Page 11 - Insurance Times March 2016 Sample

Digitalisation of LIC under progression
The decision by Life Insurance Corpo-
ration to maintain its own records in
digitised format may force insurance
repositories to either shut
down or alter their business
plans.
The five insurance reposito-
ries operating in the market
are NSDL Database Manage-
ment, Central Insurance Repository,
CAMS Repository Services, SHCIL
Projects, and Karvy Insurance Reposi-
tory. According to IRDAI, LIC has a 73
per cent market share in the life insur-
ance segment.
Incidentally, SHCIL has decided to exit
the insurance repository (IR) business.
Jeevan Shikhar - another benefitting plan from LIC
LIC has launched 'Jeevan Shikhar', a
closed-ended plan which is open for sell
from January 11 up to March
31. It is a non-linked, with
profits, single premium plan,
wherein the risk covered is
10 times of tabular single
premium providing a combi-
nation of savings and risk cover. The
plan is available from ages 6 to 45
years.
Minimum maturity sum assured is Rs
1 lakh, with maximum basic sum as-
sured having no limit. The maturity
sum assured can be in multiple of Rs
LIC leads in Life Insurance claim settlements: IRDAI
report
Life Insurance Corporation of India
continues to maintain its lead in the life 15, compared to 98.14 per cent dur-
insurance industry with respect to
claims settlement, according to
IRDAI's annual report.
"The claims settlement ratio of LIC was
better than that of the private life in-
surers," the regulator said in its annual
report. According to the report, the
settlement ratio of LIC increased to
Confirming the development, Pandula
Sreelakshmi, COO of SHCIL Projects,
said, "We will be exiting the insurance
repository business as we feel
having a corporate agency li-
cence will make more sense
from a business perspective."
S. V. Ramanan, CEO, CAMS
Insurance Repository, said
LIC's decision to not tie up with any IR is with the private sector's 7.78 per
a dampener to the repository business.
IRDAI has asked insurers to pass on to
insurance repositories only those poli-
cies that are to be issued electroni-
cally. Even here, the insurer has the
option to maintain the policy in the
digital format on its own.
20,000 only, with a policy term of 15
years. On the policyholder surviving to
the end of the policy term
the maturity sum assured
along with loyalty addition
shall be payable. In case of
death of the life assured dur-
ing first five policy years and
after commencement of risk 'sum as-
sured on death' equal to 10 times the
tabular single premium will be payable.
On death before commencement of
risk, single premium without interest
after deducting extra charged, if any,
will be refunded.
98.19 per cent during the year 2014-
ing the previous year.
The claims settlement ratio for private
life insurers increased 89.40 per cent
during financial year 2014-15 from
88.31 per cent during the previous
year. Private insurers had repudiated
more number of claims (9,486) com-
pared to LIC (8,689).
The Insurance Times, March 2016 11
LIC has the best claim
settlement report
LIC's claim settlement at 98.19 per
cent is better
than the en-
tire private
sector's 89.40
per cent. It
has rejected
only 1.15 per cent claims compared
cent. In actual numbers, the rejec-
tions will be much higher because of
LIC's sheer size. LIC sold 12 million
policies in the first nine months of
2014-15, while the entire sector sold
16 million policies.
Investment advisor Harsh Roongta
believes claim settlement is a good
starting point as it helps weed out
companies with bad settlement ratio.
"Most claims are made in the initial
years, leading to investigation from
all insurers because of the premature
nature of the claim. If IRDAI gives
claim settlement numbers of this ini-
tial period, the entire sector is likely
to be on a similar footing." "Another
reason for rejections from private
sector players would be due to higher
sum assured.
Today, there are term policies of Rs
2 crore and above. In LIC's case, the
sum assured amounts will be much
smaller," Roongta adds. An addi-
tional reason for less acceptance of
private sector claims is that they has
more innovative products and can
become victims of fraud more eas-
ily, leading to higher claims rejection.
Prospective policyholders should also
be looking at other parameters such
as servicing and pricing as well. "If I
am a healthy person who wants a
good term policy, I will only go for
the cheapest product with decent
features," adds Roongta.