Insurance

Question 1

In which segments is IRDAI asking insurers to offer long term insurance?

Answer 1

In the 3 major segments - 1) Motor 2) Health and 3) Property.
10 year policies are being considered. It will help insurance companies retain customers for a long time.

Question 2

What is one of the first trade credit insurance deal in India?

Answer 2

HDFC ERGO insured DBS bank who offered Tata Metaliks financing on their accounts receivables. Atradius acted as the re-insurer for HDFC ERGO.

So this allows a company (in this case Tata Metaliks) to discount its receivables to a bank (in this case DBS) and get cash for it quickly, instead of waiting for receivables collections. DBS gets this transaction insured with HDFC ERGO. So if there is a default on the receivable, HDFC ERGO will cover. HDFC ERGO gets re-insurance from Atradius.

Question 3

What is critical illness insurance?

Answer 3

Critical illness insurance is a type of health insurance policy that provides coverage if you are diagnosed with a critical illness such as cancer, heart disease, stroke, and kidney failure. This type of policy can help to cover the cost of treatment and recovery, as well as lost income if you are unable to work.

Question 4

What are some of the things to keep in mind before buying a critical illness Policy?

Answer 4

1) types and number of diseases covered - Be sure to find a policy that covers the types of illnesses that you are most concerned about. For example, if you have a family history of cancer, you may want to find a policy that offers coverage for this disease.
2) coverage amount - considering the cost of treatment and lost income in case unable to work due to illness.
3) exclusions and limitations
4) deductibles and co-payments
5) premiums
6) benefit vs indemnity

Question 5

What is the level of insurance penetration in India?

Answer 5

Insurance penetration in India experienced an increase in momentum in recent years moving to 4.2% in 2021 from 3.76% in FY20.

Question 6

What is the reason for increase in penetration of insurance in India?

Answer 6

Multiple reasons are cited for this development, specifically,
1) ease of doing business,
2) deployment of digital solutions by insurers,
3) change in the attitude of consumers and their realization of financial security,
4) evolution of products, including new regulatory framework regarding product approval and distribution by IRDAI

Question 7

What is bancassurance?

Answer 7

Bancassurance means selling insurance product through banks. Banks and insurance company come up in a partnership wherein the bank sells the tied insurance company’s insurance products to its clients.

Question 8

What are the benefits of bancassurance?

Answer 8

Bancassurance arrangement benefits both the firms. On the one hand, the bank earns fee amount (non interest income) from the insurance company apart from the interest income whereas on the other hand, the insurance firm increases its market reach and customers. The bank acts as an intermediary, helping insurance firm reach its target customer in order to increase its market share.

Question 9

As of Sept 2022 what innovative motor products has ICICI Lombard launched?

Answer 9

1) Pay-as-you-use and Pay-how you-use motor plans - customer will only pay to the extent they use their vehicle, and premium will change according to the drivers driving behavior. These will use telematics to analyze extent and manner in which the vehicle is used.
2) Motor floater product - It will enable those individuals owning multiple vehicles to ensure their vehicles, including cars and two-wheelers, all under one policy with a single renewal date and a comprehensive cover.

Question 10

how is AI used in indian insurace industry

Answer 10

Based on the article, here’s how the insurance industry in India is using AI:

1. Claims Processing: AI is being used to process insurance claims more efficiently. For instance, Cholamandalam MS General Insurance Company Ltd uses AI in its motor claims servicing, with 94% of motor claims settled through an AI application.
2. Fraud Detection: AI tools are being utilized for detecting fraudulent claims. These tools can analyze patterns and anomalies in the data to identify potential fraud.
3. Facial Recognition: Companies like Aegon Life are testing facial recognition technology to validate customer information. This technology can identify gender, age, and general well-being, helping in the verification process.
4. Predictive Analytics: Shriram Life Insurance Company (SLIC) uses AI to analyze historical claim data, identifying patterns to effectively manage claims. With AI-based predictive models, they can anticipate claim trends and provide proactive service to policyholders and nominees.
5. Automation and Digitization: Star Health and Allied Insurance Company Limited uses AI/Machine Learning (ML) based tools for auto adjudication of claims, which has significantly improved turnaround time. 65% of cashless claims evaluation are processed using an automation engine.