StudyandDataCompilationbyArthashayTrainingandConsultancy,Puneon

ChangingcustomerexpectationspostliberalisationofinsuranceSector
A.Lliberalisationofinsurancewasexpectedtobring
Bettercoverageandpenetration
Toaugmentflowoflongtermfinancialresourcestosupportthegrowthofinfrastructure
Betterservices
Efficientclaimsettlement
Improvingcustomerknowledgeandawareness
Someoftheamendmentsaddedwere
Prioritytohealthsector
Policyholdersfundstobedeployedinsocialsectorandinfrastructure
Compulsoryruralbusinesscoverforunorganized,informalandeconomicallybackwardclass
FineofRs.25Luptosuspensionoflicense,incaseoffailuretofulfillsocialobligations

B.CustomerexpectationsfromAgent/FC/Advisor
Transparentinformationonproduct,commission,benefitsandconstraints(limitations).
Knowledgeandskillstoprovidecustomisedsolution
Regularbriefs(visits),underwritingguidance,fundswitchingguidance,knowledgesharingand
macropictureofgeneralinvestmentoptions
RenewalPremiumintimationandcollection
Facilitationduringclaimsettlement

C.CustomerexpectationsfromInsurancecompanies
Complianceandprocesscheckonagents
Transparentandtrustworthytransactions
Considerateredressalandcommitmenttopromises,particularlyverbal.Nottoraiselegal(proof
seeking)andterms&conditionsshieldatthetimeofkeepingthepromises.
Ensuringdeliveryofrenewalnotices
Maximumpossiblemodesforpaymentofpremium
Servicechargeissuetoberesolved(whobearthecost)
Moredistributionarmsandcustomerfriendlyproducts
Focusonconsumereducationandknowledge
Correctinsurancedisclosures,lessoffineprintspeciallydevilpoints(likehiddencosts,
punishingconditionsetc.)
Tollfreehelplinecapabletohandleandresolvecustomerqueriesandissues
Privilegetochangeagentincaseofcompellingreasons
CustomerexpectationsfromInsurancecompanies
D.CustomerexpectationsfromInsuranceRegulatory&DevelopmentAuthority(IRDA)
Needtoplayactiveroleasaregulatorforbenefitofallthestakeholders
Needtobetough,knowledgeable(Indiaspecificaswellasglobal),customersensitiveand
impartial
Needtoimprovesectorsimageamongstcustomersaswellaspeerinstitutions(SEBI,IT,PFRDA
etc)
Insuranceawarenessandknowledgespreadshouldbethehighestpriorities.Directexposureto
customersshouldincreasesubstantially.
SeriousrelookatAgentscurriculum(prelicensing)andtrainingprograms.Agentproductivity
andcustomersatisfactionindexareatseriouslylowlevels.
Drivesocialandruralobligationsevenmorerigorouslyinletterandspirit
Needtohave(andexhibit)bettercontroloveroperations,customerredressal,productsand
compliance(bothinternalaswellasexternal)ofitsmembers
Musthavepolicytowardsorphanedagents(FCs/Advisors)andorphanedcustomers.This
needstobedealtwithutmosturgency.
Tackleissueslikepoorpersistency,highattrition,missellingcomplaints,lackoftransparency,
decliningconsumertrustetc.
Beproactiveandvisionaryratherthanbeingkneejerkreactive,opportunisticandshortsighted
Needtosetupsystemofindependentchecksandbalances,insteadofsolelydependingonthe
datasuppliedbyinsuranceproviders.
Needtoreworkpositionsonkeymaninsurance,employeremployee,partialassignmentof
policy,insuranceascollateralasset;channelspecificproductdifferentiationespeciallyinthe
contextofIndianmarketandinvestmentculture.Thegenericapproachcanbemoldedabitto
accommodatesomeofthecustomerexpectationstowardsinsuranceasasset,without
damagingthecorespiritofinsurance.Onthecontrary,thismighthelpinsurancegelbetterwith
otherfinancialproductsandservices.Theissuesrelatedtopaidupvalues,surrendervalues,lock
inperiodsarereasonablyaddressed,already.
Maybeitisimportanttostatethatobsoleteandrigidactuarialpracticesalongwithinefficient
operationsaredrivingpremiumhighandthetrendislikelytocontinue.Thisisexactlyopposite
totheexpectationsfromliberalisationofsector.IRDAneedtoaddressthis.
Alterationofpremium,term,ridersandsumassuredmaybeconsideredinthepolicy.
Willfulrepresentationofwrongpremiumpaymenttermsbytheinsurancecompaniesshouldbe
severelydealtwithasthisisoneoftheprimereasonsforlackofvaluationsonthebasisof
embeddedvalue.Thelongtermramificationsofmisrepresenteddatabythecompanieswould
besevere.
Companysbalancesheetsshouldincludetheknownriskfactors,whichinfluenceparameters
likeValueInForce(VIF),EmbeddedValue(EV),profitabilityetc.IRDAmusthavesome
mechanismtoverifythedatasubmittedbythemembers.
IRDAshouldhavetheentiredatabaseandanalysis,accessibletoeverybody.Currentlythedata
availableisnotcomprehensiveenoughandverydifficulttoworkuponforresearchand
consultancypurposes.

ThiscompilationwasdoneduringtheperiodofJanuarytoApril2010.Theconsultationswereheld
acrossthemetro,urban,semiurbanaswellasruralareas.Weinteractedwithcustomerswhowere
ragingfromexpertstonovicesinthefieldofinsurance.Thiscompilationwassolelydoneforinternal
purposesonly.Thoughsomeoftheobservationsarequiteharshandsomeexpectationsmaybeabit
impracticaltoimplement,itisworthknowingexactlywhatthecustomerswereexpecting.
Iamsharingthispurelyfortheunderstandinganditisnotintendedtohurtanyoneoranyorganisation.
Thisreportisnotajudgmentalcallonoperationsofanyentitybutrepresentthederivedinferences
fromtheavailabledataandinformation.
Hopethisisofsomeusetoyou.

WarmRegards,
GirishTiwaskar
ArthashayTrainingandConsultancyServices
M.9890979711