M. RamadossChairman-cum-Managing Director

mramadoss@orientalinsurance.co.in

NON-PERFORMANCE:

AN INSURER’S RATIONALE

IMPORTANCE• One of the prime causes for the entry of

private sector in the industry is to throw the industry open to competition from several players

• Competition is expected to bring in the best in the industry, bring in the best terms for the customers

• Remember the Rs.28 per “incoming” call charged by Mobile phone Companies or the Rs.25000 one-way airfare to Singapore!!

WHAT IS CUSTOMER SERVICE?

A business cannot exist unless it has customers to buy the products it wants to sell. Customer service is the term used to describe what happens at the points at which the customer comes into contact with

the business.

CUSTOMER SERVICE CIRCLE

CUSTOMER EXPECTATIONS

IN GENERAL INSURANCE, CUSTOMER EXPECTATIONS ARISE AT TWO STAGES

1. POLICY SERVICING STAGE2. CLAIMS SERVICING STAGE

POLICY SERVICING

POLICY SERVICING

• INFORMATION STAGE• ENLISTMENT STAGE• POLICY SUPPORT STAGE• SECONDARY SERVICES

INFORMATIONPROSPECTS NEED ADEQUATE INFO ON

COVERS, TERMS AND RATES TO ENABLE THEM DECIDE THEM THE NEED FOR INSURANCE, THE TYPE OF COVER, THE RIGHT AMOUNT

NEED FOR BROCHURES, PAMPHLETS, KNOWLEDGEABLE INTERMEDIARIES

INSURER’S REPUTATION AND IMAGE SHOULD INSPIRE CONFIDENCE

‘HELP DESK’ FOR PROVIDING COVER INFORMATION

ENLISTMENT STAGESEVERAL PROSPECTS REQUIRE

ASSISTANCE IN DOCUMENTATION LIKE FILLING UP PROPOSAL ETC.

ENLISTMENT SUPPORT BY INTERMEDIARIES SHOULD BE DONE WITH CARE AND ONLY WITH FULL CONCURRENCE OF THE INSURED HIMSELF

POLICY SUPPORT STAGE• SATISFACTION OF FAIRNESS IN THE

DEAL• SPEED OF DELIVERY OF DOCUMENTS• CORRECT POLICY DOCUMENT –

CONSENSUS-AD-IDEM• EXPLANATION OF THE POLICY DETAILS

WHERE REQUESTED BY CUSTOMER

SECONDARY SUPPORT STAGE

INCLUDES POST POLICY SERVICES SUCH AS

ENDORSEMENTSALTERATIONS & ADDITIONSCANCELLATIONS

INTERMEDIARY ISSUES• AGENTS/ BROKERS OVER-SELL &

INSURERS UNABLE TO MEET THE CUSTOMER EXPECTATIONS

• INTERMEDIARY PROPROTIES ARE DIFFERENT FROM COMPANY’S PRIORITIES – EXAMPLE MEDICAL POLICIES FOR AGED PERSONS

CLAIMS SERVICING

CLAIMS SERVICING• THE CORE OF CLAIMS SERVICING IS

– ‘HELP DESK’ FOR IMMEDIATE RESPONSE– TRANSPARENCY OF ASSESSMENT– SPEED OF SETTLEMENT OF CLAIMS– LEAST DISTURBANCE / INCONVENIENCE

TO THE CUSTOMER– FAIR AMOUNT OF SETTLEMENT

CLAIM ASSISTANCE • CUSTOMER BE TREATED WITH CARE

& UNDERSTANDING AND NOT WITH SUSPICION & DISTRUST

• SURVEYOR COMPETENCY IS VITAL• ALL REQUIREMENTS TO BE LISTED IN

ONE GO• SYSTEM OF ADMISSION OF LIABILITY

INTERMEDIARY ISSUES• SURVEYORS SHOULD SUBMIT REPORTS

WITHIN TIME FRAMES• REQUEST FOR DOCUMENTS/ INFORMATION

SHOULD BE IN WRITING• ASSESSMENTS SHOULD BE FAIR AND

TRANSPARENT • DISPUTED ISSUES TO BE BROUGHT TO THE

URGENT KNOWLEDGE OF INSURER

CLAIM SETTLEMENT• IF SETTLEMENT AMOUNT IS DIFFERENT

FROM THE CLAIMED AMOUNT, FULL REASONS FOR DIFFERENCE TO BE GIVEN TO INSURED

• IN CASE OF REPUDIATION, CLEAR REASONS FOR REJECTION TO BE GIVEN

• INFO ON APPEALS & GRIEVANCE REDRESSAL

PERFORMANCE APPRAISAL OF INSURERS

HOW HAVE WE PERFORMED?• CREDIBILITY OF INSURERS – A NON-

ISSUE• ALL INSURERS HAVE SOME SYSTEM OF

TECHNOLOGY FOR QUICK ISSUANCE OF POLICIES, BUT DELIVERY BACKLOG STILL PERSISTS DUE TO ADMN ISSUES, POLICY STAMPS ETC

• DEFINITE GAPS IN CORRECTNESS OF THE POLICY

PERFORMANCE IN CLAIMS SERVICING

• LACK OF EMPATHY OR EVEN SYMPATHY• CUSTOMER IS NOT CLEAR ON ACTION TO

BE TAKEN IN THE EVENT OF A CLAIM• DELAYS IN EVERY STAGE EVEN IN

APPOINTING SURVEYOR• SURVEYOR INCOMPETENCIES –

BARGAINERS AND NOT LOSS ASSESSORS• CLAIM OFFER LETTERS DO NOT DISCLOSE

BREAK-UPs

CUSTOMER SERVICE BALANCE SHEET

ORIENTAL FOR INSTANCE ISSUED ABOUT 1 CRORE POLICIES AND HANDLED 6 LAKH CLAIMS DURING 2005-06

TOTAL NUMBER OF GRIEVANCES LESS THAN 5000 WHICH IS 0.04%

EVEN THIS HAS TO BE REDUCED

NON-PERFORMANCE• GENERALLY, ONLY MOTOR AND

HEALTH GIVE RISE TO GRIEVANCES• MOST GRIEVANCES RELATE TO

DELAY IN SETTLEMENT/ REJECTION• VERY FEW COMPLAINTS ON RUDE

BEHAVIOUR OF EMPLOYEES• UNDERWRITING GRIEVANCES ARE

VERY VERY FEW

NON-PERFORMANCEHEALTH

• PRE-EXISTING CONDITONS • TPA IS NON-RESPONSIVE TO URGENCY• BREAK IN INSURANCE• REQUEST FOR COVER FOR OLDER

PEOPLE • HIGHER PREMIUM CHARGED BASED ON

AGE

NON-PERFORMANCEMOTOR

• ACCEPTANCE OF OLD VEHICLES• RENEWAL OF COVERS WITH HIGH

CLAIMS RATIOS• DL/RC VERIFICATION & INVESTIGATION• SALVAGE VALUATION IN CASH LOSS• DEPRECIATION AND DENIAL OF

CERTAIN PARTS

FUTURE EXPECTATIONS

1. E-INSURANCE: POLICIES ON INTERNET/ ATM

2. POLICY/ CLAIMS HISTORY AND STATUS ON INTERNET

3. TRANSACT SIMPLE POLICY RENEWALS OVER INTERNET WITH CREDIT CARD PAYMENT OPTIONS

4. M-INSURANCE: TRANSACTIONS THROUGH MOBILE PHONES

FUTURE EXPECTATIONS5. INTEGRATED HEALTH INSURANCE

WITH PREMIUM DEDUCTED AT SOURCE- SOCIAL SECURITY CHIP CARD WHICH WILL ALSO ASSIST IN CASHLESS CLAIM FACILITY

6. HASSLE-FREE MOTOR CLAIM SETTLEMENT AND STANDBY VEHICLE DURING REPAIR PERIOD

7. ONLINE CLAIM INFO & COMPLAINT TO OMBUDAMAN & CONSUMER FORUM

SOLUTIONS?• CUSTOMER EDUCATION BEFORE

SALES• REGULAR CUSTOMER EDUCATION

PROGRAMMES TO FEED UPDATED INFORMATION PERIODICALLY

• FULL USE OF IT IN UNDERWRITING AND CLAIMS

SOLUTIONS TO INTERMEDIARY PROBLEMS?

• FULL CONTROL ON APPOINTMENT OF SURVEYORS

• MONITORING SURVEYOR CORRESPONDENCE WITH INSURED

• TPA PERFORMANCE TO BE MORE CLOSELY MONITORED

• RUTHLESS PRUNING OF INTERMEDIARIES

SOLUTIONS?• EMPATHY TRAINING FOR EMPLOYEES• IMMEDIATE DECISION ON ADMISSION OF

LIABILITY• ENCOURAGE PRACTICE OF ‘ON ACCOUNT’

PAYMENT• REGULAR REVIEW OF PENDING CLAIMS• PERIODICAL ENHANCEMENT IN FINANCIAL

AUTHORITY FOR CLAIMS PAYMENT• COMPULSORY PAYMENT OF INTEREST ON

DELAYED CLAIMS

CUSTOMER FAULTS• SOME TIMES CUSTOMERS

ALSO ARE AT FAULT– NOT RESPONDING TO

REPEATED REQUESTS– FRAUDULENT

INTENTIONS– IRRITABILITY – why ask

all these unnecessary questions?

– EXAGGERATED / INFLATED CLAIMS

– LACK OF UNDERSTANDING OF POLCY COVERAGE

INSURER’S RATIONALETHERE IS NO EXCUSE FOR

NON-PERFORMANCE

EXCELLENT SERVICE IS LIKE HORIZON. THE NEARER YOU GO TOWARDS IT, THE

FARTHER IT GOES AWAY FROM YOU!!!!

WE ARE FAR AWAY FROM 100% CUSTOMER SATISFACTION AND MILES TO GO EVEN

BEFORE WE THINK OF SLEEPING

THANK YOU