Niranjan Tadanki, 49, marketing head of a real estate major in Bengaluru, had a minor accident when his Audi car brushed against a two wheeler. He immediately informed the Audi service centre in the city. The people from the centre came and towed away his car. They also called the representatives of his insurance company, ICICI Lombard. The company conducted the requisite background checks and completed all formalities. Around Rs 2 lakh was spent on the repair of the high-end car. Tadanki had to pay just Rs 2,000.
The whole claim exercise was smooth and Tadanki was able to get delivery of the vehicle within two weeks without many questions being asked. Sometime later, Tadanki also underwent a medical examination for hernia which required him to be hospitalised for one day. He went to a hospital which was networked to the same insurance company and the complete cost was borne by the company. “The total expense came to about Rs 20,000 but Rs 18,000 was paid by the insurance company and the whole process was smooth,” said Tadanki.
Of late, many insurance companies have embarked on smoother claim process methodologies in order to make the process hassle-free for their customers. Dr S. Prakash, senior executive director at Star Health and Allied Insurance Co Ltd, said, “An insurance is a contract between an insurance company and the insured person. In health insurance, the policy is designed by the company and the services are offered by hospitals.”
“Sometimes, there are issues when there is a disconnect. The hospital's front office may not be equipped to give the necessary information and support to the customer. Also, there is a disconnect when the customer has not read the conditions of the policy before agreeing to the terms,” said Dr Prakash. Interestingly, Star Health, a firm based in Chennai, has hired qualified doctors who are actively taking part in addressing grievances of health insurance policyholders. These doctors are also involved in the claim process so as to streamline the claims and to sort out any issues which consumers may have.
Similarly, Bajaj Allianz General Insurance Company has over 5,000 hospitals in its network that provide cashless claim facility to its customers across the country. It does not work with a third-party administrator and has an in-house settlement team for health insurance policies. The company says the turnaround time for its cashless approvals is less than 60 minutes as against the industry average of four hours because of the in-house settlement team and the technology used to interact with the hospital. Sasikumar Adidamu, chief technical officer, non-motor, Bajaj Allianz GIC, said: “For reimbursement claim settlements up to Rs 20,000, the company has enabled the submission of digital documents through its database application—Insurance Wallet. For reimbursement claims, our turnaround time is seven days, as against an industry average of 14 days, provided all the relevant documents pertaining to the claim has been provided. In case the client has used the Insurance Wallet application, the reimbursement takes only two days.”
At the same time, the company has also embarked on some new initiatives to streamline its health insurance claims by having image-based claim processing. For health and motor claims, the complete workflow has been changed to image-based claim processing across the country, which has enabled the company to automatically allocate cases on first-in-first-out basis through a software. This has helped it in saving time, boosting its productivity and reducing its response time.
Bajaj Allianz also has a system that is integrated with hospitals in its network. This allows documents to be shared with the hospitals in real time, reducing the response time to settle claims. The company also has a cloud-based platform that processes cashless health insurance claims in real time. “This integration has resulted in the elimination of manual methods of data processing and significantly brought down the turnaround time to benefit the policyholders tremendously,” said Adidamu. The company also has a mobile version of Insurance Wallet, which works on both android and iOS, for policy related transactions on the go. The users can intimate and file claims, access policy related information and value added services, track claims and get information on the company’s branches and hospitals.
Similarly, for the motor insurance business, Bajaj Allianz has tied up with over 4,000 motor dealers across the country to offer cashless claim settlement services to its customers. Manohar Bhat, business head, motor, Bajaj Allianz GIC said: “Once the claim is registered by the customer, a surveyor is deployed to assess the loss and the extent of damage. Simultaneously, the customer is requested to submit the requisite documents (claim form, the vehicle's registration certificate, driving licence and first information report, if applicable). Today, the customer also has an option to upload the claim documents on the company’s mobile application rather than sending physical copies.”
The assessment at Bajaj Allianz GIC is also done through tab or mobile-based application by the surveyor, who instantaneously uploads the survey report along with photographs of the damaged vehicle illustrating details and the extent of the damage. The claim is then verified and based on the policy terms and conditions, the final settlement is made. “In case of theft, a copy of the first information report is mandatory while registering the claim. The settlement is made once the company receives a report from the police that the vehicle is non-traceable. This is usually issued after 90 days,” Bhat said.
He said the company had one of the best turnaround times for settling motor insurance claims in the industry. “For claims that amount to less than Rs 30,000, the processing is done digitally using tabs, and it takes less than three days for the final settlement. For high-value claims, the settlement time is seven to eight days, provided all claim-related documents are submitted. We are soon planning to launch an app through which the customer will be able to self-inspect and settle the claim, bringing down the claim settlement time from days to minutes,” said Bhat.
Mumbai-based insurance firm SBI General Insurance has also streamlined its claim process and its claims handling team gets in touch with the customer immediately after the reporting of a claim and assists the customer until the settlement. Pankaj Verma, head of claims operations at SBI GI, said: “We have an integrated IT system fully enabled to service a customer pertaining to any particular location or branch across the country. This ensures that our customers receive uniform service across various geographies. We provide facilities such as immediate on account payments after confirmation of liability, roadside assistance in case of accident and cashless claim settlement for motor and health claims. During natural disasters, our claims documentation processes are relaxed to help customers.”
The claims handling in SBI General is currently managed by its in-house team for all its major businesses like motor, home and small and medium-sized enterprises. The company has also tied up with third-party administrators to provide cashless health claim settlements in hospitals across India. “As an organisation, we have been investing in developing skills of our in-house team, which includes doctors for health claims to provide better settlement experience to our customers. We still face some typical issues in servicing the individual customers such as delay in completion of basic documentation to settle the claims and lack of awareness about the coverage or procedures,” said Verma.
He added that the grievances in individual claims at the company were minimal as per the industry averages. “The grievances mostly emanate from lack of understanding of product coverages like standard exclusions of health insurance covers. We have been consistently trying to enhance customer awareness through various campaigns, including initiatives on social media ,” said Verma.
Undoubtedly, insurance companies are actively using technology to streamline their claim processing. For instance, Future Generali India Insurance has launched a software called Pre-Auth module, which is an online system through which cashless health insurance claims are processed on cloud-based platforms and data is exchanged with the hospital. Network hospitals have access to this module, thus facilitating seamless communication between them and the company.
For motor insurance, the company has introduced an application called i-MoSS (instant-mobile survey and settlement) for surveyors to help them conduct on-the-spot settlement of up to 70 per cent of the motor insurance claims. Easwara Narayanan, chief operating officer, Future Generali India Insurance, said: “We have incorporated an industry feature in i-MoSS known as the optical character reader, which is designed to calculate estimates and liability of each party within seconds. With i-MoSS, the claim settlement has become simpler and faster for our customers.”
The company is also giving its customers multiple options to file claims such as going to its offices, through its website and by an SMS or a phone call. “We have defined turnaround times for the various stages of claims process to obviate grievances. Despite this, the grievances which get reported are addressed by our well-trained contact centre employees assisted by our claims officials on an average turnaround time of three to four days as against the 15 days mandated by the regulatory body,” said Narayanan.
“We even have claims officials operating out of our contact centre to provide immediate technical solutions when quantum difference is the issue. For motor insurance, a large number of claims are handled by our in-house surveyors. We have started the usage of i-MoSS app with them and we will soon be extending the facility to our external surveyors. For loss of an amount that is less than or equal to Rs 50,000, one can assess themselves. Beyond that, we have to hire an external surveyor for the sake of neutrality,” he said.
“For health insurance, all claims are processed in-house. Through our Pre-Auth module, cashless health insurance claims are processed within one to two hours on cloud-based platforms. Through this module the patient can key in their diagnosis, doctor's prescription and other documents. They just have to log on to the module,” said Narayanan.
Many life insurance companies are also streamlining their processes in order to offer better claims services to its customers. Max Life Insurance, for instance, has made it a point to respond to special situations by minimising the number documents and assessment time-lines by way of setting up a help desk for special situations such as floods, train accidents and avalanches. Ashok S.N., chief underwriter and head of underwriting and claims, Max Life Insurance, said: “We are driven by our 'treating customers fairly' principle and the fiduciary responsibility we hold as a life insurance company to ensure that no non-genuine claim is paid. The insurance industry is now facing an increase in the frequency and number of organised frauds of which the Supreme Court has taken note of and requested information from the governments. To mitigate fraud risks, we have extensive pre-policy issuance checks for risks identified by our experience based analytical models.” He said the company along with other private players had setup an industry level database to augment pre-issuance checks. “The claims process is fairly well evolved, and the entire process from intimation to settlement is well integrated by our technological assets. Our processes are also periodically audited by our internal audit team and by our external ISO auditors and multinational reinsurance companies,” said Ashok.
The company has found that grievances at claims stage are largely from nominees whose claims were rejected as per policy terms and conditions, claims from policies which had lapsed for want of premiums and from nominees whose claims were repudiated for material non-disclosure of pre-existing medical conditions. “Typically, an aggrieved nominee has an opportunity to approach the company with his grievance, and we ensure that these grievances are reviewed by a member of the claims review committee, typically a member of our senior leadership team,” said Ashok.
The company also has an in-house model for its claim assessment process. “The in-house model helps us in preserving consistency in our claims assessment. As per the Insurance Regulatory and Development Authority of India’s annual report for the financial year that ended in March 2016, we are the number one player in the private sector with the highest claims paid ratio of 96.95 per cent and lowest repudiation ratio of 3.01 per cent. We have also introduced InstaClaim, and through this initiative, we communicate claim approval decisions to the nominee within a day of intimation for all policies that have run for three continuous years with us,” said Ashok.
Indeed claim payout is one of the most important activities for any life insurance company and every company aims to settle genuine claims without hassles and within the shortest possible time and at the same time also ensure that no genuine claim is delayed and no wrongful or fraudulent claim is honoured. SBI Life Insurance, for instance, has more than 750 branches across the country, equipped with adequate system support and trained manpower to guide and assist claimants. The company has introduced an ‘online death claim registration’ facility on its website, through which the claimants can register a death claim in a convenient manner. The claim gets registered immediately in the system, and claimant is guided on the documentation part and can get updated information on the claim. Alternatively, the claimant can also go to the nearest SBI Life office and report the death claim and get necessary assistance. Once the claim is intimated, SBI Life categorises it into fast track claims and non-fast track claims. Its internal turnaround time set for the settlement of fast track claims is six working days as the case is not investigated. In case of non-fast track claims when the death of the customer has occurred within three years from the commencement of policy, his profile, the sum assured and the duration of the policy are vital in claim assessment. Based on various parameters, the claim is extensively evaluated to establish the genuineness of the claim. Once the claim is admitted, the payout is made through electronic mode to the claimant and the decision of the claim is simultaneously communicated to the claimant.
Ravindra Kumar, chief operating officer, SBI Life Insurance, said: “There are no major challenges as far as fast track claims are concerned. However, assessment of non-fast track claims require an extensive evaluation of documents. As the complete set of documents required for claim assessment is not received along with claim intimation, procuring those documents is a challenge. Further, in a few cases wherein there is no valid nomination, the title to claim is open. Such open title cases are processed with additional documents to establish the title. Coordination with family members of the deceased or nominee under such cases becomes a challenge,” said Kumar.
Generally, the company comes across grievances from claimants regarding its non-fast track claim process. They complain that it is complex, cumbersome and time consuming. “The claimant gets aggrieved if his claim is rejected or repudiated. In such cases, we provide personal assistance to claimant by reaching out to them through our experienced staff at branches and central processing centres. We make them understand the exact requirements and the rationale behind it. We also guide them on how to get information and document from other government or non-government organisations. This personal touch actually helps us to get the required documents at the earliest and close the case,” said Kumar.
The company also aims to ensure fair resolution for customers having grievances regarding repudiation of claim. The claimant can represent his or her case by writing to the head of the company's claims department for reconsideration in case he is not satisfied with the decision of the company. Such representations are put up to the high level the claim review committee, which comprises of the top management of SBI Life along with a retired high court judge. The committee may uphold or change the original claim decision based on the merits of the case. SBI Life has also formulated an ex gratia committee to assess the claim decision based on humanitarian grounds. Payment is made from shareholders fund for such cases.
Similarly, at another life insurance major Bharti AXA Life Insurance, the aim is to help the customer by processing the claim faster. All branches of the company have dedicated claims handlers (DCH) to facilitate faster completion of the documentation process. The DCH also updates the customer on the status of the claim at various stages. Claimants can also register online or they can walk in to any branch for initiating their claim process. The company has also introduced a grief support programme through which any claimant can voluntarily seek counselling over telephone from qualified practitioners.
The company has found that challenges on documentation pertaining to claims are usually few and far between as they have simplified their documentation process and the list of requirements. Latha Ayyar, chief operating officer, Bharti AXA Life Insurance, said in the recent past, there were certain geographies wherein “fraudulent” claims were observed. “ These claims were being lodged by insuring dead or critically ill people. Our experience is no different from the industry and to overcome this roadblock, we have created a scoring model to identify such applications at the inception stage. At the time of claims, the customer grievances are mostly related to the benefit payable as per the product features. This usually happens when the benefits under a life insurance policy is payable under installments. Our claim assessors call the claimant on receipt of the claim and explain the product benefits to address such grievances,” said Ayyar. Claims processing is part of the ‘core activity’ for the company and as per the regulatory classification of activities, it has not outsourced it to any third party.
In the life insurance segment, HDFC Life is making constant innovations in order to streamline its claims process. The company continuously reviews the claims documentation to make it claimant-friendly. As part of the process, the list of all the documents required for the claims is available on its website. The company has also uploaded a few videos which explain the documentation required for the claims. HDFC Life closed the 2015-16 financial year with 95.02 per cent settlement ratio.
Metilda Stanley, senior vice-president, claims, underwriting and operations, HDFC Life, said: “In addition to our customer-facing team, the claimant can raise a request for help through our website or call centre. Since claim is a function of risk assessment, it requires a highly skilled team to execute the job and in order to do this, our team undergoes rigorous, structured training. This helps us execute the process smoothly, in the right manner and in the least possible time. We have also embraced technology in a big way across all our processes in order to make the claims process simpler and faster for our customers. The entire claim processing is done internally,” she said.
The company has broadly categorised life insurance claims into two types. These are non-early claims, wherein the date of death is after three years from the date of risk commencement or policy issuance, and early claims, wherein death has happened within three years of risk commencement of the policy issuance. “The documentation and the process of both these categories differ with more due diligence required for claims which are early in nature. One of the other reasons for delay in granting claims is the non-submission of complete set of documents by the claimant or incomplete disclosure of information. This leads to additional due diligence to weed out frauds,” said Stanley. “Most grievances revolve around the rejection of claims for lapsed and non-active policies or because of non-disclosure of health, personal or financial details by the customer at the time of policy issuance.”
