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Insurance industry is now facing winds of change thanks to proliferation of low-cost insurance schemes brought in by the government and digital technology which is driving change in all sectors of economy. The focus every where now is on big data and analytics. The Insurance Regulatory and Development Authority of India (IRDAI) has been a catalyst for this change. Subhash C Khuntia, Chairman, has been responsible for bringing in a host of reforms over last one year after assumption charge. As a veteran civil servant and the first insurance regulator with a Ph.D in Economics, Khuntia has been focussing on harnessing digital technology for benefit of all stakeholders and making regulation all encompassing yet modern. He spoke to BusinessLine on industry and issues. Excerpts:
There has been talk of a slowdown and impending recession in the economy. How is insurance industry performance in this back drop?
Largely, there has been no adverse impact on insurance so far. I hope and expect it will continue. There is, however, a slight slowdown in motor insurance has been noticed due to recent dip in new vehicle sales. Actually, people should look for more and more security by preferring insurance in times of slowdown as insurance is anti-cyclical protection.
How has been the growth rate so far?
Things are fine up to this first half ended September 2019. Total insurance industry clocked 20 per cent growth. Life insurance and general insurance grew by 21 per cent and 16 per cent, respectively. Due to increased awareness, health insurance catching up. Standalone health insurance grew 36 per cent.
We have learnt that some general insurers are finding going tough in Pradhan Mantri Fasal Bima Yojana, the flagship crop insurance scheme. One major private insurer exited it citing high reinsurance premium rates. As a regulator, do you plan to intervene in any manner?
We would like all insurance companies to participate in crop insurance. But the rates of reinsurance and premium are market- driven. Regulator is not in picture in the whole issue.
With regard to Ayushman Bharat, there have been reports of frauds. Has it come to your notice? What is being done in this regard?
Ayushman Bharat is being implemented in three models of insurance, trust and mixed model. As far as we are concerned, there has been no frauds. However, a panel has been set up to look into and data collection is being done and we will tract on the basis of data analytics. But there is nothing much to worry in this regard.
How is the health of health insurance? There have been complaints from policyholders on rejection of claims while industry speaks about false claims and losses...
We are trying to sort out the issues so that health insurance cover will be more beneficial to all. There are issues such as problems arising out of different sets of exclusion, for instance. I have been telling insurers to explain features of policies more clearly. The more time one takes in underwriting, more speed can be achieved in claims settlement.
Efforts are also on to introduce a standard health cover product which will be like a standard banking product. Because it will be standardised model, there should not be much need for explanation.
What about pricing of the proposed standard health insurance product?
It will be reasonable as all insurers will be mandated to offer this and competition positively impacts pricing.
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