the government’s move to raise FDI ceiling in the sector in March 2016 to 49% through the automatic approval route, up from 26%, FDI inflows in the services sector (which includes banking, insurance and other financial services) accounted for the second largest share of FDI inflows to India in the July-September quarter of 2017 at $2.9 billion. This accounted for 19.2% of total FDI inflows over the period. The attractiveness of the insurance sector to investors has been driven in part by the potential for deeper market penetration and better performance as India has historically had relatively low penetration rates for insurance.

According to a report by Moody’s, in the fiscal year ended March 31, 2017, the Indian combined insurance industry’s total gross premiums grew by 17%, bringing the five-year CAGR to10% for the sector. Non-life premiums grew 32% in FY17 versus 13% for life insurance. India’s economic progress, too, is a driver of insurance demand and innovation. A burgeoning middle class is seeking to better manage risk and maximise investment returns as India’s economy makes strong strides. A thriving insurance sector benefits from and contributes to overall economic development. As India’s insurers get exposed to greater public scrutiny, the rigours of analyst assessment, and diligence and transparency required of public companies in reporting and managing businesses, shareholders will want to see these companies adopting the right technology systems and operating models to drive capital growth and yields. To deliver on this expectation, listed insurers will need to apply even greater rigour in the identification and selection of their technology partners, ensuring that technology at once drives stronger capabilities and lower costs. Consolidation of vendors, systems and processes will be necessary to ensure insurance companies are doing more and better with less.

They must work to achieve better performance while ensuring minimal disruption to services and maximum cost efficiencies. This will require optimisation of the time and resources insurers deploy to make informed investment decisions that drive growth for shareholders and returns for clients. It needs adoption of technology that can speed data capture and analysis and ultimately digitalisation of systems, processes, services and client interface. Firms that capture these opportunities for growth and competitiveness will be the ones that create the best potential to thrive as they invest in robust, scalable technology systems that can support long-term business growth, reduce costs, centralise compliance and oversight, and bolster operational efficiency. Those which fail to harness technology as a strategic asset risk being leapfrogged by more agile and innovative competitors, a trend seen globally in the insurance sector where better ways of tailoring, delivering and managing products for clients’ needs are causing traditional players to innovate to ward off new and nimble, technology-based competitors in the sector.

Source: Financial Express

7 reasons to buy insurance online

April 05, 2018

The trend of buying insurance policies online is slowly and steadily growing in India. Gone are the days when you had to visit the insurer's office, or fix an appointment with an insurance agent or a broker to buy a policy.

Today, the entire spectrum of insurance products, be it health, motor, travel, or life, all available to you on the internet.

The Internet has made the life of a common man easy. Whether it is talking to our loved ones, shopping, booking movie or concert tickets, opening a bank account, or buying vegetables, every chore that once required us to step out of our house is now one click away and we have been using these services with ease.

Despite this, insurance is one such market that is still left untouched. With a lot of people trying to revolutionize this space, insurance companies are themselves allowing users to buy their policies online and also provide detailed information on coverage and relevant quotes. Also, the security in banking and finance sector is drastically changing, thus giving people a sense of security with their confidential data.

From easy access and no documentation to lesser premiums with higher sum insured, there are way too many benefits of buying an insurance online. Let’s have a look at a few of them.

You are the decision-maker

The digital world is full of information and this allows you more flexibility and options in choosing your required plan. However, you need to conduct research on your own while buying a policy online. There is no advisory involved and you can reach through the clause and select a plan that suits you the best.


When you buy an insurance policy online, you save precious time that would have been otherwise wasted at every step of the manual process. Thanks to the internet, you can now browse, compare, apply, and pay anytime, from anywhere and have your policy in your mailbox within a few seconds.

Ease of comparison

Online aggregator companies help insurance buyers to compare plans from different companies. This way, you can make an informed decision and buy a plan that fulfills your requirements. Online comparisons include policy benefits, features, exclusions, inclusions, premium etc.

Zero paperwork

Most insurance company websites are easy to understand and engaging. Once you finalize a policy, you need to fill a detailed form, complete your KYC, answer some lifestyle-related questions, and pay to buy the policy. There is no need to create photocopies, seek certificates, or courier documents. It is a hassle-free, no-paperwork process.

24*7 customer support

Buying insurance online has become easier in the past few years as online teams now help you make the right choice. From suggesting suitable options to sending timely reminders for premium payments, there are various benefits of buying insurance on the internet. If you are confused about the plan that is best tailored for you, these online companies provide round-the-clock assistance with the help of live chats and video call options on their website.

In addition to this, the automated system also sends out reminders about renewal dates, thus making sure that the complete process is totally stress-free.

Moreover, customer support teams are responsible to make the claim settlement process smooth and fast.

Online reviews

Before you buy an insurance policy online, you can always read reviews, seek opinions, get suggestions, and consider various unbiased perspectives about the plan and the insurance company you are planning to buy from. You can also know their claim settlement record for your information.

Complete transparency

As each and everything about the product in question, from its features to the customer experience as well as the regulatory action that is applicable in case there is a problem at your end, is online, there is nothing that an insurer can keep from you anymore. Therefore, there is total transparency in the entire process.

The move to digital is unavoidable, and people are trying to revolutionize the insurance industry with the help of Artificial Intelligence (AI) and chatbots. Online insurance is one such boon which will make our life hassle-free. In the near future, insurance will be bought and not sold!


Are you buying a health insurance? Must check these 5 points

April 04, 2018

With increasing health costs, the most effective way to secure your and your family is to buy a personal health insurance policy. While most salaried individuals may have a group insurance cover, it is always advisable to buy a personal cover which can be renewed every year. Also, under Section 80D of Income Tax Act, 1961, a taxpayer gets deduction of up to Rs 25,000 for heath insurance of self, spouse and dependent children.

At present, all health insurance policies provide for entry age of up to 65 years and do not have any exit age once the proposal is accepted, provided the policy is continuously renewed without any breaks. A policy can be either individual or floater, and one can increase the sum insured at the time of renewal.

Moreover, at some point of time if a single health cover plan is not enough to deal with the needs of an entire family as many insurers put a cap on the sum insured, one should look at a top-up plan as it gives additional cover over and above the normal coverage, and is helpful if the normal cover is exhausted.

Buying a health cover can be tricky as there are multiple products in the market. Therefore, one must look at the product information on the company’s website, which will include a description of the product, clauses, exclusions, network hospitals and premiums. Here are five things that one should look at before buying a health insurance policy.

Pre-insurance health check-up

Insurance companies insist on a health check-up if the applicant is above 45 years of age, or if the sum insured is of higher amount. The tests are conducted in hospital empaneled with the insurer and as per the regulator’s rule, the insurer will bear at least half the cost of the medical check-up.

Treatment-wise limit for claim

One must look at the treatment-wise limit for amounts one can claim under a health insurance policy. If the claim amount exceeds the amount set by the insurer, one has to pay the balance despite having a higher overall sum insured. Many insurers provide daily cash benefit for each day of hospitalisation.

One must also note the terms and conditions of pre- and post-hospitalisation offerings, no-claim bonus and waiting period for specified ailments, which vary from company to company.

Cumulative bonus and premium

While buying a health insurance policy, one must ensure that the cumulative bonus is stated explicitly in the prospectus and even in the policy document. Also, look at the product information on the company’s website, which will include a description of the product, clauses and premium rates inclusive and exclusive of the service tax payable. If the policyholder has made a claim in the policy year, the insurer cannot load any charges on an individual insurance policy at the time of renewal.

Pre-existing diseases

At the time of signing the insurance proposal, one has to disclose any pre-existing ailments and based on that the insurer decides whether to provide you insurance and the premium for it. Never hide or provide incomplete information in this disclosure as it may result in rejection of claims later. Many insurance companies do not give a cover if an individual has or even in the past had a pre-existing illness with major consequences. If they still do, the insurer will load the premium to cover additional costs that may arise due to one’s existing medical condition.

Waiting period and exclusions

Every insurer will have a waiting period for pre-existing diseases, which ranges from two to four years. Check the waiting period before you sign on the dotted line because if you have a pre-existing medical condition you cannot depend on health insurance policy in case there is any medical emergency due to the existing illness. It is always better to buy a health insurance policy at a young age when the chances of falling ill and pre-existing ailments are minimal. In individual health policies you can port your policy from one insurer to other, along with your waiting period already covered.

Source: Financial Express

Health insurance for all can be a reality

Mar 26, 2018

In Budget 2018, the government had made a few announcements. (a) On a National Health Protection Scheme (NHPS) providing insurance cover of Rs5 lakh per family; (b) Having an initiative to establish new government medical colleges and hospitals, and upgrading existing district hospitals under the programme; and (c) Setting up of over 1,50,000 health and wellness centres throughout the country.

In March, the Cabinet cleared the Ayushman Bharat National Health Protection Mission, dubbed Modicare.

An integrated approach in implementation of all the three initiatives can steer the country towards having universal healthcare. The success of the flagship NHPS, aimed at making available secondary and tertiary care to the needy could largely depend upon how successfully the other two initiatives are implemented.

The two major concern areas identifiable in the existing government health insurance schemes are enrolment and abuse or overtreatment or unnecessary hospitalizations. We have situations of fictitious enrolments, unnecessary hospitalizations or unnecessary hysterectomies, and other such instances.

Steps to implementation

Studies indicate that 65% of the healthcare expenditure in the country is for outpatient care, which are primarily out of pocket expenses. If comprehensive healthcare is the goal, effective financing and delivery of primary healthcare is vital. Setting up of 1,50,000 health and wellness centres is a big initiative and it has to be primarily implemented effectively. There is a strong case for public private partnership in establishing and running these health centres with specific measurable goals. Private participation could be further encouraged by means of tax benefits or subsidies.

Every NHPS beneficiary should mandatorily register with one of the wellness and health centres, which can function on capitation basis. To avoid unnecessary usage, a nominal co-payment can be collected from beneficiaries when such facilities are used. Medicines and diagnostics can be provided at subsidized prices or free to those who cannot afford it. These centres—manned by Primary Care Physicians (PCPs)—will provide outpatient care, including diagnostic facilities and medicines, and also act as gatekeepers for NHPS. Polyclinics with specialists and higher level of diagnostic facilities should also be established for referrals from the primary centres.

Every beneficiary of NHPS should consult a PCP in the health and wellness centre, and treatment in polyclinic by a specialist would be only on referral from the primary centre.

Existing as well as the new district hospitals should be equipped to be on par with corporate tertiary care hospitals. Existing as well as new medical college hospitals should be equipped to be on par with corporate super specialty hospitals.

Admissions of any NHPS member to a hospital should be only on referral from the PCP or the specialist, except in emergencies such as accidents. The PCPs and the specialists will act as gatekeepers for hospitalizations and would be responsible for preventing unnecessary hospitalizations and surgeries. Suitable mechanisms have to be built to prevent collusion of PCPs and specialists with hospitals.

Hospitals that are empaneled under the health protection scheme should be graded according to their infrastructure available and quality of care provided, and then continuously monitored also. The government must set up a National Health Regulatory Authority and insist on all state governments to set up similar authorities. All the heads of such regulatory authorities should become members of the National Health Regulatory Authority. This would bring in uniformity in the healthcare sector in the country.

An integrated approach to implementing all the three initiatives would have far-reaching effects on the country’s healthcare scenario, and we could see a healthier India. Rationalizing treatment or surgical procedures, and use of medicines and diagnostics will bring in reduction in healthcare costs. This would also lead to stabilizing the premiums of NHPS and ensuring continuous improvements in terms of coverage.

India has the problem of big numbers. Just launching NHPS without integrating the wellness centres as well as the government infrastructure may not yield the desired result in the long run. We must realize that implementation of such schemes requires strong planning, strong regulations, simple and efficient processes, and continuous monitoring through the use of advanced technological platforms. Implementation failures can not only result in an exponential rise in costs of such schemes, but also put a strain on future allocations as well towards the healthcare sector.


Insurance plan: How to know which type of scheme will suit you the best

Mar 26, 2018

For all its wonderful moments, life can be uncertain too. We all take preemptive measures to deal with any kind of uncertainties. Insurance is one such offering that provides a great financial cushion to safeguard oneself or dependent family members during tough times. The insurance market, currently, offers a wide variety to choose from. Life, Health, Travel, Automobile and Home Insurance being the notable ones. However, choosing the right insurance plan as per your needs also gets tougher with the multiplicity of choices. In this article, you will find an insight into the types of insurance you need.


Pay early, pay less should be your motto in your 20s. The sooner you buy Term Insurance in your career, the cheaper premium is. Term Insurance, which is cheaper than other life insurance products, provides an assured amount to the nominee if the insured person dies during the policy period. As most term insurance plans expire once the policyholder attains 60 years of age, opting early will ensure insurance cover for a longer duration at affordable premium rates.


Irrespective of what your age or financial earning is, a Health Insurance cover must be a part of your insurance portfolio. The rising healthcare and medical costs along with increased risk vulnerability owing to modern day lifestyle and stress mean that a health concern can deplete all your financial earnings in one go. Buying a Health Insurance plan early gives you ample time to stay financially protected from any pre-existing diseases after playing out the waiting period. A Health Insurance also offers tax benefits which can ensure optimum savings.


While Life and Health Insurance plans should be taken as early as possible for financial security, the type of insurance and cover should depend on your earnings, age, long-term financial goals and the number of dependants. Insurance premiums are cheaper at an early age than at a later age in life as the chances of age-related health issues are less. Prioritize essential insurance plans like Term Insurance and Health Insurance over an automobile insurance or a travel insurance plan, but do consider the latter if there is a need. Do not discount the riders of Life Insurance as an additional burden as they may offer enormous benefits. With an accidental death benefit rider, beneficiaries can get up to a maximum of twice the basic sum assured all for a nominal cost of the rider in the insurance plan.


When it comes to insurance life, health, travel and automobile insurance covers take centre stage, but there are various other insurance covers that can be equally effective for your needs. From insurance cover for misplaced keys for home or automobiles to cover for amateur sportsmen or even a second medical opinion, there are ample insurance plans that can be customized for your needs. It is best to do a little research about these general insurance plans before grabbing the best deal as per your risk and needs. For example, if you are an animal lover, you can opt for a pet insurance along with your Life Insurance plan.


When it comes to choosing insurance type, prioritise protection over the investment, returns or tax savings component. Term Insurance plans, for example, are not only more budget-friendly but also offer optimum protection compared to endowment cum investment plans. Opt for insurance as an investment only as an add-on once you have ample coverage and a protection plan in place as per your financial needs, your dependants and their future financial goals.

With so many insurance plans available, picking up the right plan can be a tough task. However, you should assess your needs, financial goals and protection requirement before opting for an insurance plan.


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