GIC

Claims Settlement Procedure in General Insurance Companies

IndexSR NO TOPIC PAGE NO

1. Introduction of insurance in India 6-8

2. Brief history of insurance sector 9-11

3. Introduction to general insurance 12-13

4. Claims in insurance 14-15

5. Claims management 16-17

6. System of claims management 18-19

7. Stages of claims system 20-21

8. Management structure of General insurance company 22

9. Basic structure of General insurance company 23-25

10. Claim management department 26-27

11. Guidelines for claim settlement by IRDA 28-31

12. Procedure of settlement of claims 32-34

13. Important terms in claims 35-36

14. Factors affecting claims settlement 37-39

15. Delays in claim settlement 40-43

16. Role of agents in claim settlement 44-45

17. Role of agents in insurance company 46-47

18. Role of surveyors and assessor in claim settlement 48-50

19. Impact of claims on underwriting 51-53

20. Frauds in claim settlement 54-56

21. Some important highlights of General insurance company 57-58

22. Survey 59-70

23. Sample of Questionnaire used 71-73

24. Findings (Swot analysis) 74

25. Conclusion 75-76

26. Bibliography / Webliography 77

Abstract

Page 1


The field of insurance has taken a giant leap at the threshold of twentieth

century. Insurance have become an integral part of life of man all over the

globe. The proverb ‘Need is the mother of invention’ is proving equally correct

in case of insurance. Insurance have already had a considerable impact on many

aspects of our society. Claims management is another important aspect on

insurance. It is complex in nature that is true but it is a driving force to plant

confidence in the hearts of people.

Claims Management is one of the most challenging business processes in

the insurance industry. With the number of stakeholders involved, the

dependencies and the logistics, there is a need is to eliminate manual

interventions. For many organizations, claim management and administration is

viewed solely as a service operation. Claim management is expected to run the

claim process efficiently and keep expenses low, but little attention is given to

leveraging high-impact opportunities afforded through effective data

management. In fact, the data captured in the claim process, which all too often

are underutilized, are rich in valuable information for those who know how to

extract and analyze it.

Claims management is an expert system which generates the rules and

regulations for the assessment of general damages using the key information

contained in medical reports, surveyor report, loss assessor’s reports, claimant’s

petition and the procedures or conditions and warranties contained in the policy

document. The claims management regulates the payment of general damages

and also payment of the loss of future earnings.

This project is just a gist about how the insurance companies settle the

claims, the procedure that is followed, the intermediaries that are involved in the

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process and so on. This project throws light on various aspects on claims

management and the problems faced by them.

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Page 6


Introduction to Insurance in India

The insurance sector in India has come to a full circle from being an open

competitive market to nationalization and back to a liberalized market again.

Tracing the developments in the Indian insurance sector reveals the 360-degree

turn witnessed over a period of almost two

centuries.

Today Insurance Companies in India have

grown manifold. The insurance sector in India has

shown immense growth potential. Even today a

giant share of Indian population nearly 80% is not

under life insurance coverage, let alone health and

non-life insurance policies. This clearly indicates

the potential for insurance companies to grow their

market in India.

In simple terms it is a contract between the

person who buys Insurance and an Insurance

company who sells the Policy. By entering into

contract the Insurance Company agrees to pay the Policy holder or his family

members a predetermined sum of money in case of any unfortunate event for a

predetermined fixed sum payable which is in normal term called Insurance

Premiums.

Insurance is basically a protection against a financial loss which can arise

on the happening of an unexpected event. Insurance companies collect

premiums to provide for this protection. By paying a very small sum of money a

person can safeguard himself and his family financially from an unfortunate

event.

Definition of Insurance:

Insurance in its basic form“A contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premiums, to pay the other party called insured a fixed amount of money on the happening of a certain event."

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Brief history of the Insurance sector

The business of life insurance in India in its existing form started in India

in the year 1818 with the establishment of the Oriental Life Insurance Company

in Calcutta.

Some of the important milestones in the life insurance business in India are:

1912: The Indian Life Assurance Companies Act enacted as the first

statute to regulate the life insurance business.

1928: The Indian Insurance Companies Act enacted to enable the

government to collect statistical information about both life and non-life

insurance businesses.

1938: Earlier legislation consolidated and amended to by the Insurance

Act with the objective of protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies taken over

by the central government and nationalized. LIC formed by an Act of

Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore

from the Government of India.

The General insurance business in India, on the other hand, can trace its

roots to the Triton Insurance Company Ltd., the first general insurance company

established in the year 1850 in Calcutta by the British.

Some of the important milestones in the general insurance business in India are:

1907: The Indian Mercantile Insurance Ltd. set up, the first company to

transact all classes of general insurance business.

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1957: General Insurance Council, a wing of the Insurance Association of

India, frames a code of conduct for ensuring fair conduct and sound

business practices.

1968: The Insurance Act amended to regulate investments and set

minimum solvency margins and the Tariff Advisory Committee set up.

1972: The General Insurance Business (Nationalization) Act, 1972

nationalized the general insurance business in India with effect from 1st

January 1973.

107 insurers amalgamated and grouped into four companies viz. the

National Insurance Company Ltd., the New India Assurance Company

Ltd., the Oriental Insurance Company Ltd. and the United India Insurance

Company Ltd. GIC incorporated as a company.

In 1993, Malhotra Committee headed by former Finance Secretary

and RBI Governor R.N. Malhotra was formed to evaluate the Indian

insurance industry and recommend its future direction. The Malhotra

committee was set up with the objective of complementing the reforms

initiated in the financial sector. The reforms were aimed at "creating a more

efficient and competitive financial system suitable for the requirements of

the economy keeping in mind the structural changes currently underway and

recognizing that insurance is an important part of the overall financial

system where it was necessary to address the need for similar reforms.

Thereafter many changes have taken place in the insurance sector.

Insurance sector in India was liberalized in March 2000 with the passage of

the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all

entry restrictions for private players and allowing foreign players to enter the

market with some limits on direct foreign ownership. There is a 26% equity

cap for foreign partners in an insurance company. There is a proposal to

increase this limit to 49%. The opening up of the insurance sector has led to

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rapid growth of the sector. Presently, there are 16 life insurance companies

and 15 non-life insurance companies in the market. The potential for growth

of insurance industry in India is immense as nearly 80% of Indian population

is without life insurance cover while health insurance and non-life insurance

continues to be well below international standards.

Furthermore, over the medium and long term, India’s insurance market

will continue to experience major changes as its operating environment

increasingly deregulates. On the one hand, a mix of new products, new

delivery systems and a greater awareness of risk will generate growth. On

the other hand, competition will remain intense as private sector insurers and

those about to enter India seek to win market share from the more

established public sector entities.

life insurance

Introduction to General InsurancePage 10


Human life is subject to risks due to natural and accidental causes. When

human life is due to accident or any natural calamity or any other uncertain

event, there is a loss of income to the household. The family is put to hardship.

Sometimes, survival itself is at stake for the dependants. Risks are

unpredictable. Life is full of uncertainty and it happens when one least expects

it. An individual can protect himself or herself against such contingencies

through General insurance.

With the help of an General insurance contract one cannot avoid the loss but

can certainly protect him self from such losses hence in general insurance, the

Sum Assured (or the amount guaranteed to be paid in the event of a loss) is by

way of a ‘benefit’ in the case of general insurance.

It is the uncertainty that is risk, which gives rise

to the necessity for some form of protection against

the financial loss arising from event. Insurance

substitutes this uncertainty by certainty. The

primary purpose of general insurance is the

protection of the insured’s property. Insurance in its

various forms protects against such misfortunes by

having the losses of the unfortunate few paid by the

contribution of the many that are exposed to the

same risk. This is the essence of insurance –the

sharing of losses and substitution of certainty for

uncertainty.

There are a variety of general insurance products to

suit to the needs of various categories of people—

Businessmen, Employees, Taxi drivers, and many more. General insurance

products could be purchased from registered insurers notified by the IRDA.

Definition of General Insurance:

General

Insurance means to

“Cover the risk of the

financial loss from any

natural calamities viz.

Flood, Fire, Earthquake,

Burglary, etc.. i.e. the

events which are

beyond the control of

the owner of the goods

for the things having

insurable interest with

the utmost good faith

by declaring the facts

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Insurers appoint insurance agents to sell their products. Public who are

interested to buy general insurance products should receive proper advice from

insurance agents/insurer so that a right product could be chosen to suit particular

financial needs.

Claims in Insurance

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An insurance claim is the actual application for benefits provided by an

insurance company. Policy holders must first file

an insurance claim before any money can be

disbursed to the hospital or repair shop or other

contracted service. The insurance company may or

may not approve the claim, based on their self

assessment of the circumstances. Individuals who

take out home, life, health, or automobile insurance

policies must maintain regular payments called

premiums to the insurers. Most of the time these

premiums are used to settle another person's insurance claim or to build up the

available assets of the insurance company.

When claims are filed, the insured has to observe the settled rules and

procedures and the insurer has also to reciprocate in a similar manner by

undertaking appropriate steps for speedy disposal of claims. It is true that claims

settlement is complex in nature, but it is the driving force to plant confidence in

the hearts of people, in general and beneficiaries in specific. Insurance claim is

a right of insured under a contract of insurance. Insurance contract is a contract

by which one party called the insurer promises to save the other party, the

insured on payment of consideration known as the premium. The insurer

promises to save the insured are nominees/assignees of the insured on

happening of event or risk insured. Disputes crop up in the payment of claim

when the insurer and the insured understand the process of claims payment in a

different way. Claims settlement is an integral part of the insurance business

which is a service industry and its growth is interwoven with the people, the

customers and consumers of service. It is inevitable for the insurance company

to protect and guard the interests of the policyholders. An insurance claim is the

Definition of claims:

Claim is a right of insured to receive the amount secured under the policy of insurance contract promised by Insurer.

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only way to officially apply for benefits under an insurance policy, but until the

insurance company has assessed the situation it will remain only a claim, not a

pay-out.

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Claims Management

Many insurers have recognized the need to improve the efficiency of their

claims management process. They have streamlined processes, eliminated

paper-based forms and redistributed work to match the demands to skills. The

objective of their efforts is to lower costs, while also increasing overall

throughput. Efficiency improvements make tasks quicker and less costly to

execute. However, to realize even greater improvements in the claims handling

process, insurers must also focus on the effectiveness of their claims decisions.

Claims handling costs typically represent 10% to 15% of net earned

premium; in contrast, claims payouts represent 40% to 65%. Insurers that

expand their focus to include effective as well as efficient claims processing

will find a far larger pool of savings opportunities. Technology can play a

significant role by providing integrated channels for communication and

collaboration. This would help the insurance company increase employee

productivity by reducing cycle time and defect rate and also increase employee

participation and compliance.

Claims Processing sometimes involves collating and sharing large

amounts of information among multiple parties involved in a claim, from body

shops to adjusters to investigators to lawyers and doctors to claimants and

regulators. And it involves the knowledge of experienced adjusters to determine

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the fair and appropriate outcome of a claim. In fact, losses and loss expenses

absorb 80% of premium collected by carriers.

Service representatives and claims adjusters need to access data from

multiple sources when processing or assessing a claim, which delays settlement

time and increases costs. Manual steps reduce transparency of the claims

process and raise the risk of fraud, manipulation or simply human error.

Customer retention is also a challenge – experts say that 75 percent of

customers leave their insurer due to claims issues.

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System of claims management

Basis of claims management:

Claims management means and includes all the managerial decisions and

processes concerning the settlement and payment of claims in accordance with

the terms of insurance contract. It includes carrying out the entire claims

process with a particular emphasis on monitoring and lowering the claims costs.

The important elements of claims management are claims preparation, claims

philosophy, claims processing and claims settlement.

The claims philosophy is defined as procedure or specified approach to

settle the claims. It contains the claims management principles and also claims

handling methods and procedures. The claims philosophy includes the

preparation of guidelines regarding the receipt of claims from the insurers or

claimants, analysis of the claims, consideration of the possible decision on the

particular issues and disputes, evaluating the impact of the claims cost and

expenses, relation of claims to the consumer satisfaction, monitoring the claim

payment and improving the efficiency of the claims settlement and payment

systems and avoiding unnecessary disputes of claims.

The claims process includes the basic claims procedure and handling of

claims. The handling of claims includes the monitoring of situation or events,

which cause the loss to the insured subject matter and give a cause to the

insured to make a claim. The claims process contains two fold procedures to be

followed by the insurer and insured. From the point of view of the insured, it

includes the suffering of loss or the damage, understanding and identifying the

cause of action, information or giving notice of claim or loss to the insurer,

providing sufficient proof of loss to the insurer or his agent or the loss assessor

and surveyors. The insurer, on the receipt of the claim from the insured, has to

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take certain immediate precautions such as verifying the claims, reviewing the

claim application, respond to the claimant, and carry out claims investigation,

claims negotiation, claim settlement and claim payment.

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Stages in claims system:

The claims handling is the integrated part of the claims management and

executes the decisions made by the claims management machinery of an

insurance company. Though claims management and claims handling are

generally the same externally, they are different in nature.

Claims management:

Claims management is a managerial function in which the insurer has

a definite role to play in analysis of data, processing of application, decision-

making, budget planning, and business control and fund management. It is a

subjective concept. In claims management, the attention is on making

principles and guidelines for smooth and profitable settlement of claims in

the hands of the insurer.

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Claims management includes the entire process of claims handling

and claims payment. This includes review of the claims performance,

monitoring of claims expenses’, legal costs, settlement costs, compromises

and planning for future payments and avoiding the delay and disputes in

payment of claims. It is a control system that has an important place in the

claims management. It also includes risk management techniques, loss

assessment, and business forecasting and planning.

Claims handling:

Claims handling is the procedural way of processing a claims

application. Claims handling involves utilization of the laid down principles

as yardsticks and the measuring methods in settling the issues before it

occurs. Claims handling is a traditional form of managing the claims

settlements. It includes handling of various stages of the insurance claims. It

is functional in nature such as claims review, investigation and

understanding the negotiating process. It does not include any managerial

outlook such as risk management, policy making and decision making.

Thus, it is concerned with the procedural methods and also

interpretations of the claims philosophy. Claims handling may change from

case to case depending on the merits of the claim, but it will not drastically

change every moment. It is a flexible as well as a rigid way of handling the

issues having interest of the insurer in mind. It is a systematic way of

receiving the claims and following other procedures required for quicker and

efficient payment of the claims. Every insurer has a standardized way of

claims handling which will improve quality and customer service. The

insurer’s commitment to the service of the customer is a part of the claims

management.

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Management Structure of GIC

Mr. Tarun Bajaj Mr. M. V. Nair

Mr. S.B. MathurMr. S.L.Mohan

Ms. Bhagyam Ramani Mr. G. Srinivasan

From left to Right are the Members and Managing directors of GIC

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Basic structure of GIC

8 Zonal officesBhopal,Chennai, Hyderabad,Kanpur, Kolkata, Mumbai, New Delhi, Patna105 DIVISIONAL OFFICES2048 BRANCH OFFICESSATELLITE OFFICESFOREIGN OFFICESUnited Kingdom,Mauritius, FijiPage 22


Today, most of functions, nearly 90%, related to the marketing and other

related activities of the insurance consumers are dealt and handled at the branch

level. The branch office, depending upon its business, is headed by a manager

and each function of insurance business like marketing, underwriting of

policies, accounts, claims payments, staff and administration matters are

identified as departments of the branch office with responsible officials such as

Administration and Accounts Officers.

The managerial decisions are based on the information supplied by the

administration and accounts officers, the functional head at root level. All the

functions of claims will be settled at the branch level. The administration and

accounts officers of life insurance business will deal with maturity and death

claims. If the branch is smaller, all the types of claims will be dealt by one

administration and accounts officers and if the branch is bigger with good

number of claims, they will be settled by, separate officials. At branch level,

these officials have to maintain cordial relations and establish a system of

sharing information with the other departments, relating to the policy

documents, payment of premium and using the staff or the agents for the

settlement of claims disputes. The branches maintain records relating to the

claims payment and claims rejections. They will submit the reports to the Zonal

Officer, who in turn will forward it to the Head Office or Corporate Office.

The branches report to their respective divisional office. If any branch

gets a claim and there is a problem in identifying the correct claimant among the

claimants, or otherwise, a dispute of risk crops up, which will be forwarded to

the divisional office with its comments. The divisional office after receiving the

papers, verifies them, applies legal knowledge and skills, or seeks advice from

skilled persons and tries to solve the problems. The divisional office is

responsible to settle the claims referred by the branch office and also report the

same to the zonal office, which in turn will consolidate the data and submit the

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same as required by the statute or otherwise under any law to the government.

The government will put the same for the approval of the both the houses.

At the division office level, the claims department generally deals with

the claims, which are pending with the branches because of some disputes, or

some claims which are of high value. The investment portfolio and

establishment and maintenance of reserves for the purpose of claims payment or

otherwise required under the law is the important function of the central office.

Thus the organizational structure of the insurance business is most flexible and

decided, based on the above said factors.

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Claims Management Department

The claims department is one of the key departments in an insurance

company. The claims department has the following functions to perform:

To provide the customers of insurance and reinsurance companies with

high quality of service. This role gives a long-term edge to the company

and hence is referred to as the strategic role.

To monitor the claims and see that whether the benefits of insurance

exceed the costs of claims. This role is referred to as the cost-monitoring

role of the claims department.

To see that the expectations of the customers are met with regard to

speed, manner and efficiency of the service. This is called the customer

service role of the claims department.

To meet the standard of service, to keep up to the customers expectations

and still operate within the budget. This is the managerial role of the

claims department.

Both the quality of the service and cost of claims is the responsibility of the

claims department. The department has to look after the proper mix of the two.

The cost of claims must not exceed a given level in trying to render a very good

service to the customer. So the claims department should work with due

diligence to balance the two parameters. The estimation of future liabilities is

just as important as control over the claim payments. As the claims department

is in direct touch with the customer, it has to ensure the quality of service.

The claims department has the sole responsibility of managing claims.

Claims management by far is the most complex issue in an insurance company.

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The people in the claim department should have good interpersonal skills. If

they are not able to irk in harmony the customers will not receive quality

service. There should be sufficient number of people as managers so as to

simplify job and proper human resource systems in place so that such persons

are recruited whose philosophy goes with the mission and vision of the

organization. It has become imperative for the claims department to provide

quality service to the customers so that the corporate goals are achieved. The

claims department, in effect, acts as an interface between the customer service

quality and insurance company’s objectives. It has to be given the proper weight

age and motivation so that the business as a whole functions well.

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Claims Settlement Procedure in General Insurance Companies Registration Certificate of GIC as per IRDA guidelines

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Claims Settlement Procedure in General Insurance Companies Certificate Renewal of Registration GIC as per IRDA guidelines

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Guidelines for claims settlement by

IRDA

Proposal for insurance:

1) Except in cases of a marine insurance cover, where current market

practices do not insist on a written proposal form, in all cases, a proposal

for grant of a cover, either for life business or for general business, must

be evidenced by a written document. It is the duty of an insurer to furnish

to the insured fees of charge, within 30 days of the acceptance of a

proposal, a copy of the proposal form.

2) Forms and documents used in the grant of cover may, depending upon the

circumstances of each case, be made available in languages recognized

under the Constitution of India.

3) In filling the form of proposal, the prospect is to be guided by the

provisions of the Act. Any proposal form seeking information for grant of

any cover may prominently state therein the requirements of the Act.

4) Where a proposal form is not used, the insurer shall record the

information obtained orally or in writing, and confirm it within a period

of 15 days thereof with the proposer and incorporate the information in its

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cover note or policy. The onus of proof shall rest with the insurer in

respect of any information not so recorded, where the insurer claims that

the proposer suppressed any material information or provided misleading

or false information on any matter material to the grant of a cover.

5) Wherever the benefit of nomination is available to the proposer, in terms

of the Act or the conditions of policy, the insurer shall draw the attention

of the proposer to it and encourage the prospect to avail the facility.

6) Proposals shall be processed by the insurer with speed and efficiency and

all decisions thereof shall be communicated by it in writing within a

reasonable period not exceeding 15 days from receipt of proposals by the

insurer.

Matters to be stated in life insurance policy:

1. While acting under regulation 6(1) in forwarding the policy to the insured,

the insurer shall inform by the letter forwarding the policy that he has a

period of 15 days from the date of receipt of the policy document to review

the terms and conditions of the policy and where the insured disagrees to any

of those terms or conditions, he has the option to return the policy stating the

reasons for his objection, when he shall be entitled to a refund of the

premium paid, subject only to a deduction of a proportionate risk premium

for the period on cover and the expenses incurred by the insurer on medical

examination of the proposer and

stamp duty charges.

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2. In respect of a unit linked policy, in addition to the deductions under sub-

regulation (2) of this regulation, the insurer shall also be entitled to

repurchase the unit at the price of the units on the date of cancellation.

3. In respect of a cover, where premium charged is dependent on age, the

insurer shall ensure that the age is admitted as far as possible before issuance

of the policy document. In case where age has not been admitted by the time

the policy is issued, the insurer shall make efforts to obtain proof of age and

admit the same as soon as possible.

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Claims procedure in respect of a General life insurance policy:

1) A General life insurance policy shall state the primary documents which

are normally required to be submitted by a claimant in support of a claim.

2) A General life insurance company, upon receiving a claim, shall process

the claim without delay. Any queries or requirement of additional

documents, to the extent possible, shall be raised all at once and not in a

piece-meal manner, within a period of 15 days of the receipt of the claim.

3) A claim under a General life policy shall be paid or be disputed giving all

the relevant reasons, within 30 days from the date of receipt of all

relevant papers and clarifications required. However, where the

circumstances of a claim warrant an investigation in the opinion of the

insurance company, it shall initiate and complete such investigation at the

earliest. Where in the opinion of the insurance company the

circumstances of a claim warrant an investigation, it shall initiate and

complete such investigation at the earliest, in any case not later than 6

months from the time of lodging the claim.

4) Subject to the provisions of section 47 of the Act, where a claim is ready

for payment but the payment cannot be made due to any reasons of a

proper identification of the payee, the life insurer shall hold the amount

for the benefit of the payee and such an amount shall earn interest at the

rate applicable to a savings bank account with a scheduled bank (effective

from 30 days following the submission of all papers and information).

5) Where there is a delay on the part of the insurer in processing a claim for

a reason other than the one covered by sub-regulation (4), the life

insurance company shall pay interest on the claim amount at a rate which

is 2% above the bank rate prevalent at the beginning of the financial year

in which the claim is reviewed by it.

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Procedure for settlement of claims

Settlement of maturity claims:

Under GIC, claims can arise on maturity of policy of the policyholder.

The processing of claims by maturity is normally undertaken by Divisional

Office of GIC about two months before the date of maturity. . The GIC sends

intimation before the maturity date. If the notice of maturity is not received and

the date of maturity is known to the policyholder, then the policyholder can take

the necessary steps to get the due Maturity amount. The Corporation sends

Maturity Intimation along with the discharge forms to the policyholder

informing him about the requirements for the settlement of claim.

1) In case the maturity intimation is not received by the policyholder till

around 2 months before the date on which the policy matures, he should

contact the concerned Divisional Office and obtain a copy of the maturity

intimation.

2) Policy Document (if not in the custody of GIC as security for loan):

On receipt of the maturity intimation, the policyholder should send

the original policy document along with the last receipt of insurance

premium paid. The policy document needs to be submitted in original

unless it is in custody of GIC as security for loan.

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3) Age proof document (if age has not been admitted earlier):

The policyholder should also submit his age proof to the

Corporation in case it has not already been submitted. In case, the

policyholder has already submitted his age proof to GIC, the form of

Discharge (Form No. 3825) to be executed by the policyholder, is also

sent along with the Maturity Intimation.

4) G.I.C. accepts following documents as valid age proofs:

a. Horoscope of the assured

b. Certificate relating to the baptism ceremony among Christians

c. Birth certificate from the Municipal Corporation

d. High School Certificate

e. Service book.

5) Discharge Form No. 3825 duly stamped & signed, attested by a witness:

The form of Discharge (Form 3825) should then be properly filled,

signed and sent to the Office of GIC from which it was issued. The

signature must be on a revenue stamp and must be attested by a witness.

6) Assignment / Reassignment Deed, if any:

In case the policy or any Deed of Assignment or Re-assignment is

lost by the policyholder, he has to submit an indemnity bond along with a

reliable surety of sound financial standing acceptable to GIC. The

indemnity bond has to be in a particular format (Form 3815). In such a

case the claim is settled in the absence of the policy document.

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7) Existence certificates in case of children’s Deferred Assurance & Pure

Endowment Policies.

8) In due course, GIC sends a cheque to the policyholder for the money due

to him as per the terms of the policy.

GIC upon the receipt of the claim form will act in the following manner:

GIC will send an acknowledgement to the effect that the claim form has

been received and the aforesaid document will also state that the insurer

is in the process of checking all the necessary items and will get back to

the claimant shortly.

Then the insurer will ask for necessary documents that are required for

settlement of claims. The claimant has to provide all the necessary

documents that are being asked by the insurer.

After verification, the insurer arrives at the final amount that has to be

paid to the claimant and then prepares a cheque or such mode of payment

as has been agreed upon in the policy or between the claimant and the

insured.

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IMPORTANT TERMS IN CLAIMS

Maturity claims

Beneficiaries in claims:

The claimant in life insurance policies at the time of payment of maturity claims

of life insurance policies can be the policyholder or the assignee to whom the

holder of the policy has transferred the policy. The persons entitled to claim

under these policies can be:

The assured himself.

The payee, whose name appears in the benefit schedule of the policy as a

party interested.

The creditor who has been properly assigned and nominated to receive

the payment under the policy.

Amount payable:

The amount payable upon the maturity of the policy, i.e., non-happening of the

event is the sum assured plus profits and bonus that accrues with the policy. The

profits are paid on pro-rata basis, i.e., in the proportion of the premium paid and

declared are bonuses. The payment of profits is a condition inserted as a clause

in the policy itself and it becomes an obligation on the insurer to pay the amount

of such profit as may be accrued to the insured.

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Dispute in payment of maturity claims:

The disputes arising in such cases are general and may be restricted to the proof

of age, if the age is not admitted at the time of issuing the policy document and

about the good title of the claimant on the policy. Incase of the insurer

shrugging off his liability to make the payment of profits which are accrued to

the insured upon maturity and in case the payment of profit is as per the

contract, the insurer has every right to move to the court and to claim for such

payment. The policy document and scheme of the policy contains the details of

the payment and the payment made accordingly may not drag the parties into

litigations.

Amount payable:

Amounts that can be paid under a life insurance policy are as follows:

The amount insured or the face value of the policy

Bonus if declared by the company, which is recoverable as an insurance

amount.

The share of profits in case of participation policy.

Surrender value, where the policy lapses due to non-payment of the

premium or where the assured surrenders the policy, the insurance

company may pay a percentage of the premium paid according to the

rules of the company.

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Factors affecting the claims settlementThe factors that affect the claims settlement are as follows:

The policy should be in force on the date of the event.

The risk and cause of event should be covered by the policy.

The cause of loss or the event should be directly related to the loss. A

remote cause has no place in the settlement.

The loss should not have been caused with an intention to gain from the

situation.

The preconditions or warranties have to be compiled with. When

conditions to be fulfilled before affecting the cover of the policy, are not

performed, the cover of insurance will not come into effect even though

the premium is paid and accepted by the insurance company.

Presence of insurable interest, in case of the property insurances, at least

at the time of happening of event or loss sufferings. Without having the

insurable interest in the subject matter, no person can get benefit or

compensation.

The assured should suffer loss, actual or constructive, to get

compensation. The assured should riot make benefits or gains out of the

insurance contract as the insurance contract is of indemnity in nature. It

only makes good the loss suffered by the assured and is not a source of

gains.

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Sufficient documentary evidence of loss should be presented along with

the application form.

Multiple claims and reciprocal claims will be settled as per the terms of

the contract of insurance.

Right to appeal or file a petition with the tribunal or the courts cannot be

withdrawn. If the terms of the policy insist upon arbitration, it is not the

end of justice for the insurer or the assured.

The insured may opt for the following alternatives while settling the claims:

Pay the claims as reported by the surveyor or the claims made by the

insurer whichever is less.

Take help of the agent or some other persons and compromise or to come

to an agreement with the assured in case of a disputed claim.

If the claim is rejected there may be litigation on the insurer. The

litigation will cost the insurer more, as the insurer has to pay the interest

for the amount due if he loses the litigation.

Pay ex-gratia, if the claim is totally baseless and non-acceptable, on

humanitarian grounds and to avoid complications in future.

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Arrange to replace the asset either by repairing the same or by purchasing

a similar asset from the market.

Repair the asset to provide the similar type of services as provided before

the happening of event.

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Delay in claims settlement

The time value for the settlement of a claim is of importance. All claim

papers have to be submitted within a limited period mentioned in the policy

document or otherwise stated in the Act.

The time element is very important in the claims payment for the following

reasons:

The delay in the claims settlement will have an adverse impact on the

goodwill and marketing of the insurance.

The cost of claims will increase with the extension of time.

The insurer may be asked to pay the interest on the unpaid insurance

amount because of the delay. The court may direct the insurer to pay the

costs of the case to the assured, which results in mounting up of costs.

The delay in payment may lead to litigation which is expensive.

Unproductive use of manpower to defend, expenses incurred and waste of

time on litigations will be an extra burden on the insurer.

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Litigations will affect on the productive areas of the business particularly

in the marketing of the insurance business.

The delay also leads to the increasing number of cases with consumer

protection councils.

Thus the delay in the settlement of the claims will have an impact on the present

and future business of the insurance along with the cost burden. As such it is

essential to have quicker claim settlements.

The delay in claims settlement may be due to the following reasons:

Late submission of claim form: The claim forms may be submitted late

because of the ignorance or lack of knowledge of the existence of the

insurance policies against the lives of the persons who face the event or

no information is given to the beneficiaries or no nominations are made to

the policy.

Innocence and illiteracy of the assured: The assured or the claimant may

fail to file the papers due to lack of knowledge, to file the insurance

claims within a certain period or of the claims procedure.

Not submitting the claims forms in full: If the claim forms are not

properly filled, they will fail to provide the required information to settle

the claims and as a result the claim settlement will be delayed for want of

information.

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If sufficient proof or supporting documents are not submitted along with the

claim form to facilitate claim assessor to know the date of the event or the cause

of the event, claim settlement may be delayed.

The insurer may not get the cooperation of the insured or the claimant to

finalize the claim or arrive at some compromise.

Destroying the evidences, with or without intention, that could have

otherwise facilitated the estimation of the loss payable under the claim.

Not providing information about the changes in the constitution of the

organization or the changed address of the insured or the claimant or any

other information required to make a claim settlement.

The delay on the part of the insurer may be intentional or due to the

pressure of work.

Lack of motivation, lack of knowledge of importance of the claims

settlement, lack of awareness among the staff of the organizations or

defective supervision or organizational structure.

The delay in submission of claims or settlements can be avoided by making

the assured aware of the facts and importance of the insurance and procedure of

claims. The insurers can take the help of the agent or local staff to arrive at a

compromise with the claimants when the cases are of complex nature. The

organization should be so designed to avoid holding of papers at one or two

places. The staff should be trained and the importance of the claims

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management should be driven into their minds. Use of latest technology to

assess the losses and recruitment of able staff will speed up claims settlement.

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Role of agents in claims settlement

An agent is a primary source for procurement of insurance business and

as such his role is the corner stone for building a solid edifice of any life

insurance organization. To effect a good quality of life insurance sale, an agent

must be equipped with technical aspects of insurance knowledge, he must

possess analytical ability to analyze human needs, he must be abreast with up to

date knowledge of merits or demerits of other instruments of investment

available in the financial market, he must be endowed with a burning desire of

social service and over and above all this, he must possess and develop an

undeterred determination to succeed as a GIC Salesman. In short he must be an

agent with professional approach in life insurance salesmanship. Such an

agency force is expected to be helpful not only in proper field underwriting but

also after sales servicing. The Concomitant and essential elements for higher

retention of business.

The insurance company, being a corporate structure, does not deal

directly with the customers to promote the insurance business. It avails the help

of middlemen to undertake the promotion such on its behalf and the agents are

middlemen or intermediaries. Section 40 of Insurance Act 1938 authorizes the

payment of the remuneration to the agents for the services. Section 42 of the

Act enumerates the essential qualifications for their appointment and issuing of

licenses. The appointment of agents to procure policies of insurance is a general

practice among insurance companies all over the world. The agents are allowed

to market the insurance business but not allowed to issue the policies. The agent

has no right to conclude the insurance contract and the final approval or

rejection of contract proposal is vested with the insurer, the principal. But, in

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promoting the insurance business, the agent binds the principal to all activities

such as receipt of premium, enquiries and publishing of information of the

insurance contracts and products.

The agent is bound by duty and responsibility to convey the message to

the insurer. But, giving the information to the agent does not bind the insurer as

the agent is appointed only to promote the insurance business. In times of

disputes, the agent is under an obligation to settle the issue of claims by way of

negotiations and mediations to retain the customer.

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Role of agents in an Insurance

Company

1. Full information must be provided to the proponent at the point of sale to

enable him to decide on the best cover or plan to minimize instances of

cooling off by the proponents.

2. An agent should be well versed in all the plans, the selling points and also

be equipped to assess the needs of the clients.

3. Adherence to the prescribed Code of Conduct for agents is of crucial

importance. Agents must, therefore, familiarize themselves with

provisions of the Code of Conduct.

4. Agents must provide the office with the accurate information about the

prospect for a fair assessment of the risk involved. The agents

confidential report must, therefore, be completed very carefully.

5. Agents must also possess adequate knowledge of policy servicing and

claim settlement procedures so that the policyholders can be guided

correctly.

6. Submission of proposal forms and proposal deposit to the branch office

immediately to avoid delays and to enable the office to take timely

decisions.

7. A leaflet or brochure containing relevant features of the plan that is being

sold should be available with the agents.

If the agents are well conversant with the claim settlement procedure and

assist the claimants in completing the necessary requirements, it would not only

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quicken the process of claim settlement and enhance their professional status

but also help the organization to improve upon their outstanding claim ratio.

This, while further boosting the image of the organization may provide them an

overflowing fountain for further business in those families. The performance of

agents will now depend on not how many hours he works but the quality of

service, his attitude to customers and the image that he will create for the entire

life insurance business. Thus the agent under the changing economic scenario

can achieve their objectives by practicing psycho-marketing strategies. Their

objectives are survival and growth. Maximization of business is an end to

achieve these objectives.

Page 48


Role of surveyors and assessor in

claims settlement

Insurance users pay their premiums, year after year, trusting their policies to

protect their lives or businesses in the event of a loss. However, there are

innumerable instances where a genuine insurance user with a genuine loss and a

seemingly valid claim, has been denied his claim amount – in full or part. This

happens because the insurance company is not able to estimate the total amount

of the claims. In GIC claims the insurance company tries to reject the claims

without knowing the cause

Surveyors and Loss Assessors have been around for decades - we have all heard

of them and some of us have had occasion to use their services – but it is quite

surprising how little is actually known and understood about them – their job,

their duties & responsibilities, their role vis-à-vis insurers and insureds, and the

insured’s rights and duties vis-à-vis surveyors and assessors. This is because

they never come in the lime light but the main work of assessment and survey

of loss is done by them.

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Duties and responsibilities of surveyors and loss assessors:A surveyor and loss assessor shall, for a major part of the working time,

investigate, manage, quantify, validate and deal with losses (whether insured or

not) arising from any contingency, and report thereon, and carry out the work

with competence, objectivity and professional integrity by strictly adhering to

the code of conduct expected of such surveyor and loss assessor.

The following are their duties:

i. Declaring whether he has any interest in the subject-matter in question or

whether it pertains to any of his relatives, business partners or through

material shareholding.

ii. Maintaining confidentiality and neutrality without jeopardizing the

liability of the insurer and claim of the insured;

iii. Examining, inquiring, investigating, verifying and checking upon the

causes and the circumstances of the loss in question including extent of

loss, nature of ownership and insurable interest;

iv. Conducting spot and final surveys, as and when necessary and comment

upon franchise, excess/under insurance and any other related matter;

v. Surveying and assessing the loss on behalf of insurer or insured;

vi. Assessing liability under the contract of insurance;

vii. Pointing out discrepancy, if any, in the policy wordings;

viii. Satisfying queries of the insured/insurer and of persons connected thereto

in respect of the claim/loss;

ix. Giving reasons for repudiation of claim, in case the claim is not covered

by policy terms and conditions;

x. Taking expert opinion, wherever required;

xi. A surveyor or loss assessor shall submit his report to the insurer as

expeditiously as possible, but not later than 30 days of his appointment.

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Provided that in exceptional cases, the afore-mentioned period can be

extended with the consent of the insured and the insurer.

Surveyors and Loss assessors Report:

The report of surveyors and loss assessors will be the authentic report.

The report contains the investigations and results of the investigations,

recommendation and assessments of the surveyor and assessor. The surveyors

will state the causes of the loss whether remote or direct, the extent of actual

total loss, insurance policy amount, value of salvage and assessment of payment

of claims. The report of the loss assessors will be a solid ground to settle the

claims. If the insurer is of the opinion that the loss assessor or the surveyor has

acted under some personal interests then the insurer may decide to re-

investigate the matter and on receiving the report can decide the claims

payment.

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Impact of claims on underwriting

Insurance underwriting is the process of classification, rating, and

selection of risks. In simpler terms, it's a risk selection process. It is the process

of selecting and classifying exposures. Underwriting is one of the aspects of

insurance that makes most people’s eyes glaze over. But underwriting is one of

the most important parts of the insurance process. And knowing what an

underwriter does — and why it’s so important — is helpful for people who are

shopping for a new policy. Claims settlement has a direct impact upon

underwriting. If the claims of certain insurance products are frequently received

they have an impact upon the claims reserves and warrant review of the product

and take decision either to modify the terms or continue.

Addition or deletion of the clauses, changing the time span of the

insurance product or other changed, are discussed upon frequency of claims and

quantum of amount paid. Thus the underwriter fixes the premium of the product

considering various factors such as cost of risk, administration expenses,

brokerage or marketing expenditure, claims settlement expenses and budgeted

profit. The premium is the present value of the future risk. The underwriting

department and claims management are related in sharing the information of the

claim to find out the current weaknesses, strengths and the possible

improvements.

Insurance is based on risk. When you get an insurance policy, the

insurance company is taking on some of your risk. The underwriter's job is to

use all the information gathered from numerous sources to determine whether or

Page 52


not to accept a particular applicant. Individuals applying for individually-owned

life and health insurance typically receive more underwriting scrutiny than

members holding a group policy. An underwriter’s job is to make sure that the

insurance charges just the right amount for the coverage it provides. They figure

how much risk is represented, how much coverage the company can offer, and

how much that coverage should cost. The underwriter's primary function is to

protect the insurance company insofar as is possible against adverse selection

(very poor risks) and those parties who may have fraudulent intent.

The underwriter has a number of resources that can be called upon to provide

the necessary information for the risk selection process. These sources include:

The policy application;

Medical history and examinations;

Inspection reports;

The Medical Information Bureau (MIB); and

The producer or insurance agent.

General insurance companies each have their own extensive policy and

procedure manuals they are supposed to follow in determining whether or not to

issue an Individual insurance policy, and in pricing that policy. The insurer's

underwriters typically use a combination of factors that experience shows

equates with the risk of accident (and natural calamities if any).

They include the applicant's answers to a series of questions such as:

(1) Age, sex (except in several states that require "uni-sex" rates,

(2) Height, weight, and previous history (and often family health history --

parents and siblings and soundness of the person),

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(3) The purpose of the insurance

(4) Marital status and number of children,

(5) The amount of insurance the applicant already has, and any additional

insurance s/he proposes to buy

(6) Occupation (some are hazardous, and increase the risk of death), and income

(to help determine suitability),

(7) Smoking or tobacco use (, as smokers have shorter lives),

(8) Alcohol (excessive drinking seriously hurts life expectancy),

Thus the claims payment and information relating to the claims

settlement will be directly helpful to the underwriting departments either to

modify the present product or to consider the information for the future.

Page 54


Frauds in claims settlement

Insurance fraud is any deliberate deception/dishonesty committed

against or by an insurance company, insurance agent, or consumer for

unjustified financial gain. It occurs and may be committed at different points in

the transaction by different parties such as policy owners, third-party claimants,

intermediaries and professionals who provide services to claimants. The nature

of these frauds may vary from an inflated/exaggerated value of a legitimate

claim to a completely fabricated or bogus claim where losses never really

occurred. Promises made with no intention to perform them can be treated as a

fraud.

The essential components of an insurance fraud are:-

Intent to deceive

Desire to induce insurance company to pay more than it otherwise would.

The fraudulent claims may be of two categories:

The cause or the claim itself is fraudulent

The claim may be genuine but the method of calculation or the evidences,

or the information submitted may be fraudulent in nature.

As such any fraud made by the insured or the insurer in concluding the

insurance contract or the claims settlement, makes the entire contract violable at

Page 55


the option of the person on whom the fraud is played. Creating forged

documents such as wills, legal heir certificates, assignments of the policies and

other papers to support their claim, deliberate destruction of the insured subject

with an intention to get the policy amount all constitute different types of

frauds. Sometimes the frauds may also result from gross negligence or

forbearance to use reasonable exertions and means at hand. The fraudulent

claim by the assured will deprive him the right to claim as the insurer has the

right to reject it.

Examples of insurance fraud:

1) Creating a fraudulent claim

2) Overstating amount of loss

3) Misrepresenting facts to receive payment

4) Bogus agents/Sale of forged cover notes

How to protect yourself from a fraud:

1. Be wary of unregistered insurance agents. Before purchasing insurance,

contact your insurance company to ensure the agent is an authorized

agent.

2. Avoid paying premiums in cash. Opt to pay for premiums by cheque or

money order. Made payable to the insurance company instead of the

agent.

3. Make sure you receive a written policy after payment of your first

premium.

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4. Immediately examine your insurance policy to ensure the coverage is

what you have requested for and ensure that the premium amount paid is

reflected in the cover note/policy. Request for a receipt as evidence of

payment of premium.

5. Do not sign a blank insurance application, or insurance claim form.

6. Be suspicious if the price of insurance seems suspiciously low from other

insurance companies.

7. If you meet with an accident, be careful of strangers who offer you quick

cash or urge you to deal with specific workshops, medical clinic or law

firm. They could be part of a fraud syndicate.

8. Insist on detailed bills for repairs and medical services rendered and

check for accuracy.

9. Discreetly contact your insurance company or the police if you are being

defrauded or have been/are being persuaded to take part in a fraud.

Provide as many details as possible about the incident - name of the

individual(s) involved, amount, date(s), and type of fraud.

Claims settlement

Page 57


Claims settled during the year

Maturity

Year Number Amount

2007-08 134.22 31,873.35

2006-07 129.29 32,101.92

2005-06 115.58 24,724.58

Current data of GICre

outflow 2008-09 2007-08

Payments to

poliyholders

Rs in crores

Claims by maturity

Numbers(in lakhs) 144.22 132.29

Amount 41,955.18 35,093.90

Claims by Accident

Numbers(in lakhs) 9.73 6.02

Amount 7,250.40 4,443.32

Some performance highlights (as at 31/03/2007) :

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1. Total Income : Rs. 1,76,559.28 crores

2. Total Premium Income : Rs. 1,12,307.77 crores

3. Total life fund : Rs. 5,72,602.80 crores

4. Total Assets : Rs. 6,74,514.78 crores

5. Total Investment : Rs. 6,12,705 crores

6. Investment in

Infrastructure

: Rs. 71,017 crores

7. Policies in force

(31/03/2006)

: 21.79 crores

Survey ResultsI. Do you feel the necessity of having general insurance covers:-

Page 59


o Yes

o NO

Yes (60%)

No (40%)

Necessity of General Insurance Companies

YesNo

If yes, then which company will you prefer:-

o ICICI Lombard

o TATA AIG

o IFFCO TOKIO

o Others

Page 60


ICICI LOMBARD

TATA AIG IFCO TOKYO MAX BUPA APOLLO MUNICH

0

10

20

30

40

50

60

No.of Respondants

No.of Respondants

As from the above chart it is very clear the all of the respondents have an insurance of the ICICI LOMBARD and few more companies etc.

The reason behind this is the growing popularity of ICICI LOMBARD, its brand name and good repo with its customers

Page 61


II. How many general insurance are you having:-

o 1

o 2-4

o > 4

70%

20%

10%

No. of General Insurance Policy

OneTwo More than 4

From the above pie diagram we come to know that people who have

awareness about insurance policy insure themselves just for name sake (70%)

people have insured themselves for name sake while other 30% have insured to

protect them from uncertainties by using combination of many insurance policies.

This included many shop owners and business houses while 70% of insured

included working people insured against theft and fire insurance.

Page 62


III. Are you aware about the schemes offered by General Insurance Companies?

o Somewhat aware

o About all

o Not aware

Some what aware About all No Idea0%

10%

20%

30%

40%

50%

60%

50%

40%

10%

Schemes offered by General Insurance Companies

Schemes offered by General In-surance Companies

From the above chart we come to know that many people (50%) are not yet fully aware about insurance companies, While 10% included people who didn’t knew what the main purpose of insurance is.

Page 63


IV. Do you feel that General Insurance Companies offers customer centric

product:-

o Highly Agree

o Agree

o Neither Agree nor Disagree

o Disagree

o Highly Disagree

Highly Agree Agree Neutral Disagree Highly Disagree

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

10%

40%

30%

19%

1%

General Insurance Company's Products

General Insurance Company's Products

From the above chart we come to know that many people agree with the products of General Insurance Companies are useful and only 1% people disagree saying insurance company’s main motto is to “loot people”

Page 64


V. The service provided by General insurance companies are :

o Excellent

o Very Good

o Good

o Moderate

o Poor

o Very poor

Excellent Very good Moderate Poor Very poor0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

10%

40%

30%

20%

10%

Service offered by General Insurance Companies

Service offered by General In-surance Companies

From the above chart we come to know that General insurance company has improved it service and has earned a good name for it but only 10 % people say that all the service is very poor

Page 65


VI. You came to know about General Insurance Companies from :-

o Ads( print/ digital)

o Insurance Agents

o Friends and agents

o Others

Ads (Print/ Digi-tal)

Insurance agents

Friends and Agents

Others0%

10%

20%

30%

40%

50%

60%

50%

40%

5% 5%

Awareness about General Insurance Companies

Awareness about General In-surance Companies

The means of communicating with the people is media and from the above chart General insurance companies are successful in reaching the minds of the customers. The popularity of General Insurance Companies is increased through Word of Mouth strategy used by agents.

Page 66


VII. What is your opinion about the yearly premium? Is it :-

o Very High

o High

o Reasonable

o Low

o Very Low

The Above question’s answer is unavailable since all the people had same

opinion and due to the same opinion of the respondents graphical representation

is not possible (Answer opted by respondents were reasonable)

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VIII. What is your satisfaction level towards the policy taken? You are:-

o Highly Satisfied

o Satisfied

o Neither Satisfied nor Dissatisfied

o Dissatisfied

o Highly Dissatisfied

Highly Satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied0%

5%

10%

15%

20%

25%

30%

35%

40%

10%

15%

30%

35%

10%

Satisfaction level

Satisfaction level

From the above charts we come to know that 45% of people are dissatisfied

with General insurance companies

Page 68


IX. Have you taken the policy from an insurance agent?

o Yes

o No

80%

20%

Insurance policy from an Agent

YesNo

The pie diagram represents that people buy policy from respective policy agents.

Page 69


X. Which factor influence you the most in choosing an insurance company:-

o Reputation

o Service

o Accessibility

o Good scheme

o Low premium

o Experience of others

o Claim settlement

Reputati

onSer

vice

Accessi

bility

Low premium

Experi

ence

of others

Claim se

ttlemen

t0%

5%

10%

15%

20%

25%

30%

20% 20%

10%

20%

5%

25%

Factors Influencing People in Choosing an In-surance company

Factors Influencing People in Choosing an Insurance company

From the above diagram we come to know 25 % people select a company based on the claim settlement policy. While average no. of people select the company based on its premium, reputation, service.

Page 70


XI. Which type of general insurance cover do you prefer the most:-

o Auto/Car Insurance

o Travel Insurance

o Shopkeeper’s Insurance

o Health Insurance

o Accidental Insurance

Car / A

uto Insuran

ce

Trave

l Insuran

ce

Shopke

eper

insurance

Health In

surance

Acciden

tal In

suran

ce0%

5%

10%

15%

20%

25%

30%

35%

20%

10%

30%

20% 20%

Prefered Types of Insurance

Prefered Types of Insurance

The main customers of General Insurance Companies are the business units and

the shopkeepers who opt for General insurance

Page 71


QuestionnaireNAME:

GENDER:-

o Male

o Female

AGE:-

I. Do you feel the necessity of having general insurance covers:-

o Yes

o NO

If yes, then which company will you prefer:-

o GIC

o ICICI Lombard

o TATA AIG

o IFFCO TOKIO

o Others

II. How many general insurance are you having:-

o 1

o 2-4

o > 4

III. Are you aware about the schemes offered by GIC?

o Somewhat aware

o About all

o Not aware

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IV. Do you feel that GIC offers customer centric product:-

o Highly Agree

o Agree

o Neither Agree nor Disagree

o Disagree

o Highly Disagree

V. The service provided by GIC is :

o Excellent

o Very Good

o Good

o Moderate

o Poor

o Very poor

VI. You came to know about GIC from :-

o Ads( print/ digital)

o Insurance Agents

o Friends and agents

o Others

VII. What is your opinion about the yearly premium? Is it :-

o Very High

o High

o Reasonable

o Low

o Very Low

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VIII. What is your satisfaction level towards the policy taken? You are:-

o Highly Satisfied

o Satisfied

o Neither Satisfied nor Dissatisfied

o Dissatisfied

o Highly Dissatisfied

IX. Have you taken the policy from an insurance agent?

o Yes

o No

X. Which factor influence you the most in choosing an insurance company:-

o Reputation

o Service

o Accessibility

o Good scheme

o Low premium

o Experience of others

o Claim settlement

XI. Which type of general insurance cover do you prefer the most:-

o Auto/Car Insurance

o Travel Insurance

o Shopkeeper’s Insurance

o Health Insurance

o Accidental Insurance

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FindingsSWOT ANALYSIS OF GENERAL INSURANCE CORPORATION (REINSURANCE)

Strengths Good Customer service Good brand name Wide variety of products Large distribution network India’s no.1 Reinsurance company

Weakness Less flexible Products Lack of professional management Un trained employee’s

Opportunities

Untapped market Banks ready to tie up for as a readymade distribution network

for a small fee.

Threats Increasing competition of private players Fast acquisition of market by private players Need to reposition the brand name in the minds of customers.

Page 75


Conclusion

The insurance business is major service oriented business in the world.

The services offered by the insurance industry are well recognized and utilized

by the general public and commercial sector of the world. The life insurance

business has covered nearly 40% of the population of the world. Global players

with strong brands in the insurance industry today set up their back office

operation in low cost countries, manage capital on a global basis, make use of

their special skills worldwide and use their superior managerial ability to secure

leadership positions in the industry.

The claims management is an integral part of insurance. It involves the

storage, processing and transmission of information relating to settlement of

insurance claims. The use of Information Technology also plays a very

important role in claims settlement. In managing the claims handling function,

insurers seek to balance the elements of customer satisfaction, administrative

handling expenses, and claims overpayment leakages. As part of this balancing

act, fraudulent insurance practices are a major business risk that must be

managed and overcome. Disputes between insurers and insured’s over the

validity of claims or claims handling practices occasionally escalate into

litigation which should be solved with due care.

In this fast developing scenario it will not be enough if companies have the

futuristic strategies. Implementation of the strategies, effectively adapting them

to ongoing changes can spell success. The success of claim management

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http://en.wikipedia.org/wiki/Insurance_fraud


depends on the satisfaction of the customers. The customers are attracted to an

insurance company by its state of art claim service. Therefore, before designing

an IT system for claim management, customer’s expectations are to be taken in

to account. The customers, their needs, knowledge of how the market works,

and what they want, these are the things that are important for an insurance

company for serving the customers in a better manner through better

technology.

Page 77


Bibliography

The information is taken from various sources such as books, magazines,

articles, internet etc.

Books:

Theories and Practices in Insurance

Insurance watch

Business world

Business today

Webliography www.insuremagic.com

www.gicindia.com

www.icicilombard.com

www.insurancewatch.com

www.insuranceonline.com

Search engines:

www.google.com

Page 78

http://www.google.com/

http://www.insuranceonline.com/

http://www.insurancewatch.com/

http://www.icicprulife.com/

http://www.licindia.com/

http://www.insuremagic.com/


www.ask.com

Page 79

http://www.ask.com/

GIC

Documents

general insurance claims

insurance premiums

case of insurance

insurance industry

general insurance companiessr

claims settlement procedure

indian insurance sector

life insurance coverage