IRDAI has given a target that the 13th month persistency should not be below 90% and 61st month persistency should not go down below 65%.
The Insurance Regulatory and Development Authority of India (IRDAI) is planning to come out with standard plans for the life as well as non-life insurance industry to improve penetration of insurance. IRDAI will soon roll out guidelines regarding standard products for term insurance plans, dwelling and medium and small enterprises.In the last few months, IRDAI has announced standard health insurance products, called as Arogya Sanjeevani, and Covid-specific products — Corona Rakshak and Corona Kavach.
While speaking at the CII’s 22nd Insurance and Pension Summit, Subhash C Khuntia, chairman of IRDAI, said so far 2.38 lakh claims for novel Coronavirus have been filed. Of these, 1.48 lakh claims amounting to Rs 1,430 crore have been settled. Under the Corona Kavach plan, around 28 lakh lives have been covered since its launch on July 10, 2020.
“The idea to come out with the standard products for dwelling units is because the same product will be sold by all the companies. It will become easier for policyholders to pick such products as they don’t have to go through voluminous policy documents to find out terms and conditions. So, hopefully, more and more people will protect their homes,” said Khuntia. Standard products will come out for micro enterprises as well for small industries, which will cover losses caused by floods and fire.
IRDAI believes that the negative growth seen in new premiums will improve in the months to come. “In April, the insurance industry had seen a negative growth, but it has revived continuously. I hope that by the end of September, it would be even better. By the end of the year, we should wipe out the downturn in the insurance industry that has happened in the earlier part of this year,” Khuntia said.
IRDAI has urged insurers to improve the persistency for the 13th month and 61st month. IRDAI has given a target that the 13th month persistency should not be below 90% and 61st month persistency should not go down below 65%.
Persistency is the percentage of policies that have not discontinued paying premiums or been surrendered. It can be measured in terms of the number of policies or in terms of premium.
The regulator is also looking to introduce risk-based solvency for insurance companies in the next three years.
This article was originally posted here.
