Insurance is based on good faith. In this, mutual good faith of both the insured and the insured is the pillar and both have their own duties and discipline. If the insured has to perform his duty, then the insurer has to fulfill his duty.
In order to make the insurance service better, it is necessary to adopt the processes of insurance. In this, the role of both the insured and the insured is important. If we take the role of only one party in this, then it seems that this excellent service will be secondary, and it is not fair to blame only one party in it.
The balance between the assumptions of insurance and commercialization also needs to be addressed. The customer should be made aware of the procedural functions of the insurance and the customer should be fully aware of the work to be done by the customer. In the absence of this, the insured has to go to the court due to disputes, litigation, and sometimes even reaching the court due to the bitterness of mutual relations.
It is a matter of regret that a relationship that started with good faith has become controversial and turned into an issue. Instead of getting involved in unnecessary debates, it would be better to identify the reasons and find a solution.
Collaboration required for underwriting practice
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The purpose of insurance is not only to increase the business and increase the size of the insurance, but to keep the insurance alive, it is equally necessary to keep the relationship between the insured and the insured alive.
If it is not right for the insured to be punished for the mistake made due to the underwriting process, then it is his responsibility to make the process easier. It is also a wrong idea of the insured to consider the insurance policy only as a piece of paper. Underwriting Practices Rewriting is essential for both the insured and the insured. If only claims are given priority but the initial processes and practices of underwriting are not followed, then the problems will remain the same and the problems will be repeated again and again.
Since most of the underwriting process starts with the insurance premium of the proposed risk, it seems that there is no information about the insurance and there is no environment to discuss it. The most important thing for the underwriting process to be accurate is the risk assessment of the proposed asset and the analysis of its exposure.
Underwriting is the starting point for insurance and the claim is the end point. Accurate insurance requires the right details and enough time to be accurate. The root of the problem is that there are no accurate details and not enough time for the process. Customers are in a hurry and so are employees. As a result, a situation of debate was created.
There are minimum underwriting standards required for general insurance. So that the customer also gets the insurance service quickly. Slightly technical and complex types of insurance require a lot of time.
Insurance companies also employ technical staff who evaluate such complex proposals. It is also necessary for the insured to be aware of this.
Apart from this, it is also necessary to inform the customers about the measures to reduce the risk along with the risk. Since the insurance is basically based on the principle of indemnity, it is necessary for the insured to adopt measures to reduce the loss as there is a situation where the claim will not be paid to the hundred percent claim in case of damage.
Therefore, the client himself should provide the necessary details to meet the risk and time required for the underwriting process and execution to avoid causing a dispute. This process must be fully followed. If you ask your insurer for the insurance policy and draft schedule and check whether it is in accordance with your details, you will get an opportunity to correct any wrong details in the initial stage.
Therefore, the entire underwriting process must be followed and the practice of prompt claim payment at the time of claim will ensure that the insurance system operates on the basis of good faith in the true sense.
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Ostrich insurance was introduced for the first time in Nepal about a decade ago. Since the customer was in the ostrich business, he needed ostrich insurance. For this, the insured had invested a huge amount of money and in the absence of insurance, it was certain that his entire investment would be at risk.
Bringing a new product is also a challenge in itself, especially for Ostrich. I’ve never seen an ostrich myself, but when I was in school I read that the biggest egg is an ostrich and I didn’t know anything else. I was excited when the management of the then company (Lumbini General Insurance Company Limited) decided to insure the ostrich. After this decision, I had the opportunity to join the small but active group (Head of Reinsurance, Head of Marketing Department and Head of Broker JB Boda Group) as the Head of Underwriting Department. First of all, the issue of what an ostrich is is important. A lot of research was done on this. Information was also obtained from customers. Ostrich diet, nutritional content, habitat, biosecurity arrangements, residential doctors, etc.
During this time, many types of experiences were gained. There is only one aspect that cannot be taken into account. How to re-engineer ostrich insurance, review of the arrangements in the ostrich farm, prepare the report, proposed insurance rates, conditions, mandatory excess, risk mitigation measures, initiatives for approval of ostrich insurance policy in the regulatory body, continuous discussion on the issue of ostrich damage assessment, aspects related to reinsurance, legal provisions of both countries, reinsurer’s stance that there should be juridix Singapore, objection of the customer, it is not financially feasible. The provision that the insurance policy should be in Nepali language, whether the purpose, definition, conditions of the insurance policy would remain the same while translating from English to Nepali, and the assessment of the problems that might arise in the future, no matter how much attention was paid to it, it seemed incomplete.
In the meantime, I would like to discuss here the proposal form I received from Lloyds for Ostrich. The ostrich proposal form was about 17-18 pages. Every question has to be answered. If you can’t respond, the process won’t proceed. During this time, we have been meeting with the customers many times, discussing and making sure that the arrangements are as mentioned there and if not, it took about 12 months to complete almost all the issues and finally Ostrich Insurance came into the insurance market of Nepal. It was a Leeds London insurance policy, and Ostrich Insurance was the first insurance in South Asia.
Honestly, we were fully aware that even the slightest mistake while preparing the schedule of the insurance policy can lead to controversy. However, even after the release of the ostrich insurance policy, there was a kind of fear in the mind, whether we were not paying attention to something or that there would be a dispute, that the London market is very developed, we have not made any mistake compared to us? Such questions kept coming and this fear was natural because there were no professionals to guide us for insurance, to get answers to our queries. However, Ostrich Insurance was the result of the tireless efforts of the fighting team, the support of the regulatory body and the trust of the then management, Ostrich Insurance.
Then I started preparing for another new product, credit card insurance. It was also an insurance policy for the London market. Although there were similar tasks and procedural issues while working in the lead role, I felt very comfortable because Ostrich Insurance taught me a lot and this insurance was also brought to the insurance market in Nepal.
Their insurance concepts and practices are very mature and sophisticated. No plan will proceed without insurance, no matter how accessible the customer is, or if they are capable of paying a very high premium, do not give importance to such things, but are very conscious of whether the underwriting process is complete or not.
What we have to understand and be relevant is that no matter how much inquiries and ruthlessness they showed in the initial stages, they did not ask any questions about the insurance and accepted everything and made it easy for us. Our customers were satisfied with the ostrich insurance and we were happy too. Happy in the sense that this insurance was implemented without any controversy. They gave examples of excellent insurance services. Remembering this, I still want to bow down to them. The London market didn’t develop like that. The insurance practices they do have to say that the market is the best.
While it may be unusual to compare the London market with ours, the principles and values of insurance are a global issue, so underwriting practices need to be in line with them. As we continue to follow these good practices, our insurance services are sure to become more sophisticated.
Indispensable Damage Reduction Practices
As risk patterns change, I think the mindset and process of assessing risk itself also needs to change. As we regularly experience natural disasters, man-made disasters are on the rise in the same manner.
The natural disasters and man-made disasters that we have experienced are beyond our control. However, such recent disasters need to be critically analysed as a good case study. Although both insurance and claims are cycles of insurance, case studies like these can further help in the development of the entire insurance sector.
Another context is that there should be a discussion and discussion for public awareness about what could or should be done from the point of view of insurance to reduce the damage. For example, large commercial buildings and hotels were torched. Whether there were fire extinguishers in place for this. It is necessary to raise simple but important issues such as whether these mechanisms were in an effective state, whether the staff was trained on how to control fires, or how to prepare for similar future situations. These issues can also be meaningful risk reduction practices for insurance, which are beneficial to both the insured and the insured, and can help to strike a balance between insurance and disaster management.
In the context of risk assessment, risk classifications can be made on the basis of scientific facts, experience and data evidence. According to scientists, there is evidence that the risks of natural disasters and glacier outbursts due to climate change are increasing. It also needs to pay special attention to classification.
In this regard, it is important to pay attention to risk thinking. There may be some differences in attitudes towards risk, but there may be differences among insurers because there is a difference in people’s thinking, experience, biases, expertise, skills, etc., but there needs to be equality in order to properly evaluate risk as risk.
Grievance Management Officer
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Insurance companies have arranged for a grievance hearing officer to manage any complaints related to insurance services especially for their customers. Customers can present their problems to the officer without any hesitation. These officers listen to the complaints received from the customers and take initiative to resolve them.
These activities address the customer’s dissatisfaction at the initial stage and the insurer and the insurer find a mutual solution to such dissatisfaction, so the possibility of future litigation is less likely due to such actions. This can be used to measure the satisfaction of the insured with the insurance service.
New Product
We find that the issue of innovation in insurance products is being raised time and again. The relevance of insurance will increase if new products are introduced in the insurance market according to the need of the customers to review their products, identify the needs of the customers.
In the context of a new product, everyone is feeling that the mistakes made in the last time should not be repeated, the reference is Corona Insurance. Since there has been a lot of discussion on this issue, it is not appropriate to repeat it again, but the lesson it has taught the insurance sector should always remember.
Regarding the new product, if one company has to bear the needs of the customer, the time, effort, expense, etc. of the customer to bring a new product to the market, then the other company can easily use the same product without any effort. The new product should be marketed only by the person who brought it to the market, and this issue should be related to the identity or originality of the company.
