Money & Banking

Maintain persistency ratios, renewal of general insurance products: IRDAI Chairman to insurers

Our Bureau. Mumbai | Updated on September 17, 2020

The insurance regulator is monitoring the persistency levels of life insurance companies, and is also working on standard products for dwelling unit insurance and term insurance.

The Insurance Regulatory and Development Authority of India (IRDAI) wants 13th month persistency at at least 90 per cent and 61st month persistency at a minimum of 65 per cent.

“I would urge all of you to move towards this at the earliest,” said Subhash Chandra Khuntia, Chairman, IRDAI, on Thursday at the CII Insurance and Pensions Summit.

The IRDAI will be monitoring this and has also asked all life insurers to try and meet these targets, he further said.

Khuntia also asked general insurance companies to ensure repeat purchase and renewal of policies as these are largely for a one-year time period. “This should be an indicator of your efficiency and customer relationship,” he said.

The IRDAI is working on standard products for insurance of dwelling units as well as term insurance, which would be introduced by all insurers.

“It becomes much easier for policyholders to buy such products,” he noted.

Covid-19 claims

Khuntia further said that there has been a surge in health insurance claims related to Covid-19 with a total of 2.38 lakh claims. Of these, 1.48 lakh claims, amounting to ₹1,430 crore, have already been settled.

Life insurance claims related to Covid-19 are also being settled by insurers within a week’s time, he said.

He also said that about 60 lakh Covid-19 policies – Corona Kavach and Corona Rakshak – have been sold. This includes a total of 28 lakh Corona Kavach policies with cumulative sum insured of ₹1.02 lakh crore, and 32 lakh Rakshak policies involving sum assured of ₹1.1-lakh crore.

He also expressed hope of a revival in the insurance industry and pointed out that the sector has witnessed positive growth of 2.4 per cent between April and August compared to a year ago.

Published on September 17, 2020

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