What makes National Insurance third best?

In the HT-MaRS survey, customer satisfaction on customer servicing and interaction was measured using six parameters — product enquiry stage, purchase transaction, policy issuance, hospital network, renewal, and transparency. And the public sector National Insurance Company (NIC) ranked third, coming after private sector Tata AIG and ICICI Lombard.

There was also that little matter about it being the only state-owned company to feature at all among the top five in terms of customer satisfaction. The survey was carried out among 2074 medical insurance policy holders in eight major cities of India — Delhi, Lucknow, Kolkata, Mumbai, Ahmedabad, Chennai, Bangalore and Hyderabad.

While industry analysts said that the insurer had resorted to reasonable pricing, which went in its favour, insurance sector experts pointed out that claims settlement takes longer in NIC compared to its competitors, which might explain the third position.

“It takes about one to one-and-a-half months for settlement of claims in NIC,” said a leading third party administrator (TPA), on conditions of anonymity.

So what can public sector insurers do to get better in the area of customer satisfaction?

The four PSU insurers — National Insurance Company, New India Assurance, Oriental Insurance and United India Insurance — which together manage about R6,000 crore of health insurance business, complain about being saddled with a commercially unviable claims settlement ratio of 115%. They have to say that the way TPAs function also has a major bearing on customer satisfaction, and forming a common TPA is one way of cutting down on costs.

“The four state-owned general insurance companies are looking to engage a third party administrator to ensure that customers are not put through any major trouble especially when we have no health regulator, the process is on track and we hope to have one soon,” said NIC chairman and managing director NSR Chandra Prasad.

TPAs are intermediaries between patients and insurance firms. Typically stationed at hospitals, TPAs take care of the administrative process of mediclaim policies. “This arrangement will provide economies of scale to the four insurers,” said Prasad. NIC has set a claim settlement target for 2010-11 at 90%. And as Prasad lets in, “We are focused on customer service more than profits and business models.”

As Amit Mitra, secretary general of industry body Federation of Indian Chambers of Commerce and Industry puts it, “The emphasis has to be on consumer awareness and satisfaction, provision of quality health care, improved insurance services and greater collaboration and trust between insurers and healthcare providers.”

Health Insurance | How to keep your insurance beneficial

Benefits of an insurance policy are obtained if your policy is going for the long term. The earlier you buy, the cheaper will be your life insurance premium. If you buy insurance at the right time, you surely don’t want to pass the benefits by missing your premium paying deadline because of a cash crunch or failing to notice.
The Insurance Regulatory and Development Authority (Irda) has provided a standardized window of opportunity for people to make up for late payment. In general insurance policies, especially health insurance, benefits get added for every year in which you don’t make a claim.
For unit-linked insurance plans (Ulips) and health insurance, the rules of reviving a lapsed policy have been standardized. A policy lapses when the premiums are not paid within the deadline or within the grace period of about a month after the main deadline. Here under are the current rules regarding the health insurance.
A health insurance policy needs to be renewed every year. It is obligatory on the insurer’s part to renew your policy, irrespective of the number of claims you may have made.
Till about a couple of years back, the concept of grace period did not really exist in the health insurance sector. Insurers considered any late payment as a break in the policy and refused to renew which was a cause for concern especially for senior citizens (as it meant no health insurance at all).
In March 2009, the sectoral regulator standardized this process. It made it mandatory for the insurers to clearly state the terms and conditions of renewal, including the age up to which a policy could be renewed. Insurers were also required to give indicative premiums of future renewals. Apart from these renewal norms, Irda introduced a window of a grace period of at least 15 days. So you got another 15 days after the due date to renew your policy.
But now: Though Irda has put in place the rules, they are still not followed to the last word.
In reality some state-run insurers give only a 7-day window. However, this is more a problem of internal communication and as a customer it means approaching the higher ups like the regional office or main office for a 15-day extension. The rules of the game are in favor of the policyholder so one should take all necessary measures to keep important insurance policies from lapsing.