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Insurance companies must focus on innovative, simple & transparent products: IRDAI Chairman

Aug 27, 2020

  • Need for a robust risk management system for companies rather than firefighting: LIC Chairman

NEW DELHI, 27 August 2020: Dr Subhash C Khuntia, Chairman, IRDAI today underlined the need for insurance companies to focus on more simple products that are both innovative and transparent in nature. He also urged the companies to focus on long-term measures post COVID to increase customer base.

 

Addressing FICCI's 21st Annual Insurance Conference 'FINCON 2020', Dr Khuntia said, "We now need to focus on converting adversities into long term results to transform the industry and get sustained value in the future."

 

He also urged the companies to come out with innovative processes and increase the use of digital platforms to engage with customers. "Connectedness with the customers is very important as it helps in building trust," he added.

 

Emphasizing on the use of innovation and technology, Dr Khuntia said IRDAI had introduced the Regulatory Sandbox and the first phase received good response. "The second window is opening from 15th September and I invite Fintech companies, along with insurance companies to participate for innovative products and processes. We will be happy if more emphasis is given on dealing with the current and post pandemic solutions," he said.

 

In order to build trust among the customers, Dr Khuntia said that insurance companies should focus on faster claim settlements, streamlining of grievance redressal mechanism. "Communicating frequently with the public also will help in building a better rapport with the customers. In difficult times, insurance companies have to come to the rescue of the policy holders. Our operations are anti-cyclical in nature," he noted.

 

He further expressed hope that the Indian insurance industry has the resilience to fight the pandemic. "We will come out with a positive growth very soon. Till up to July, only life insurance has remained negative but general insurance and health insurance have recorded better growth," he added.

 

Dr Khuntia said that there is a need for insurance companies to include standard products into their product list to enhance the insurance penetration in the country. He added that IRDAI introduced two standard products Corona Kawach and Corona Rakshakduring the pandemic. "These standard products are designed after consultation with each stakeholder. I urge the industry to cooperate. The advantages include easier customer choice, less dispute at settlement time that will benefit the companies too," he said.

 

Mr M R Kumar, Chairman, LIC said, "We as an industry learnt deeper lessons and came up with long term strategy and solutions. The focus should not be on firefighting but creating a robust risk management structure." He added that we need to unlearn and look at the future in a more creative manner. There is a need to review the efficacy of the current processes and their re-engineering as per the evolving demands.

 

He further emphasized to focus on IDEAS- Investment opportunity, Distribution of insurance products, Economics and efficiencies, Administration of business & focus on technology and Solvency and soundness of the industry.

 

Mr Rashesh Shah, Past President, FICCI and Chairman & CEO, Edelweiss Group said that three key factors that will drive the way forward include investing in digital tools & advance analytics; need for new products, services and the way to cater the demand, and accelerate the cost optimization.

 

Mr Bhargav Dasgupta, Chairman, FICCI Committee on Insurance and MD & CEO, ICICI Lombard General Insurance Company said that there will be a lot of behavioural changes amongst the consumers with increase in contactless and digital services. He said that more hybrid distribution models using human and technology will work in the future.

 

Mr G Murlidhar, Co-Chairman, FICCI Committee on Insurance and MD & CEO, Kotak Mahindra Life Insurance Company said that the life insurance industry plays an important role in the economy. The industry must focus on adopting newer technologies to increase market access.

 

Mr Alpesh Shah, MD & Senior Partner, Boston Consulting Group shared his perspective on the Indian insurance market and future potential post COVID.

 

Mr Dilip Chenoy, Secretary General, FICCI delivered the vote of thanks.