Page 28 - Insurance Times August 2019

magnitude of earthquake is more than 8 on Richter The Insurance Industry is experiencing a period of historic
Scale in California or towns and cities in Japan's specific unprofitability as the gap between cost of capital and
Earthquake Zones. returns on equity remain at highest levels currently.
Reinsurers have to become Restrictive-Prohibitive and have
In short, Cat Models are created with reliable probabilities to act with Caution and Conservatism.
of Nat-Cat Events.
CRESTA Zone-wise exposure data is to be updated
Market Nat-cat Pools and Cat Models: continuously. Cat Models are to be used as guidelines of

Instead of covering AOG Perils by Proportional Reinsurance Probability of Nat Cat Events in specific zones.
Treaties, Reinsurers prefer Cat XL Treaty Programs and most
Risk Management of Natural Cat Perils are Man-Made Cat
preferred method is The Creation of Market Nat-Cat Pools
Perils of RSMDST - Riots, Strikes, Malicious Damage,
where all insurers become members and AOG Perils are
covered with uniform and better levels of rating AOG Perils Sabotage and Terrorism and Civil Commotion, Confiscation
Risks as prescribed by the Underwriting Committee of the as well as War or War like conditions - are all to be
considered as political risks and covered according to
Market Pool.
guidelines of the Market Pools' Underwriting Committee.
Similarly, Market Terrorism Pools are created. The usual Political Risks Exclusion Clause need not be
included if political risks are to be covered.
Market Cat Exposures are then adequately rated and
covered by market Insurers as members of the Pool. Rating Corrective Measures are easy to implement for all when all
Levels are adequate as all insurers have to follow Uniform insurers are members of the Market Pool.
Rates as prescribed by the Underwriting Committee of the
Market Pools. The Pool is then protected by Cat XL Treaty Insureds, Insurers, Brokers, Agents, Reinsurers and
Programs priced suitably according to Nat-Cat exposures. Reinsurance Intermediaries with Risk Management Team of
Underwriters- all collectively act to introduce ORDER despite
Conclusions: many uncertainties and in this task, CRESTA Zonal

It is interesting to take note of Analysis of AM Best's truthful Assessments and Cat Modelling are the best methods of
observations on 19th June, 2019: Risk Management in respect of AOG Perils Risks. T

Your insurance gets tech-savvy
Paperwork and insurance agents have long been the foundation stones for your insurance policies. However, insurers
have used technology along various steps of the insurance services value chain: from the application to claim-processing
stage. Let’s take a deeper look at the benefits of these services.
Artificial intelligence: Artificial intelligence (AI) first entered insurance through chat bots. Some insurers have now
integrated use of AI on WhatsApp. For instance, Reliance General Insurance Co Ltd has used AI by introducing Reliance
Interactive Virtual Assistant (RIVA) which generates policy quotation, accepts claim intimation and provides policy copy
on WhatsApp and Facebook Messenger.?
Wearable devices: Insurers give discounts in insurance policies by tracking lifestyle activities. For example, ManipalCigna
Health Insurance’s Get ProActiv is integrated with their Healthy Rewards Program allowing you to earn incentives by
tracking your activities using select wearable devices. You can also directly enter non track-able activities into the
application.

Mobile applications: Some insurers allow you to upload your claim documents for a certain amount digitally. Bajaj
Allianz General Insurance has a feature called Health – Claims By Direct Click (CDC), which allows you to submit
documents through the mobile application ‘Insurance wallet’ for assessment and settlement. Through this you can
receive claims of up to Rs 20,000 in two working days for admissible claims.

Video conferencing: One of the examples of this service is Motor On The Spot (Motor OTS) by Bajaj Allianz General
Insurance Company Ltd. “Normally, the claimant has to submit original hardcopies followed by a physical inspection
of the vehicle,” said Sasikumar Adidamu, chief technical officer, Bajaj Allianz General Insurance. (Source: HT)

28 The Insurance Times, August 2019