PSU insurance majors are planning to simplify the jargon used in non-life insurance policies in an effort to come closer to the common man.
The government will allow insurance firms freedom to frame their own guidelines from April 1, 2008, and the simplification of language is seen as a step in that direction. As of now, non-life insurance policies spell out their coverage in 4-5 exhaustive pages, replete with jargon. If insurance companies have it their way, they will restrict the coverage to a page in a language that will be understood by a layman before the stipulated date, subject to approval from Insurance Regulatory & Development Authority’s (IRDA) approval.
V Ramaswamy, chairman and managing director of Kolkata-based National Insurance Co Ltd (NICL) said that apart from simplifying the policies, NICL is also working on introducing microfinance and an umbrella policy for all risks that a company needs to cover, replacing multiple policies for a company that are currently in vogue.
Speaking at an insurance conclave organized by the Federation of Indian Chambers of Commerce & Industry (FICCI), Ramaswamy added that under the changed circumstances prevailing in the insurance sector, insurance companies have been forced to frame policies suited to the individual needs of people. Oriental Insurance Co Ltd’s chairman and managing director M Ramadoss too said that insurers have to come up with policies to suit various needs. Ruling out the possibility of a price war in premium after the detariffing regime, which came into effect from January 1, 2007.
Ramadoss.added that despite the apprehensions expressed by IRDA and the companies, the market has behaved well and the insurance companies, in the past four months, have done well. He said that post-detariffing, PSU insurance majors have to develop under-writing skills seriously. For the last 30 years, insurance firms have been quoting tables of tariffs.