The two metrics that should inspire trust in a policyholder is the death claims settlement rate and persistency of life insurance policies. Life insurance is a long-term contract and both the policyholders and life insurance companies stand to benefit if policies sold are persistent, i.e., policies are renewed every year, and that’s something most insurers are struggling with. Future Generali India Life Insurance Co. Ltd has struggled on both fronts. Munish Sharda, managing director and chief executive officer, Future Generali India Life, talks of how he is scripting a turnaround for the company. Edited excerpts:
As per the annual report of FY17, Future Generali settled 89.53% of the retail death claims. This puts you in the bottom five companies, as most other insurers have a settlement rate above 90%. Why is that?
The problem of claims rejection primarily takes place in early claims, so as the years go by and the existing book keeps becoming bigger, the proportion of early claims falls. There is hardly any rejection in non-early claims that come after about 2 years from buying the policy. In fact, in this portfolio, the settlement is more than 99%, so the problem of rejection happens in early claims because this is where you see fraud happening. But we are improving; this financial year (FY18), we have settled 95.5% of the decisioned claims. In FY15, our rejection was 14%—among the worst in the industry. We have come a long way.
