The new IRDAI Chairman, Dr. Subhash C Khuntia has urged insurance companies to come out with simple products with pre-defined features that people can understand easily. He was speaking at the 20th CII Insurance and Pensions Summit held today in Mumbai.
Dr. Khuntia said that these standardized products should have predefined features like bank FDs. Insurers can introduce advanced features through add-ons later. He said, “Sell products that are standardized in design so that people are not misled. There are lot of complaints about insurance products being misleading. When you open a bank fixed deposit account, you have no problem in understandibg the terms and conditions because all banks have similar terms and conditions. Similarly, can we come out with simple insurance products like third party insurance so every one knows what it involves.”
Highlighting the need to expedite claim settlement process and grievance redressal mechanism in the insurance industry, Dr. Khuntia said that the insurance companies should review if their policyholders are satisfied with their services. He further said that it is the responsibly of insurers to ensure that their distributors sell products which would benefit policyholders. There are lots of complains about mis-selling and repudiation of genuine claims. The industry need to build trust among customers, he added.
He said, “In my view, claim settlement process should be quick and painless. Insurance companies should avoid repudiating claims by carefully underwriting risks. In addition, insurance companies should encourage policyholders to reduce risk. For example, some health insurance are giving discount on renewal premium if a policyholder is walking 10,000 steps a day. Such initiatives are win-win for all.”
He further suggested that IRDAI would make a framework for regulatory sandbox in Indian market conditions to facilitate adoption of fintech and promote financial innovations in the insurance industry.
Talking about the industry growth, he said that he expects industry to grow at a CAGR of 20% over the next five years.