Your money: How to analyse the information provided by insurance cos
For those looking to buy an insurance policy-life or non-life, there is no dearth of information today. Insurance companies offer a lot of information on their websites. There are web aggregators and insurance brokers who also offer information on their websites. What is the exact data that you should be looking at while choosing a policy?
According to Sanjay Kedia, Country Head and CEO, Marsh India Insurance Brokers, a policy holder needs to look at insurer in terms of ability and willingness with regard to claims. The solvency of an insurer indicates the ability to pay claims and past claims settlement track record shows the willingness to pay claims.
“When the Indian market moves to calculating Risk-based Solvency calculation then it would be a much better reflection of the claims paying ability, but present calculation methodology can be used for the time being,’’ he says.
Older companies tend to have a higher claim settlement ratio because they have sold more number of policies and hence even if they reject a large number of policies, in comparison it looks smaller. So, along with claims ratio one must also check how long the company takes to settle the claim. If a company approves more number of policies, but takes a long time to settle the claim, it may not be beneficial to policyholders.
The time taken could vary depending on the kind of product. For instance, a motor claim could take longer to settle than a health insurance claim because the company may need to inspect the vehicle before paying the claim.
“Customers must look at the industry benchmark to compare these metrics. This will give a better picture," says Sanjay Datta, Chief Underwriting and Claims, ICICI Lombard General Insurance.
While there is no comparative website, you can get the data from websites of Insurance Regulatory and Development Authority of India (Irdai) or the General Insurance Council, he adds.
“Irdai now asks every insurer to disclose number of claims outstanding for each segment of business like fire, engineering, health, etc on their websites. This is useful information. However, there is no public information available for each insurer on the total amount of claims outstanding per segment. Also, ideally there should be the availability of information on the different value size bands per segment on the total amount of claims outstanding etc. This detailed information also when provided by each insurer in a common format prescribed by the regulator would allow analysis of one insurer over the other,’’ says Kedia.
Customers must also look for information about where they can lodge complaints. This will be useful if you want to lodge a complaint against the distributor or if you want a query resolved.
Whether you buy the insurance through an agent, broker or online, it is important to read the complete product brochures available on the company website. This will not only help in understanding the product features and clarifying doubts, but also help in validating the statements about the product features made by the agent or the broker, says C L Baradhwaj, chief compliance officer and chief risk officer, Bharti AXA Life Insurance.
In case of life insurance Unit Linked Insurance Products, it is important to track the growth in Net Asset Values (NAVs). Information about the NAVs of various funds of life insurance companies are also published on a daily basis. It is important to track the NAV movement before choosing the policy.
Most insurance companies allow you to register claims online. However, submission of hard copies of documents is necessary. But once the claim is registered, you can track the claims through the website, says Baradhwaj.