‘Policyholders want support of their agents/intermediaries during claim process’

Despite IRDAI’s consistent efforts to increase awareness of insurance and its benefits, India has one of the highest health protection gaps in the world with nearly 30% Indians having no health insurance. 

Exploring the reasons for this underappreciation of insurance by public and their pain points, CAMSRep has published a report that points the gaps between the policyholder and insurer. Here are the key issues highlighted by the report:

• Generic communication & insurance products: According to the report, policyholders expect insurers to offer customized plans based on their age, health and lifestyle choices. Communication with a lot of insurance jargon leads to poor knowledge of the product, its add-ons and benefits by the policyholder.

Insurers, on the other hand, aim to share information across all platforms and feel frustrated when customers ignore various aspects of their policies. While additional paperwork to buy add-ons also leads to hesitation among the policyholders, insurers try to get attention of the policyholders to coverage details to ensure maximum benefit. This leads to policyholders having too much expectations and inadequate benefit realization. 

• Differing perception of intermediaries: A key issue highlighted by the report is how policyholders and insurers perceive intermediaries. Policyholders find the intermediaries unavailable during the claims process and feel that lack of transparency from intermediaries causes communication gap in understanding procedures, costs or timeline involved in the claims process. 

On the other end, insurers look to train more intermediaries to reduce dependence on non-insurance third-party entities. They also blame hospital policies not aligned with insurers which leads to dependence on agents to handle the process. This leads to mis-selling or purchase of unwanted products, misinterpretation of policy benefits, higher chances of claim rejections, erosion of trust in the insurer and negative impact on brand loyalty.

• Complicated processes: A lot of people find the process of buying insurance complex and overwhelming. They find the process for claim submission and making changes to the policy documents complicated. As a result, they include of the agent in form-filling which leads to errors in form-filling and rejection of claims for minor reasons. Policyholders also feel that insurers do not provide adequate information on their claim settlement process.

Insurers believe that customers don’t actively seek out information on the product or processes and rely heavily on agents to check crucial information on forms. This leads to a confusing claim submission process and increased workload for insurers. 

• Lack of empathy and difficult claim settlement: The report states that there is a belief among policyholders that the benefit realization process is in favor of the insurer. They also find insurers lacking in empathy while policyholders are hospitalized or during a loss leading to stress for the policyholders. 

Insurers attribute this perceived lack of empathy to lack of knowledge among policyholders about the process and documentation. While the insurers agree that insurance is a technical product, they also believe that the rules are fair and equitable. They also feel that the policyholders need to be more involved from the time of purchase and verify the list of blacklisted hospitals before admission to avoid issues in the claims process. 

In conclusion, the report has made a call to action to the insurance industry to collaborate to make the delivery of insurance value standardized. It also asks the insurers to redesign their products and services according to the needs of the policyholders and to keep their ears to the ground to understand the evolving needs of policyholders and their reality. 

The report also gives the insurers measures to make this possible. 

• Bring transparency and nuance to insurance value: Insurers should try to make the policyholders see their policy as a collection of personalized benefits and demarcate between what they need, what they have and what they don’t have. 

• Making insurance value accessible: Insurers should enable proactive processes that make customers ready to make claims and place the onus on preparation on the customers. This can replace the bureaucratic processes that puts protocols which are far from customer reality. 

• Making insurance benefits real: Insurers should look to empathize and include the benefit realization in the customer’s life journey. It is essential for insurers to remember that the true value of insurance is in time of need rather than a way to recover losses after a tragedy.