CRITICAL REVIEW OF CLAIMS MANAGEMENT PROCESS EFFECTIVENESS IN LIFE INSURANCE COMPANIES IN INDIA DURING PANDEMIC -COVID 19: LESSONS OVERWRITING CONTENTS IN TRADITIONAL BOOKS

ABSTRACT

Background: No activity in any Life Insurance Company is of more importance than the settlement of Claims to the satisfaction of the beneficiary, in case of premature death of the life Assured. It is the ultimate moment of Truth in the contract of Life insurance. The Life Insurance Companies must be conscientious enough to understand that claim settlement is the very purpose of their existence in the society in fulfillment of the promise made to policyholders. The process of claim settlement from the perspective of policyholders or the beneficiaries revolves round a. Time taken to settle the claim and b. Ease of claim settlement in terms of number as well as type of documents called for. The companies tries to achieve this objective without compromising on basic checks encompassing over things such as genuineness of the claim etc. Accordingly, the companies have established standard processes and checklist of documents that is called for at the time of claim. The claim management process consists of claim initiation by the nominee or the policyholderas the case may be under the policy, claim process or enquiry by the insurer to check the genuineness of the claim and Claim settlement within the Regulations as indicated by the Death Claim settlement Ratio (DCSR), Solvency Ratio (SR) etc., The Covid19 pandemic caused severe health disorders that resulted in more deaths, impacting the above claims process adversely warranting companies to have relook at the entire process and the checklist of documents so thatTurn around Time is maintained whatever be the number of claims intimated without giving room for entertaining any fraudulent claims By collecting the relevant claim statistics from credible sources such as Insurance Regulatory and Development of India (IRDAI) etc, this paper analyses the current practice and brings out how various components of claims management process of an Insurance Company were affected especially in the background of unprecedented Covidl9 pandemic. This paper also suggests the ways and means to address these challenges through a 6-step strategy quoting the expert's suggestions as well. Challenges thrown by Covidl9 pandemic on various components of the Claim management process ofan insurance company are listed and categorized as I. Related to Claim intimation by customers II. Regulatory Issues related III. Claim management process related IV. Product pricing related V. Legal aspects related VI. Technology related Traditionally, in any insurance course or internal training, the impact of epidemics on Sales, Underwriting and Claims are not focused at all. The unprecedented covid has made all the departments totally to revisit their approach right from scratch afresh. It has also made all the Insurance Institutes, Colleges and the internal training of insurance companies to includethe impact of pandemics or epidemics henceforth in their books. Research Methods: The impact of Covid19 is evaluated by calculating the variation between pre-Covid19 data and post-Covid19 dataandanalyzing the reasons for the variation with supporting information. Data is extracted from authorized websites of various Life Insurance Companies and IRDAI. The data considered for analysis is also validated through information gathered through various interview articles of Senior Management People of different Insurance Companies. Results: The study brings out theimmediate need forrevisiting the process followed in respect of all the above sixcomponents of the claim management to address the challenges posed by Covid19 pandemic. It also brings out the need for amending some existing laws related to life insurance. It emphasizes the urgency of the above reforms to 1) facilitate smooth settlement of death claims to the satisfaction of the customers, 2) improve the profitability of the insurance companies within the guidelines of the regulator and Acts of Government of India.3. To reorient the training and training materials with change in focus to take care of learnings from Covid