Focus on customer satisfaction and loyalty, says IRDAI Chief

Insurance regulator IRDAI’s chairman on Thursday urged insurers to work on customer satisfaction and value addition to products to ensure sustainable growth of the industry. Insurance entities must provide more value to customers As new technology keeps coming up, people’s needs will be quite different, said Subhash Chandra Khuntia. Khuntia stressed that insurers must ensure ethical behaviour and redesign products based on the requirements of customers. The same old products will no longer do, he said, noting that such measures will also increase customer loyalty and ensure they keep paying their premium regularly. He pointed out that the 13th month persistency in India for the insurance industry is about 65 per cent compared to nearly 90 per cent in the rest of the world. From the customer’s point of view, there is a lot of discontent in health insurance products. The claim ratio varies widely, he said, singling out the heath insurance industry. He urged health insurers to ensure proper analysis takes place and the policy is explained in detail to the policy holder. There has to be sustainable growth of the insurance industry. Then shareholders will also find value, he said. The IRDAI chief also spoke about differential premium pricing for products such as health insurance and motor cover based on the behaviour of the customer, which would also help in developing healthy practices amongst people. Khuntia also said the IRDAI is working on a risk based capital framework for insurers for which the regulator has also circulated a paper. Under the framework, the companies which manage their risk well will have a lower capital requirement, he said, adding that the IRDAI is also working on risk based supervision guidelines. This is another area we would like to introduce for proper conduct of insurance companies. Insurance companies should come out with their own codes of self-regulation so that the regulator should not have to go into this, he said. The self regulation should focus on customer protection, efficiency and sustainable industry growth, he said.