A single product covering all basic needs of insurance will help increase the reach of insurance, said T.S. Vijayan, Chairman, Insurance Regulatory and Development Authority.
In his keynote address at the seventh global insurance summit organised by Assocham here on Wednesday, Vijayan said the present practice of separate policies to cover life and non-life risks would leave the customer with no option but to take multiple policies.
“This is very cumbersome and appears to be one of the major roadblocks in increasing insurance coverage. Though IRDA has allowed tie-up of life and non-life insurers to offer micro insurance products, there has been no significant progress in this area,” he said.
The micro insurance, intended to provide insurance to low-income groups, covered more than 139 lakh with 50 lakh policies during 2012-13. “However, we observe that micro insurance business has low persistency and claim ratios,” he said, adding that lack of awareness and effective communication with the customer were causing this problem.
“The claims payment procedure should also be simple and transparent to ensure timely payment of all eligible claims. Identifying cost-effective ways of distributing insurance cover would be the key to success in increasing the insurance coverage among low-income groups,” the IRDA chief said.
In his inaugural address, Andhra Pradesh Governor E.S.L. Narasimhan said making insurance simple and understandable was a major challenge for the industry. He asked insurers to be more humane and reasonable while settling claims.
P. Nandagopal, Chief Executive Officer, IndiaFirst Life Insurance and Chairman of Insurance Council, Assocham, said mass marketing methods should be designed for make insurance available to the low-income groups.
naga.gunturi@thehindu.co.in