Weekly Insurance Round-up Tuesday, January 4, 2022

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✴️ Claims cannot be repudiated citing existing medical conditions: SC 👨‍⚖️

✴️ Insurers received ₹2,599 Cr. worth claims in floods and cyclones in 2020-21 🌊 

✴️ Life insurance death claims rise by 41% in 2021 ⬆️

✴️ Life Insurance Corporation (LIC) introduces LIC Digi Zone 📱

✴️ South Indian Bank and HDFC Life Insurance come together for Bancassurance Tie up 🤝

✴️ Insurtech Startup SecureNow raises $6 Mn 💰

• The Supreme Court, in a hearing on December 28, 2021, said that once a policy is issued, insurers cannot repudiate claims based on existing medical conditions that are already disclosed by the insured.
• The hearing was held for an appeal filed by Mr. Manmohan Nanda against an order of the National Consumer Disputes Redressal Commission (NCDRC).
• Mr. Nanda was hospitalized after suffering a heart attack while he was travelling abroad. He underwent angioplasty and three stents were inserted to remove the blocks from his heart vessels. 
• Mr. Nanda had an Overseas Mediclaim Business and Holiday Policy. While claiming for the expenses, the insurer repudiated the claim stating he had a history of hyperlipidemia and diabetes, which was not disclosed while buying the policy.
• So, the Supreme Court announced that once the insurer issues a policy after evaluating the insured’s medical condition, they can’t repudiate the claim based on the existing condition which was disclosed in the proposal form. The claim can’t be repudiated even if the disclosed medical condition led to a particular risk in respect to which the claim has been made.
• Beshak Take: Although insurance awareness is increasing in India, many are still unaware of their rights when it comes to claims. While insurers can’t reject claims citing pre-existing and other medical conditions once disclosed by the insured, there are cases where this has happened. Such claims might get postponed for a long time if people are not aware of the terms and conditions properly - and the whole process might get too time-consuming.
• Therefore, to avoid any surprises at the time of claim, it is important that you - 
  • Disclose all pre-existing and other medical conditions to the insurer. 
  • Be aware of the policy terms and your rights at the time of claim. 

Sources: The Print | LiveMint

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• As per IRDAI’s Annual Report 2020-21, insurers received a total of 34,404 claims amounting to ₹2559.10 Cr. Out of these, 27,756 claims of ₹760.68 Cr (80%) were settled. 3,428 claims amounting to ₹1705.52 Cr. are still pending with the insurers.
• As per the report, the majority of the claims are still pending because of -
  • reinstatement of the property not taken place.
  • non-submission of required documents by the insured.
• In 2021, losses to some properties were caused due to cyclones Tauktae and Yaas in some parts of India. As per the report, claims amounting to ₹1,351 Cr were received out of which ₹38.40 Cr claims are settled as of June 30, 2021. 
• Disposal of the pending claims is being monitored by the authorities regularly.

Source: The India Express

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• The Annual Report 2020-21 released by IRDAI also showed that there was a spike in Life insurance death claims this year compared to the previous year.
• The death claims received by Life insurers in 2020-21 were ₹41,958.43 Cr, 41% more than ₹29,793.87 Cr claims received in 2019-20. 
• The steep rise in death claims was mostly during the pandemic which went down post the second wave of Covid-19. However, industry experts still expect a rise in death claims as non-covid deaths have increased due to comorbidities being triggered by Covid-19.
• Experts are of the opinion that as the pandemic situation is too uncertain and with the emergence of the new variant Omicron, the journey towards normalization is hampered. And, if the third wave happens in India, it will majorly impact the insurance companies’ solvency margin, embedded value and the profits declared in the medium to long term.
• Speaking of individual life insurance business claims, ₹10.84 lakh claims out of the total ₹11.01 Lakh were paid during the year 2020-21. From the total claims received, 9,527 claims were repudiated and 3,032 claims were rejected.

Source: Fortune India

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• Taking a step towards becoming a tech-driven life insurer, the Life Insurance Corporation of India introduced LIC Digi Zone. 
• Digi Zone can be used by customers to buy policies online, pay premiums, and avail of other services. LIC will also provide information regarding LIC products and services through kiosks installed on the premises.
• With this, LIC aims to increase digital sales and services for its customers and undertake the next wave of digital transformation to unlock several benefits of accelerating growth, driving customer satisfaction, and improving intermediary productivity and loyalty.

Source:  PSU Connect

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• On 27th December 2021, HDFC Life Insurance Company announced a bancassurance tie-up with South Indian Bank (SIB). 
• With this tie-up, customers of SIB will be able to avail themselves of HDFC Life’s life insurance products, including solutions for protection, savings and investment, retirement, and critical illness.
• Suresh Badami, executive director of HDFC Life believes India is largely an under-insured country. Post pandemic, it has become important for every individual to invest in life insurance products for financial security, protection, morbidity, and savings.
• HDFC Life Insurance is making an effort to cover a larger portion of the population with their products. It also aims to provide SIB’s customer base with innovative products and superior levels of service through both the physical and digital routes.
• Beshak Take: With the increase in insurance awareness post-pandemic, more and more people are looking to buy insurance for physical as well as financial security. This is one of the main reasons why bancassurance tie-ups are gaining traction. Such bancassurance tie-ups will make the experience of customers seamless and effortless, and also -  
  • Help insurers increase their customer base. 
  • Help banks provide insurance protection to their existing customers. 

Source: The Hindu Business line

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• A Delhi-based Insurtech startup, SecureNow, raised $6 Mn from Apis Insurtech Fund I and Charan Singh, founder of SelectQuote Inc. 
• SecureNow will use these funds to scale up its business operations. It has already built an end-to-end insurtech platform that currently serves 25,000 small businesses spread across 150 locations.
• The startup is a one-stop solution for its customers for all insurance matters including claims. Its product range consists of commercial insurances that include group health insurance, property, marine, and liability covers.
• The SecureNow group consists of SecureNow TechServices and SecureNow Insurance Broker which is an insurance broker that sells commercial insurance to SMEs and mid-market clients (companies larger than small businesses but smaller than big businesses).
• Founded by Abhishek Bondia and Kapil Mehta in 2011, the startup aims to grow its customer base to more than 1 Mn businesses in the next three years. 

Source: Inc42

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