Professional Documents
Culture Documents
Insuran ce compa ny
Insuran ce a%ent
A%ent
T!e scenario !as $een di""erent "or t!e %eneral insurers a no a%ency commission 'as paya$le "or 'ritin% $usinesses more t!an () la*! t!us pro!i$itin% $ro*ers&In t!e emer%in% scenario t!ere 'ill $e t!ree players + t!e $uyers 'ill consist o" consumers employees and employers and t!e carriers or t!e policy issuers 'ill "ocus mainly on li"e and annuities property and casualties !ealt! and ancillaries and t!e critical lin* in t!e system 'ill $e t!e distri$utor& T!ose '!o 'ill pro#ide #alue,added and lo',cost ser#ices 'ill $e t!e sur#i#ors&
insurance companies in India& T!e insurance company selects a sur#eyor '!o is 8uali"ied to underta*e t!e assessment o" loss or dama%e in relation to t!e policy issued and also dependin% upon t!e estimated loss in#ol#ed&
/is duties include: In#esti%ate and con"irm t!e cause o" loss& Ad#ise t!e insured to ta*e %ood care o" sal#a%e to miti%ate t!e loss& To ensure t!at insured !as ta*en all necessary steps to contain t!e loss& Assess t!e 8uantum o" loss& Determine t!e lia$ility o" t!e insurers 'it!in t!e "rame'or* o" t!e policy conditions& To act on $e!al" o" t!e insurance company in disposal o" sal#a%e to reali1e ma:imum #alue& T!ou%! t!e sur#eyor is appointed $y t!e insurance companies !e is re8uired to $e impartial and o$9ecti#e in !is assessment "a#ourin% neit!er t!e insurers nor t!e insured !o are t!e t'o parties to t!e contract under a policy& T!is necessitates a !i%! de%ree o" pro"essionalism&Since lon% time t!e %eneral insurance industry 'as su""erin% on account o" satis"action 'it! t!e sur#eyor2s loss assessment report and delay in t!e settlement o" claim& T!ere"ore IRDA !as recently issued re%ulations pertainin% to sur#eyors and loss assessors '!ic! cate%ories on t!e $asis o" t!eir 8uali"ication practical e:perience and past e:periences&
TPA2s $ene"it $ot! t!e insurer and insured& For insured $etter ser#ices are o$tained and "or insurers t!ey su$stantially reduce t!e administrati#e costs& TPA license is %ranted to companies re%istered under t!e Companies Act (>?@ !a#in% a minimum paid up capital o" Rs& (&)) crores 'it! "orei%n participation not e:ceedin% <@A& 5icense is usually %ranted "or a period o" B years& Earlier t!e insured 'as reim$ursed all t!e !ospitali1ation e:penses $ut 'it! introduction o" TPA2s all t!e !ospitali1ation ser#ices operate2 on cas!less $asis since t!e payment is directly made to t!em&TPA2s are entitled to commission $y insurers on a mutually a%reea$le terms $ut as per t!e IRDA %uidelines it cannot e:ceed (?A o" premium amount& TPA2s !a#e to tie,up 'it! !ospitals '!ic! o""er !ospitali1ation ser#ices& Eac! TPA may tie,up 'it! any num$er o" insurers and li*e'ise eac! insurer can empanel any num$er o" TPA2s&
Procedure
All t!e records o" medical insurance policies o" an insurer are trans"erred t!e TPA '!o %enerally issue identity cards to all t!e policy!olders '!ic! t!ey !a#e to s!o' to t!e claim policy!older !as to in"orm TPA on <= !our toll "ree line pro#ided $y t!e TPA& On in"ormin% t!e TPA policy!older 'ill $e directed to a !ospital '!ere t!e TPA !as a tied up arran%ement& /o'e#er policy!older 'ill !a#e t!e option to 9oin any ot!er !ospital o" !is c!oice $ut in suc! case payment s!all $e on reim$ursement $asis& TPA issues an aut!ori1ation letter to t!e !ospital "or t!e treatment '!erein t!e TPA 'ill pay "or t!e treatment& TPA 'ill $e trac*in% t!e case o" t!e insured at t!e !ospital and t!e point o" disc!ar%e all t!e $ills 'ill $e sent to TPA& TPA ma*es t!e payment to t!e !ospital and sends all t!e documents necessary "or consideration o" claims alon% 'it! $ills to t!e insurer& Insurer reim$urses t!e TPA&Presently t!e role TPA is con"ined to medical;!ealt! ser#ices& /o'e#er t!eir 9o$ can $e e:tended to: Documentation and policy issuin%& 5e%al ser#ices and claims reco#ery ser#ices under su$ro%ation ri%!ts& Record #eri"ication under ad9ustment policies& .edical e:amination ser#ices "or li"e insurance policies and o#erseas .ediclaim policies&
Co,insurance reco#ery ser#ices "or $ot! premiums and claims& Follo' up o" ser#ices "rom reinsurance companies& Ser#icin% o" motor policies& Inspection and assessment o" ris* prior to issuance o" policy& Ar$itration ser#ices&
A0ENTS
.ost o" t!e li"e insurance companies in India "ollo' t!e traditional route o" mar*etin% t!rou%! a%ents& In case o" pri#ate players t!ey are nomenclature as Insurance Ad#isors;Planners& T!e companies %enerally emp!asi1e on $uildin% a %ood "ield "orce trained to %et people t!in*in% a$out t!eir "amily2s "inancial security and recommend appropriate policies "or t!eir needs& A%ents !a#e traditionally pro#ed to $e !i%!ly success"ul means o" distri$ution o" insurance products& E#ery insurance a%ent !as to o$tain a license "rom IRDA $e"ore conduct o" insurance $usiness and "ollo' a code o" conduct prescri$ed t!ereunder&
BROCERS
Insurance $ro*ers are pro"essional '!o assess t!e speci"ic insurance needs o" t!e client e#aluate t!e ris* and su%%est a suita$le insurance co#er "or t!e clients& IRDA2s Annual Report <))(,)< descri$ed $ro*ers as DInsurance $ro*ers as pro"essionals are e:pected to "ill t!e #oid in terms o" pro#idin% "or speci"ic insurance needs o" t!e client $y assessin% t!e ris* on $e!al" o" t!e client ad#ise on t!e miti%ation o" t!e speci"ied ris* identi"yin% t!e optimal insurance policy structure $rin% to%et!er t!e insured and insurers carry out 'or* preparatory to insurance contracts and '!ere necessary assist in t!e administration and per"ormance o" suc! contracts in particular '!en claims arise&E As per t!e said report DT!e ad#ent o" $ro*ers on t!e scene is li*ely to result in impro#ement in customer ser#ice trans"er o" tec!nolo%y and mana%erial *no',!o' $ene"its to insurance companies t!rou%! increased mar*et penetration and "acilitate increased retention capacities $y optimi1in% reinsurance pro%rammes&EIRDA !as issued %uidelines "or issue o" license and re%ulation o" a""airs to insurance $ro*ers and insurance consultants in <))<& As per t!e said %uidelines t!e $ro*ers are di#ided into "ollo'in% cate%ories: Cate%ory I + Direct 0eneral Insurance $ro*er Cate%ory II + Direct 5i"e Insurance $ro*er Cate%ory III + Reinsurance $ro*er
Cate%ory I6 + Composite $ro*er Cate%ory 6 + Insurance Some o" t!e important pro#isions as contained t!erein are: T!e %uidelines speci"ically pro#ide t!e 8uali"ication no rms and t!eir "unctions "or #arious classes o" $ro*ers& T!e net 'ort! re8uirement "or composite insurance $ro*ers is Rs& <&?) crores 3'it! a cap o" <@A on "orei%n e8uity participation4& For direct $ro*ers and reinsurance $ro*ers it is Rs& ?) la*!s and Rs& <&)) crores respecti#ely& In case o" insurance consultants a $an* %uarantee o" Rs& ?&)) la*!s !as to $e "urnis!ed to IRDA& T!e $ro*era%e is determined $y t!e IRDA in accordance 'it! mar*et practices $ut it cannot e:ceed B)A o" t!e premium& T!is commission s!all $e paid $y t!e $ro*ers to t!e insurers& E#ery $ro*er !as to maintain a sol#ency mar%in + Rs& <? la*!s or ()A o" t!e %ross $ro*era%e and "ees recei#ed in t!e pre#ious year '!ic!e#er is !i%!er& A statement o" sol#ency mar%in "rom t!e auditors s!all $e "urnis!ed $y t!e $ro*er to t!e aut!ority& T!e $ro*ers are to maintain t!e $oo*s o" accounts as prescri$ed and !a#e to su$mit t!e audited "inancial statements and report t!ereon 'it!in @) days "rom t!e end o" t!e accountin% year& T!e records are to $e preser#ed "or at least ? years& T!e $ro*ers !a#e to disclose in"ormation on #arious matters as and '!en it is re8uired $y t!e aut!ority& T!e $ro*ers are also re8uired to "acilitate inspection '!en it is ordered& Unli*e insurance a%ents '!o are retained $y Insurance Companies Bro*ers are retained $y t!e insured and t!ere"ore t!eir primary responsi$ility is to'ards t!e insured& Some o" t!e $ene"its o" introducin% $ro*ers in t!e Indian mar*et are: (a) Improvement in customer service: -it! increased competition insurance $ro*ers !a#e a %reater moti#ation to introduce ne' and inno#ati#e products to $e more responsi#e to consumer needs and to deli#er !i%!er terms 8uality ser#ices& Indian corporates and consumers $ene"its directly in terms o" ser#ice as 'ell as product and policy inno#ation and are conse8uently a$le to secure appropriate insurance co#er more cost e""ecti#ely& (b) Transfer of technology and managerial know-how: Insurance $ro*ers introduce international $est practice in tec!nical s*ills and products trainin% pro%rammes systems and tec!nolo%y and mana%erial tec!ni8ues& Currently t!e a#aila$ility o" trained manpo'er is a ma9or constraint in t!e de#elopment o" t!e
insurance $ro*in% $usiness in India and international players can contri$ute !ea#ily in $rid%in% t!is %ap& (c) Benefits to insurance companies: .ost ma9or %lo$al insurance companies spend t!e ma9ority o" t!eir time !andlin% commercial and industrial ris*s& T!ey "ind dealin% 'it! $ro*ers to $e easier and speedier $ecause only t!e intricate points or special re8uirements need detailed discussion& Bro*ers also assist in creatin% insurance a'areness increasin% mar*et penetration and act as a catalyst to increase competition and impro#e customer ser#ice& (d) Foreign e change considerations: Bro*ers ena$le Indian insurers to increase t!eir retention capacities $y applyin% t!eir international reinsurance s*ills in optimi1in% t!eir reinsurance pro%rammes t!ere$y e""ectin% "urt!er sa#in% in "orei%n e:c!an%e out"lo'& In addition t!ey can assist t!e local insurers to de#elop ne' products and accordin%ly increase t!e premium $ase&
CORPORATE A0ENTS
Corporate a%ents are a ne' concept recently introduced $y IRDA to "acilitate t!e distri$ution o" insurance products $y t!e corporates& T!e main a%enda to promote corporate a%ents is to "acilitate D$anc assuranceE in India& IRDA report o" <))(,)< e:presses concerns on t!is issue and state t!at in India t!e pu$lic sector $an*s and re%ional rural $an*s and microcredit institutions !a#e 'ide reac! and can !elp "ul"ill t!e $asic o$9ecti#e o" deeper insurance penetration in t!e country& IRDA !as also issued %uidelines "or 5icensin% o" corporate a%ents '!ic! pro#ide "or minimum educational 8uali"ications "or speci"ied persons and practical trainin% re8uirements and code o" conduct&
BANC ASSURANCE
Banc assurance is a concept t!at !as re'ritten t!e 'ay in '!ic! insurance products are distri$uted in many parts o" t!e 'orld and !as t!e potential to do t!e same in many ot!er mar*ets& By o""erin% a !olistic "inancial ser#ices pac*a%e encompassin% $an*in% insurance lendin% and in#estment products $an*s can ma:imi1e distri$ution o" products to a capti#e customer $ase& In mar*ets '!ere it is "irmly esta$lis!ed $anc assurance c!annels can ta*e an impressi#e mar*et s!are o" ne' li"e $usiness + around ??A in France and $et'een <)A and B)A in many ot!er European countries&
customer pro"ita$ility measurement systems in $an*s cas! mana%ement relations!ip 'it! corporations and t!e "act t!at $anc assurance distri$ution is more cost e""ecti#e t!an traditional distri$ution are some o" t!e *ey attraction o" t!is c!annel& <F pu$lic sector $an*s and (>@ re%ional rural $an*s account "or ><A o" t!e $ranc! net'or* in India&-it! o#er @) ))) $ranc!es o" commercial $an*s and an a#era%e population ser#ed per $ranc! o" (? ))) $anc assurance is e:pected to $e a critical distri$ution strate%y "or t!e insurance companies& In "act t!e net'or* includes BB ))) rural $ranc!es and (= ))) semi,ur$an $ranc!es a$out @)A o" t!e total num$er o" $ranc!es&
communication c!annels suc! as statement inserts direct mail AT.s telemar*etin% etc& Ban*2s pro"iciency in usin% tec!nolo%y !as resulted in impro#ements in transaction processin% and customer ser#ice&By success"ully minin% t!eir customer data$ase le#era%in% t!eir reputation and Gdistri$ution systems2 3$ranc! p!one and mail4 to ma*e appointments and utili1in% Gsales tec!ni8ues2 and products tailored to t!e middle mar*et European $an*s !a#e more t!an dou$led t!e con#ersion rates o" insurance leads into sales and !a#e increased sales producti#ity to a ratio '!ic! is more t!an enou%! to ma*e $anc assurance a !i%!ly pro"ita$le proposition&
.ore income + %enerated "rom an increase in o#erall product sales and $etter customer retention& 0reater producti#ity + a $anc assurance sales person2s producti#ity !as $een measured to $e ??A !i%!er t!an t!e a%ency e8ui#alent& Iuality sales culture + t!at is customer dri#en& Impro#ed sta"" retention + !i%!er le#els o" satis"action amon% sales sta"" t!rou%! %ood trainin% and remuneration sc!emes& Cross,sellin% opportunities + stren%t!enin% customer relations!ip mana%ement&Cey issues to $e addressed to ma*e $anc assurance success"ul are: Bot! t!e $an* and insurance company need to impro#e e""ecti#eness o" t!e Sales c!annels $y identi"yin% and %ainin% access to tar%et customers addin% pus! to mar*et pull trainin% o" sales sta"" di""erentiatin% per"ormance "rom competition and controllin% cost per unit sold& Product needs to $e Tailored to meet t!e need o" t!e customer $ase and "or ne' distri$ution c!annels& Communication needs to $e streamlined to address any culture issues $et'een t!e $an* sta"" and t!e insurance sta""& Similarly di""erences in compensation structures need to $e !andled sensiti#ely $e"ore t!ese start a""ectin% t!e moral o" t!e $ranc! sta""& Traditional processes need to $e redesi%ned not only to ta*e ad#anta%e o" t!e ne' tec!nolo%y $ut also to a""ect a streamlined system $et'een $an* and t!e insurance company& Tec!nolo%y can $e used to put e""ecti#e use in sales support "unction sta"" trainin% smoot!er processin% and online inte%rated in"ormation system& In"ormation system needs to $e re#ie'ed and per"ormance measurement parameters need to $e specially adapted to $anc assurance& S*ills need to $e de#eloped and reallocation o" assets and resources + "inancial and !uman may also $e re8uired $et'een t!e $an* and insurance company&