Product Design and Claims:-

Insurance is invariably sold rather than bought (of course specific lines like motor enjoy greater awareness hence greater pull). Therefore, it is often tempting to design products which generate higher demand by offering low premium rates focusing on indirect / exaggerated benefits of insurance products de-focusing key exclusions and non-coverage areas The result is launch of products which may not match the actual and adequate coverage of risks. Also, if the premiums are not matched with extent of risks covered, the insurers are under increasing pressure to reject claims. Often in a rush to innovate products rapidly, the insurers end up designing products which common people find difficult to keep pace with and find too complicated to understand. The need from insurer therefore is to design simple, understandable products, price them on actual risks being covered and standardize insurance industry specific terms. Doing so, while lodging a claim, one does not find any mismatch in his / her expectation and what is actually covered and the faith in core value proposition of insurance is not lost. For the insured too, it is important to understand all the details of the product and the comparable products in the market and carefully choose the riders that suit their need. The insured also needs to be honest and transparent in filing his claims, in fact his part of being a honest party begins from the very filing of correct and complete details in the insurance proposal form. Insurers anyway do establish multiple touch-points through which they verify the information provided by claim applicants.