Page 65 - India Insurance Report 2023- BIMTECH

India Insurance Report - Series II 53

authorized motor dealers;

 With the introduction of long-term covers of Motor TP, the liability of motor TP would further
increase, with increased awareness of insurance and legal implications;

 Though the overall ICR of Motor TP has come down to below 95% with regular premium revisions,
increased insurance awareness, and legal implications with higher penalties for the delayed payment of
claims, containing the future cost of Motor TP claims would be one of the major challenges for the insurers;

 Insurer’s relationship with Motor Dealers, OEMs, Authorized Repair Shops, and Private Motor
Garages needs to be strengthened on an equal footing, emphasizing quicker settlement and transparent
billing or repair estimates made available to the insurers.

 An integrated IT system must be developed to curb the auto claim leakages.

 Technological disruption through the Internet of Things (IoT, Big Data, Artificial Intelligence, Block
Chain Technology) would drive new product innovations in Motor Insurance and telematics product
solutions like Smart Drive Policy, Pay-as-you-go, Driverless cars, etc.

 When the developed markets are testing driverless cars and technology-enabled services (Robo Advisors
and Drone-based insurance survey and assessment), which are also becoming a reality in the Indian
market, what are the challenges or new risks that these technological changes would bring into the
market? Do these challenges propel Indian insurers to develop new risk covers? These need serious
R&D efforts by the industry.

 Since Own Damage (OD) can be separately sourced and underwritten from third-party (TP) covers
from different insurers, every OD policy must mention the TP cover particulars, and in case of an
OD claim, the possible TP claims must be communicated to both the OD and the TP underwriters;

 The regulatory caveat for the independent survey of the OD claim beyond the current threshold must be
raised considerably so that both the costs and the direct control by the OD underwriters can be ensured.

3.2.Health Insurance

The COVID-19 pandemic created a massive imbalance in many countries’ social, economic, and
health equity. This intervention has caused a multifold increase in health care spending and the cost of
health care significantly to a higher level globally. The average per capita healthcare spending has almost
increased to 3 times to $11000 now compared to $4000 before the COVID-19 pandemic (OECD, 2021).
The World Health Organization (WHO) and other groups had appealed to the top 20 economies to
fund $23.4 billion to support poor countries with adequate vaccination, tests, and drugs to contain the
spread. All these health uncertainties (climate change & pandemics) will push the healthcare sector to
grow faster in the coming years and is projected to reach around US$ 25 trillion by 2040 (World 2021
Economic Forum, as well as IRDAI Annual Report, 2022).

After the pandemic, insurance awareness among the customers/general public has increased
significantly. As a result, the health insurance business grew by over 30% during 2021-22 and posted a