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36 th Annual Conference of African Insurance Organisation (AIO) Tanzania General Insurance Corporation of India Access to Insurance Services The Role of.

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Presentation on theme: "36 th Annual Conference of African Insurance Organisation (AIO) Tanzania General Insurance Corporation of India Access to Insurance Services The Role of."— Presentation transcript:

1 36 th Annual Conference of African Insurance Organisation (AIO) Tanzania General Insurance Corporation of India Access to Insurance Services The Role of Customers

2 Insurance Landscape in India India: a vast & virgin market for insuranceIndia: a vast & virgin market for insurance Economic Growth has provided the impetusEconomic Growth has provided the impetus Freedom to paint the canvas in any wayFreedom to paint the canvas in any way High growth in automobile & Health care sectorHigh growth in automobile & Health care sector Burgeoning middle class with better life-styleBurgeoning middle class with better life-style Till recently tariff- based with low claimsTill recently tariff- based with low claims A long history with solid foundationA long history with solid foundation 2

3 Pre Liberalisation Scene Status of Customers’-pre liberalisationStatus of Customers’-pre liberalisation –A case of ‘One Shoe Fits All’. –Traditional & Uniform Policies by LIC & 4 PSUs. –Virtually no choice for the Customers –Low insurance awareness led to customers not being aware of their insurance needs –‘Take it or leave it’ attitude of the Insurers –Insurance was sold; never bought 3

4 Post-Liberalisation Scene Current Scene & Role of CustomersCurrent Scene & Role of Customers –New players on the scene –Customers are better informed & sensitive –Demand for new, better & variety of products –More players, more competition, customers benefit –Changes in economy & social milieu also promote transformation and growth –Detariffication reflects growing demands of Indian consumers. 4

5 Educating the Customer The RegulatorThe Regulator InsurersInsurers IntermediariesIntermediaries –Educating the customers to make them more informed –Benefits of taking adequate & appropriate risk covers –Non-dependence on the ‘Chance Factor’ –Not only pure products but also pension, health-care & investment-based 5

6 Consumer Activism Prominent in Health Insurance, catalysed by:Prominent in Health Insurance, (one of the fastest growing segments) catalysed by: –Rising Cost of Medical Treatment –Life Style Diseases –Health Consciousness Customers demand for better & simple products & better servicesCustomers demand for better & simple products & better services 6

7 Consumer Fora & NGOs helped in bringing about changes in the Health Insurance.Consumer Fora & NGOs helped in bringing about changes in the Health Insurance. –Simple one-page policy –Scope of ‘Senior Citizens’ expanded –Renewal of Policies can’t be rejected –Critical Illnesses are covered –Coverage of pre-existing diseases made possible –Portability of Health Insurance Policies 7 Health Insurance -Consumer Activism

8 Government-Industry Efforts National Health Insurance ProgrammeNational Health Insurance Programme –For less then $ 1 per annum policy holders entitled to $ 600 of medical care at most public/ private hospitals. –Launched by Federal Government in collaboration with Public & Pvt. Insurance Companies. –Extended to sections other than BPL 8

9 Why Redressal? –Liberalised Insurance Sector yet to Mature –Transitory & Consolidation Phase –Low Consumer Awareness –Poor Insurance Penetration –Proactive Consumerism in Insurance Missing –Need for Disciplined & Co-ordinated Functioning Insurance Regulatory & Development Authority (IRDA) set up –To ensure a healthy & systematic growth of the sector and ensure that customers get a fair deal 9

10 10 Consumer Protection Mechanism Federal Government RTI Act 2005 Judicial Courts Consumer Protection Act 1986 National Commission State Commission District Forum Directorate of Public Grievances IRDA Insurer Ombudsman

11 11 IRDA: the Regulator Enactment of IRDA Act, 1999 & Constitution of IRDA - An Autonomous body to Regulate & Develop Insurance Business Regulate & Develop Insurance Business Promote Market Efficiency – Protect interests of Promote Market Efficiency – Protect interests ofPolicyholders Promotion and Regulation of Professional Promotion and Regulation of Professional Organisations of Insurance Regulating Maintenance of Margin of Solvency Regulating Maintenance of Margin of Solvency

12 12 Grievance Redressal Mechanism Insurer  IRDA (Protection of Policy holders’ Interests ) Regulations, 2002 All communications from policy-holders responded to in 10 days. All communications from policy-holders responded to in 10 days. Guidance on how to lodge a claim. Guidance on how to lodge a claim. Settlement of claim with in 7 days of acceptance of offer of settlement. Settlement of claim with in 7 days of acceptance of offer of settlement. Proper procedures & effective mechanism to address grievances efficiently. Proper procedures & effective mechanism to address grievances efficiently. Information about Insurance Ombudsman communicated with the policy document. Information about Insurance Ombudsman communicated with the policy document.

13 13 IRDA: Regulatory Role- Consumer Protection  Insurance Advertisement & Disclosures Regulations, 2000  Protection of Policy holders’ Interests Regulations, 2002  Maintenance of Minimum Solvency Margin  Regulatory Norms for Intermediaries  Licensing of Insurance (Individual) Agents  Licensing of Corporate Agents  Insurance Brokers- 2002

14 14 Federal Grievance Redressal Mechanism Directorate of Public Grievances Directorate of Public Grievances Looks into public grievances with government departments Looks into public grievances with government departments Headed by a Senior Federal functionary Headed by a Senior Federal functionary Public Sector Insurance Companies (Life & Non-life) are part of government Public Sector Insurance Companies (Life & Non-life) are part of government Right to Information Act 2005 Right to Information Act 2005 Redressal mechanism for information from Government & Government owned or aided organisations Redressal mechanism for information from Government & Government owned or aided organisations Consumer Protection Act, 1986 Consumer Protection Act, 1986 District Forums District Forums State Consumer Disputes Redressal Commission State Consumer Disputes Redressal Commission National Consumer Disputes Redressal Commission National Consumer Disputes Redressal Commission

15 15 Indian Insurance Industry Grievance Redressal Mechanism  Indian Insurance Industry has  3-tier grievance redressal mechanism  Insurers  Ombudsman  Consumer Forums & Regular Civil Courts

16 16 Grievance Redressal Mechanism Ombudsman Introduction of Insurance Ombudsman-1998 Introduction of Insurance Ombudsman-1998 Quasi judicial mechanism-empowering adjudication of disputes Quasi judicial mechanism-empowering adjudication of disputes Adjudication limited to personal lines of business- insurance contracts of value not exceeding US $ 40,000 Adjudication limited to personal lines of business- insurance contracts of value not exceeding US $ 40,000 Award binding on Insurer but not on the insured. Award to be honoured in three months. Award binding on Insurer but not on the insured. Award to be honoured in three months. Currently 12 Ombudsman across the country Currently 12 Ombudsman across the country Applicable on both, Public & Private. Applicable on both, Public & Private. Simple filing procedure & no legal attorney required Simple filing procedure & no legal attorney required

17 17 Grievance Redressal Mechanism IRDA  Grievance redressal mechanism  Assesses the quality of service provided by the insurers  Identifies grievance prone areas that require Regulator’s intervention  Provides online registration/redressal of consumers’ grievances  Scope for Arbitration and Conciliation options

18 18 Insurance Awareness, Reach & Education Media Campaigns Standardisation of Policy documents and other literature Updated Web-portals: Online Premium Calculator, Rates & Conditions & Payments 24-hour toll free call numbers Implementation of ‘state-of-the-art’ technology Representation of Policy Holders/ Consumer Activists on Board Regulator & Insurers

19 GIC Re: A Profile Reinsurance support on facultative & treaty basis for risks in India & abroad Manages Pools- Terrorism Insurance Pool, Indian Motor Third Party Insurance Pool & Marine Hull Pool Diversification in areas of Life, Takaful Re, Liability & Oil & Energy Enhanced Risk Management Capabilities Value Added Services to Customers Technical Underwriting aided by IT Tools

20 20 Standard & Poor’s, A M Best & CARE  Standard & Poor’s ranking (latest 2007) of top Reinsurers: GIC Re moves to 16th position from 22nd  Rated “A-” (Excellent) by A. M. Best for Financial Strength  Rated AAA (in) for its Claims Paying Ability by CARE (Credit Analysis and Research Limited)  GIC Re is the 5 th Largest Aviation Reinsurer GIC Re: Ranking & Rating

21 21 International Business Capacity TypeCapacity (PML)Capacity (SI) Facultative BusinessUS$ 20 MlnUS$ 50 Mln Treaty BusinessUS$ 4 MlnUS$ 10 Mln Foreign Inward Business (Other than Aviation) TypeAny One HullLiability (AOO) Facultative (International) AirlinesUS$ 10 MlnUS$ 100 Mln General AviationUS$ 5 MlnUS$ 30 Mln TreatyUS$ 500,000 Any One Acceptance Aviation Business

22 22 GIC Re’s Overseas Operations  GIC Re sources its business globally  Branch offices in London and Dubai & Representative office in Moscow  Eventual Reinsurer Status in Brazilian market  Foreign Operations contributed approx. 27% of total business in

23  Thrust areas: Far East Asia, Africa, Middle East & G8  GIC Re also holds significant interests in –  Kenindia & East Africa Re in Kenya  Asian Re, Thailand  India International Insurance, Singapore  LIC (Mauritius) Offshore Limited, Mauritius GIC Re’s Overseas Operations

24 24 Business Performance – US $ Mln Gross Premium2,337 Net Premium2,085 Profit before Tax268 Assets9034 Investments7,324 Solvency Ratio3.36

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