Companies may be forced to curtail benefits extended to employees because of rising premium payments on corporate health insurance plans. Staff may also face restrictions on the choice of hospitals and on room rent besides having to share part of the claim burden under new co-pay clauses.

About 60% of companies in a recent survey by ICICI Lombard expected insurance premium payments to rise 5-8% annually in the next five years. Last year, premiums for health insurance increased by about 9%, without any expansion in health care benefits, the survey said. Other insurers have"Premiums for employers' health insurance policies have gone up by around 15% this year," said Renuka Kanvinde, assistant vice-president, health insurance, Bajaj Allianz. In the ICICI Lombard survey, 49% of respondents said the increase in treatment costs was their main concern. While 31% of employers said the increase was due to factors such as lifestyle changes, 20% attributed it to the complexity of diseases and treatments. Nearly 48% of employers said that costs would need to rise for any widening of benefits.

This explains why employers have been curtailing benefits and introducing restrictions in corporate health insurance over the past few years to contain claims.

"Nearly 60-70% of our corporate clients have introduced restrictions for their employees," said Kanvinde. Coverage for dependant parents, in particular, has taken a hit. "An increasing number of corporates are asking employees to pay the premiums for parental coverage," said Segar Sampathkumar, general manager, New India Assurance.

However, cutting benefits is not the only way to reduce costs, according to Sanjay Datta, chief, underwriting and claims, at ICICI Lombard. Some companies expect their employees to voluntarily take cost-containment measures.

For example, employees could be asked to visit a primary health centre - where the charges are lower - instead of visiting a hospital for minor injuries or ailments. Another way to lower costs could be to intimate the insurance company well in advance for planned surgeries.

"Early intimation gives the insurance company time to recommend hospitals and also negotiate with them," said Datta.

As premium costs rise, companies are mulling the possibility of curtailing the benefits extended to their employees under corporate health insurance plans. Some of the options under consideration are reducing the choice of hospitals, room rent and making employees share a part of their health cam costs under co-payment clauses. A recent survey done by ICICI Lombard showed that 60% of companies expect their insurance premium payments to rise by 5-8% annually over the next five years. Last year, premiums rose by 9% without any additional healthcare benefits being offered to employees. Almost 49% of corporate respondents in the ICICI Lombard survey said that rising costs of treatment were the main concern.

Motor insurance premiums are set to rise as third party motor insurance covers have undergone an increase as per regulatory guidelines release recently. Amid a scenario where inflation remains persistently high, an increase in car insurance premium further adds to the expenses. However, by adopting some simple measures, you can reduce the impact of the increase in motor insurance premiums.

• Purchase motor insurance cover online: The online medium has brought a sea change in the way we go about our purchase pattern. Today, one can save a lot by searching, comparing and purchasing online. Purchasing car insurance online can not only save money but also save your time as it reduces the time required to visit insurance company's office or relying on an agent. Insurance companies offer instant quotes as well as beneficial packages to encourage customers to buy motor insurance policy directly from their websites. You can thus compare and select a policy that meets your requirements.
• Opt for DeductiblesDeductible is an amount that you pay out-of-pocket for the occurred expenses. There are two types of Deductibles; Compulsory Deductible and Voluntary Deductible. Compulsory Deductible in motor insurance refers to the part, where you are required to pay a pre-decided amount while the insurer will pay the rest of the expense. In the case ofVoluntary Deductible, which is an additional deductible, you agree to pay a certain portion at the time of claim and in return you get an additional discount on your insurance premium. You can decide on the expense of claim that you can pay for and in the process benefit from lower premium
• Avail No Claim Bonus: No Claim Bonus (NCB) is offered to customers who have not registered claims during the preceding year of the insurance cover. NCB starts from 10% for a year of no claim and increases with each subsequent year of no claim going up to 50%. Apart from reducing your car insurance premium, the NCB discount can also be transferred to your new car when you opt to buy one. Since the premium of a new car is much higher than an old car, NCB will allow you to make considerable savings on the insurance premium of your new car.
• Installation of Anti-theft devices in your vehicle: With vehicles being vulnerable to theft, installing anti-theft devices in your vehicle can be a proven worthy. Insurance companies also encourage their customers to install anti-theft devices as a precautionary measure. Taking one step ahead, insurers now offer special discount on the insurance premium for installing such devices in cars. Therefore, if you are planning to buy a new car, opt for car with prefixed anti-theft device. You can otherwise buy these devices separately in the local market and set it in your vehicle. Moreover, if you are a member of bodies such as Automobile Association of India or Western India Automobile Association (WIAA) which are empowered under the Motor Vehicles Act, you can get special discount on insurance premium.
• Declare the correct IDV for your vehicle Insured Declared Value (IDV) refers to the depreciation applied on your vehicle over the manufacturer's selling price. It is the maximum amount that an insurance company will pay in case the vehicle needs to be replaced. However, seeking higher than reasonable IDV would result in increasing the insurance premium on the car instead of giving any benefit. Therefore, it is advisable to declare an appropriate IDV to avail some discoun
  
  Taking these simple steps is an effective way to reduce your recurring expenses on the vehicle. However, fuel consumption also causes major expense. Following speed limits, avoiding sudden braking or rapid acceleration, switching off the engine at long duration signals etc. will help you reduce fuel related expenses.
  
  So go ahead, follow these basic steps and enjoy the drive in your favorite vehicle.
• Deductibles: Most health insurance policies have a deductible clause as well. As in the case of Co-Pay, Deductible is the amount of expense that you need to pay before the insurance company will pay for the balance amount. In most cases, it is provided as a voluntary option for the insured to choose, including the amount of Deductible that you as a policy holder would be willing to pay from your own pocket. The insurance company on its part charges a lower premium to the policy holder availing a deductible.

Equipped with information on these intricacies of health insurance, you can choose a policy that will work at the time of claim settlement. Today, most insurance companies provide detailed information on health insurance policies including their features, exclusions, terms and conditions etc. You can also specifically ask for this information in case you are purchasing the policy offline through the company or agent.

So don't choose your health insurance policy merely on benefits, but look at the exclusions and policy terms as well. These may turn out to be more important during claim settlement than the policy features.

The risk management function has evolved from being regarded as a compliance function to being regarded as a business partner. This brings additional set of responsibilities and challenges. The spate of events across the globe wherein some of the highly regarded corporates, have faced a severe downturn for a plethora of reasons has highlighted the increasing need of effective enterprise risk management and corporate governance.

In the world of Volatility, Uncertainty, Complexity & Ambiguity (VUCA), Companies will not be able to protect their balance sheet and build on the theme of profitable growth, if they do not have ERM on their side. Regulators, customers, vendors, shareholders and other stakeholders expect, and very rightly so, that an organization will give them value added accretive returns, in all circumstances and the market leaders of the world have always done that. Hence, the onus to deliver is significant.

The world has increasingly seen the emergence of new risks. These new risks, be it reputation risk management, be it governance risks, be it cyber security & fraud related risks or for that matter geo political risks, have increasingly put an onus on the risk management function to continually evolve the risk management landscape and come up with risk mitigation measures which can accordingly protect an organization and build a sustainable Company, irrespective of the environment we operate it. It is challenging, but needs to be done.

Whilst there are many pre-requisites, I would like to mention three key areas which are of significant importance:-

• Risk Management is driven by the fundamental of Tone from the Top. Hence, it is extremely pivotal to ensure that every single senior management member is completely involved in the risk management process and eventually regards risk management as a key business partner to ensure long term viability of the function. The tone set by the senior management sends a strong signal to the middle management and other organizational stakeholders that risk management is being taken seriously and will be given foremost importance in assessing the overall performance and progress of the function.
  This builds a culture of risk management in the Company and gradually everybody starts taking decisions which are within the overall risk framework of the Company and every employee starts regarding himself to be a RISK MANAGER.
• The second key aspect is integration of enterprise risk management with organizational strategy. The market leaders of the world are market leaders because they seamlessly execute and build on formulated strategies. Implementation of strategies is not going to be a smooth ride every time. There will be risk factors in the internal and external environment which may impact the successful achievement of strategies. In such a scenario, if risk management is integrated with strategy and risks to implementing a strategy are assessed at the time of formulation itself, then the Company stays protected since more often than not, it is mentally prepared and has the right plans in place.
  Risk Management is equally about having Plan B in place and if a good Plan B is in place, you can be relatively certain than the organization will deliver. A good Plan B cannot be framed if the core fundamentals of risk management are not in place.
• The third critical aspect is knowing what you want as a Company. Risks will always be there and hence, not taking Risks is the biggest Risk. The other side of risk is opportunity. Losing an opportunity is equally a risk.
  Hence, to be in a position to take calculated risks, organization must have a clearly defined organizational level Risk Appetite as well as Risk Tolerance for each area of risk.
  If every stakeholder is clearly sensitized on the risk appetite and risk tolerances of the organization and its associated importance, we can be certain to see a new paradigm where the risk is understood, evaluated and mitigated right at the outset itself, in place of waiting for a thing to happen. And eventually that’s what we want – proactive risk management and not reactive risk management.

The above fundamentally requires a dynamic risk management function to continually assess the risk environment, keep undertaking regular reviews and assessments of the risk landscape and keep sensitizing stakeholders on doing the needful. If the assessment requires a change in risk appetite and risk tolerances - it is extremely important to be flexible as well to leverage on opportunities.

The Board of Directors and Risk Management Committees of organizations also derive tremendous confidence and comfort when they see a risk based culture in the organization, driven by the top management and a proactive risk management function which ensures that profitable growth is built on the core fundamentals of Effective Corporate Governance and Enterprise Risk Management

Think technology and it’s everywhere. Technology has deeply engrained itself into our personal and professional lives. What more, areas such as Artificial Intelligence (AI) are expected to create the most impact in the next few decades. Not surprisingly, such tools are being increasingly discussed in corporates at the Board level, as companies attempt to harness AI and other new age technologies to improve productivity, bring in efficiency and offer enhanced solutions to customers. Amid these developments, questions such as, will AI replace the labour force are being hotly debated around the globe. However, not everyone sees AI solely from this ‘incremental’ lens.

I have engaged with Prof. Ajay Agarwal at multiple occasions including a recent session spread over 2 days. He is the Professor of Entrepreneurship at Rotman School of Management, University of Toronto. He is also the Co-Author of a book titled ‘Prediction Machines – The Simple Economics of Artificial Intelligence’. The title of his book itself is very intriguing. One hardly speaks about technology in tandem with a field such as Economics. After all, how can a highly technical subject like AI be linked and pursued by Economists? However, Prof Agarwal along with his co-authors Joshua Gans and Avi Goldfarb pursues AI from a unique but focused lens, combining decision theory in economics with advances in prediction technologies like AI.

Further, they see AI as an enabler to human act, be it actions, outcome or most importantly, judgement. Their philosophy of AI complementing the human skill set of judgement presents a unique perspective of how this field can empower us to deliver greater impact, rather than make our skills redundant. Further, the idea of viewing AI as a Prediction tool makes it so much more versatile, to be harnessed across a wide range of industries. both from a near term perspective as well as over the long term. 

Humans have deployed their intelligence to address many problems of the present, as well as, to build solutions for the future. However, the one challenge that we humans face is our ability to predict. In fact, as the quantum of data available multiplies, our capacity to analyse it and forecast outcomes diminishes further. On the other hand, AI supported by an unlimited computational power on the cloud can analyse data faster and better. By looking at AI as a critical ‘Predictor’ component of a Canvas with the other elements complementing it, Prof Agarwal along with his colleagues introduces a more practical and useful perspective of this new age technology.  His viewpoint also enables us to better understand some of the key trade-offs in developing and implementing AI solutions in any industry.

Many businesses including ours have been deploying AI to resolve customer problems faster or to provide more efficient and convenient solutions on a 24x7 basis. However, having come across Prof Agarwal’s thought process, it makes me believe that the current set of AI applications being deployed across industries and geographies is very limited and we have merely touched the tip of the iceberg. At this point, Satya Nadella’s words come to my mind - “I definitely fall into the camp of thinking of AI as augmenting human capability and capacity”.

Corporate Social Responsibility may be a relatively newly-coined term, but India’s overtures towards the concept of ‘social responsibility’ go back more than two millennia. It was Emperor Ashoka, the ruler of much of this sub-continent in the 3rd century BCE or roughly 2,300 years ago, who had set up multiple veterinary hospitals across his kingdom.

Our journey towards Corporate Social Responsibility (CSR) started eight years ago in 2011 but the formal launch happened three years later on October 15, 2014, when the ICICI Lombard board approved of the company’s CSR policy.

Since then, ICICI Lombard has steadfastly committed itself to CSR and this forms an integral part of our activities. With an objective to proactively support socio-economic development, we have short-listed two principal areas for the CSR roadmap: Road Safety and Preventive Healthcare. Let me first explain the Road Safety project.

Road Safety is the flagship CSR activity for us. Within its ambit, we run multiple programmes. The first being Ride to Safety.

Ride to Safety

Before going into the details of the programme, let me explain the context and the importance of this initiative. In India, more than 5,000 children below the age of 14 lose their lives due to road accidents involving two-wheelers – the highest among all vehicles – every year. Scant respect for traffic rules – including not wearing helmets, driving dangerously at high speeds, and jumping red lights – are some of the main reasons behind these unfortunate yet avoidable mishaps.

In September 2015, ICICI Lombard started a unique CSR initiative ‘Ride to Safety’ – aimed at making roads safer for children riding as pillion riders on two-wheelers. The programme aimed to create a mass awareness as every individual was vulnerable to road accidents.

Towards this objective, we adopted a multi-tier strategy to raise awareness. First, we decided to co-opt children as influencers. Next, we organised road-safety related workshops for groups of children from economically weaker families, whose parents owned two-wheelers. The workshops highlighted the greater vulnerability of children in road accidents; they, for example, may get thrown over a longer distance in case of collisions – given their lighter body weight. Thus, wearing a helmet at all times was absolutely critical. In these customised direct contact programmes, we gave away proper ISI-marked helmets – especially designed for 9–13 year-olds.

We were confident that the three-way combination – of making children aware of general road-safety rules, them becoming conscious of their own vulnerability, and availability of quality helmets – would turn them into crusaders against road safety violations. We focused on the young generation as not only are children most receptive to such initiatives but also in the long-run, this will bring about a sustainable change as these children become responsible.

We also organised on-ground events, where enthusiastic parents and children on two-wheelers – all wearing helmets – participated in road rallies. We have so far organised three such on-ground events – two in Mumbai and one in New Delhi – with over 600 participants. These events were all amplified through traditional media and social mediaso as to generate awareness for this very important social cause.

Since the programme’s inception, ICICI Lombard has directly contacted over 100,000 parents and their children, and also distributed 70,000 helmets to children.

I Will Drive You Home

This endeavour, under the aegis of the Ride to Safety campaign, marks our second effort towards ensuring Road Safety. The genesis was a May 2017 survey conducted among 1,200 respondents across 10 cities, included the four metros and Bengaluru, Hyderabad, Ahmedabad, Lucknow, Indore and Chandigarh. The respondents included men and women in the 25-45-year age bracket. About 68% of these respondents admitted that they continued to drink and drive. This shocking revelation, despite well-publicised police action coupled with the ongoing and massive public awareness drive against the practice, compelled us to specifically take on the menace of drunken driving.

This campaign looked at bringing in behavioural change among urban, upwardly mobile individuals – both male and female – in the 25-45-year age bracket.

The idea of this new campaign germinated from an actual conversation with an elderly Delhi-based gentleman, Hemraj Sharma, who was lamenting the death of his 32-year-old son because of drunk and rash driving by another individual. That conversation helped us create a video, titled #IWillDriveYouHome. The video had sensitively-shot images of Mr Sharma picking up people – singles and couples, high after an alcohol-fuelled party – from popular nightspots and safely driving them home. It showed Mr Sharma, while driving, sharing the story of the accident that killed his son, urging his guests not to drink and drive. We subsequently amplified the video’s message through social media.

Next, we roped in popular Bollywood playback singer, Shaan, for a theme song, I Will Drive You Home. The song was premiered at a popular FM radio channel, Radio One, and then, amplified on social media. We subsequently hosted other singers – all social media celebrities including Shraddha Sharma, Ritu Agarwal, and Tushar Lall – to sing the cover version of the ‘I Will Drive You Home’ song at specially curated musical events. These artistes performed our theme song in addition to other popular songs at seven live events during January-February 2018. The events were organised at some of the most popular pubs and entertainment hubs in Mumbai, Bengaluru and New Delhi.

Besides singing, as per a planned script, mid-performance, the artistes typically asked fan groups to identify individuals, who were the designated ‘chauffeurs’ for the evening – as in those individuals who weren’t drinking. Once identified, these individuals were invited to come up on stage and felicitated. All of these acts were captured on video and posted across social media. Post the live gigs, artistes went on Facebook Live – asking fans to share their stories of drunken driving, people they have lost, or people they know who have lost someone. The sessions ended with ICICI Lombard’s brand messaging. We were on Facebook, Facebook Live, in addition to Twitter, Facebook, Instagram, and Snapchat.

Now, let me explain the subject of ‘preventive healthcare’; under thisprogramme, we run two campaigns – Caring Hands and Niranjali. Both these programmes have been designed with a specific intent; not only are these intertwined with the concept of ‘health and awareness’ that is integral to ICICI Lombard, but health insurance in itself is also an important component of our business. Let me elucidate the Caring Hands project now.

Caring Hands

This programme aims to improve the health of underprivileged children – especially in the area of eye-related problems. For close to eight years now, ICICI Lombard has been conducting this initiative across hundreds of schools in the country. What is really heart-warming about the project is the fact that the employees of ICICI Lombard take care of every aspect of this – from seeking a school’s permission for holding eye check-up camps to bringing in ophthalmologists and conducting the camp. Distribution of free spectacles to the needy children is also managed by the employees.

Under our CSR umbrella, we try to encourage employees to actively engage in giving back to the society. We must be doing something right because all our people, who take up roles in participating in CSR activities, come in as volunteers, and we, at ICICI Lombard, are proud to foster such thinking and drive among our employees. We constantly encourage and support such employee-volunteers year-round. Programmes such as Caring Hands demonstrate how our professional colleagues not only contribute in achieving corporate goals but also encourage non-profit humanitarian work to bring positive changes in the society.

Meticulously planned for over two months every year, the project culminates on Caring Hands Day held during the second week of December. Over the last seven years, a total of 176,000 students from more than 300schools across the country have been beneficiaries of the Caring Hands initiative. The support for the project is so over whelming that every year more than 50 per cent of the employee base gets involved – making it a truly employee-driven CSR initiative.

Here’s one more yardstick of Caring Hands’ impact: From 11,000 children-beneficiaries in 2011, the number of children who visited eye check-up camps swelled to 36,579 in 2018. Last year, the Caring Hands project was conducted at 273 schools across 104 locations in the country, and 5,583 children with poor vision received free spectacles. In terms of statistics, since its inception in 2011, the Caring Hands campaign, with the support of hundreds of volunteers, has touched the lives of more than 200,000 children in more than 300 schools over 100 locations across the country. We remain committed to enriching the lives of children through this unique endeavour.

Niranjali

This initiative, also under the preventive healthcare programme, is a direct response to a rather disturbing WHO (World Health Organisation) report that in India, about 38 million people are affected by waterborne diseases each year, of which over 75 per cent are children; 780,000 deaths are attributable to contaminated water, of which more than 400,000 can be attributed to diarrhoea alone.

Recently, ICICI Lombard decided to address this problem and thereby tackle the larger issue of lack of wellness among children. This focus was in line with our experience in the healthcare domain and expertise in initiating projects towards preventive care – especially related to wellness.

As a response to the water-related malady, we initiated workshops at select schools involving underprivileged children along with their teachers to make them aware of problems related to drinking untreated water. As the next step, we installed water-purifiers across many schools in Mumbai to ensure that these children get access to clean drinking water. An estimated 35,000 students have benefitted from this exercise and have access to clean drinking water now.

Being a conscientious corporate, ICICI Lombard has been pursuing these endeavours and is committed to do much more. We realise that all of these efforts are miniscule when compared to the major issues that we face as a country. Thus, we will go all out for stakeholder engagement towards an all-out effort to bring in greater awareness and adoption of Road Safety and Preventive Healthcare. You too can help by joining us in this journey.

*Source: Human Capital Online

India stands at an interesting juncture today. With a stable government in place, a relatively fast-growing economy and a demographic dividend to potentially benefit from over the next several years, the tailwinds aiding the economy are many. Having said this, global growth uncertainty, escalating trade wars, delayed monsoons and growth related concerns in critical sectors are some of the headwinds that can create challenges for the economy.

In this scenario, the Union budget becomes a very important platform for policymakers to demonstrate their intent to carry forward the growth agenda and address the immediate issues facing the economy. Naturally, the expectations from this event run high.

With her first budget, the hon’ble finance minister has made clear the government’s intent to continue with its inclusive and sustainable growth agenda, while adhering to fiscal discipline and eschewing flagrant populism. The budget strives to achieve the right balance in terms of introducing long term growth propellants while addressing the near-term deterrents at hand.

It clearly focuses on the critical areas, namely core infrastructure — roads, electricity, water supply etc. At the same time, it puts a lot of thrust on the enabling areas namely education, entrepreneurship, online infrastructure and technology, digital payments, ease of business, among others.

This to my mind, is the right approach showcasing foresight and long-term intent that will help India move forward on the trajectory of sustainable development. As I said earlier, we as a nation have several positives going in our favor, both from a global as well as domestic perspective.

It is high time that these catalysts are leveraged for tangible outcomes and to ensure a meaningful change in the lives of our citizens, whether they live in the cities or in the rural areas.

Looking at specific sectors, the budget clearly tries to address the key issues faced by industries such as banking and financial services, real estate etc. It provides a specific answer to the current credit-related issues being faced by the non-banking financial institutions, that risk spreading as a contagion and impacting the overall economy. Further, the move to capitalise public sector banks will help the banking industry to spur growth.

Moving ahead on its intent to make India a global hub for electric vehicles (EV), the incentives offered to those purchasing such vehicles will help drive demand in the coming years. Amid these commendable steps, it is extremely important that the government takes measures to address aspects such as building necessary infrastructure such as charging stations for EVs at reasonable cost, to ensure the success of this initiative. Further, it is important that measures are taken to address the current decline in automobile sales, something that the industry was looking forward to from this budget.

For the insurance sector, the move to allow 100% FDI for insurance intermediaries should infuse long-term capital in a vital segment of the industry, thereby aiding distribution and reach of insurance across the country.

This is a positive move that was much needed given that insurance penetration especially non-life insurance remains much below the global average, even as catastrophic events and lifestyle-related diseases are on the rise. Having said this, the absence of any direct incentives through tax benefits in segments such as home and health insurance is a disappointment.

In sum, the finance minister, in her first budget, has done a commendable job by announcing a budget that is comprehensive and long-term driven while providing immediate relief on short-term issues. Further, given that the government has a clear five year journey to look forward to, setting the tone of focusing on long-term measures is the way to go. It is important that policymakers keep taking concrete steps in this journey, so that India realises its dream of becoming a $5-trillion economy by 2024-25.

Union Budget 2019: With change of guard at the finance ministry level and the traditional briefcase giving way to ‘Bahi-khata’, the winds of change seemed to be connoting a radically different Budget. While one didn’t witness ‘out of the box’ ideas in the Budget presented on July 5, it was a statement of purpose with the intent to place the right building blocks in place to get India to the milestone of a $5 trillion economy in the next five years.

The focus of the finance minister was rightly on getting the enablers in place with emphasis on core infrastructure namely roads, electricity, water supply, etc. More importantly, the Budget laid stress on the facilitating elements—education, driving use of digital payments, promoting entrepreneurship and alleviating the fears of the startup ecosystem, etc. The fact that these mega changes are being planned while ensuring fiscal prudence and staying clear of the ‘subsidy’ path is much appreciated and says a lot about the intent of policymakers to move away from populist measures to those that will truly facilitate long-term economic development.

Alleviating pain points

At the same time, the Budget looks at alleviating the immediate pain points being faced by the economy. Non-banking financial companies (NBFCs) have faced turbulent times as defaults hit the sector hard. It was extremely critical to address this issue given the high risk of the contagion spreading across the sector and to the broader economy. The Budget has announced specific steps to address this problem. At the same time, the move to re-capitalise public sector banks will help reduce the strain on banking system. Measures such as tax incentives for affordable housing should help revive demand for the real estate industry which has otherwise been saddled with unsold inventory.

In a move that aligns with India’s intent to become a global hub for electric vehicles, the introduction of tax incentives and other benefits amounting to around `3.5 lakh should rejuvenate the electric vehicles segment.

FDI in insurance intermediaries

For the insurance industry, the move to allow 100% FDI in insurance intermediaries is a welcome step. With long-term capital getting infused in insurance intermediaries, they will be able to invest in expanding and enhancing their distribution capabilities thereby ensuring that insurance products reach the smaller towns and rural areas while effectively addressing the needs of the current customers.

The Budget ticks the right boxes on many counts; however, there are some areas where it has missed the opportunity. The auto sector has been grappling with declining demand for a while and this has accentuated in the last few months. No remedial measures were announced in the Budget to address this issue.

Similarly, the government has stayed away from providing stimulus to other sectors to improve consumer demand, adding to the risk of the Indian growth engine stuttering, at least in the short term. When it comes to insurance, the lack of incentives for critical segments such as health and home insurance is an opportunity lost.

To conclude, I believe that the Budget 2019 does well by focusing on enabling measures for India’s long-term economic progress, though it could have done more in some areas where urgent measures were needed to be taken for immediate relief.

Let’s face it, there’s no problem that a good trip can’t fix. Whether one is experiencing a burnout or is embattled with lots of pressures at work, going on a vacation will dramatically reduce all possible stresses. A study by the State University of New York at Oswego, after surveying 12,000 men states that people who go on vacation tend to reduce their overall risk of soon death by 20 percent. With the onset of summer, it’s the perfect time to plan vacations. But a safe and sound trip calls for checklists that one needs to keep in mind before stepping ahead for the trip. For instance, getting a travel insurance is the first and foremost step before planning any trips.

Imagine heading towards a trip and losing one’s baggage. Traumatic enough? But one can easily stay away from the repercussion of such uncalled experiences by simply opting for a travel insurance. Be it domestic or an international holiday, a travel insurance will ensure that nothing hinders your perfect vacation!

Here are five reasons why travel insurance is important for every holiday goer:

• Uncalled health hassles

Medical complications and health troubles can arise at any time. Hence it’s advisable to get a travel insurance. It ensures that one can avail the necessary medical attention needed in case of any unforeseen emergency during a trip. Also, travel insurance helps one avail cashless hospitalization.

• Flight cancellations and delays

Be it a natural hazard or any personal contingency like a hospitalization of the insured or close family members, one can cancel the trip and get reimburse for any nonrefundable amount from their travel insurance policy. Travel insurance  also cover trip interruption.

• Loss of luggage

Losing one’s baggage can be a traumatic experience. All the more if it contains important documents! But worry not, having a travel insurance is like having an instant help in hand, always! Whether the luggage is lost by the airline or has been stolen from the insured whilst on a trip abroad, your insurance company will be at your rescue. Even if the baggage has been delayed, you will receive a compensation for the distress.

• Emergency medical evaluations

A certain medical condition might require one to be transported to the nearby hospital. With a travel insurance in hand, bid adieu to worries about expenses. In case of emergency situations where one needs to be taken back to their country, a travel insurance takes care of that. It not just saves the insured from the hassle of having to get the evacuation arranged, it also saves the insured from the extremely high expenditure incurred in such cases!

• Misplacing passport

Losing a passport in a foreign land is a nightmare indeed. A travel insurance reimburses the charges of issuing a duplicate passport.

All in all, opting for a travel insurance policy before heading towards a trip is a calculative and preventive measure. Whether they stem from medical reasons, extreme weather conditions or personal events, travel insurance can be beneficial. To enjoy your trip without any worries and unnecessary hindrances, travel insurance is definitely the financial blessing in disguise.

ICICI Lombard General Insurance (ICICI-GI) has set up a 'virtual company' called ICICI Lombard Digital within the company to spearhead insurance services through a purely digital platform. ICICI Lombard Digital will be a specialised digital arm that cuts across the entire value-chain and leverages partnerships throughout the modern-day internet-ecosystem.

"We felt this necessitates a differentiated approach, which will help us to leverage emerging opportunities. Conventionally, our digital team was primarily a sales channel and it used to work with central departments. In the new setup, ICICI Lombard Digital will have a separate underwriter, actuary, technology, legal and compliance teams, in addition to the business team," said Sanjeev Mantri, executive director at ICICI-GI.

Inspired by the start-up culture and the wider integration of large established financial services companies with fintechs, Mantri told Business Standard that the aim of the digital arm would be to work with e-commerce companies and app-based start-up service providers, which could help "create many unconventional products to cater to this segment".

For instance, in the past few months, ICICI-GI partnered with Ola Cabs to provide a travel insurance policy for the customer's journey. For Re 1, the customer can insure their 'trip' in case of the risk of an accident or if heavy traffic causes the customer to miss a flight.

Other partnerships that ICICI-GI is working on include RedBus, Mobikwik, Happy Loans and Uber.

"To operate in the new e-commerce environment, to sell products on the fly and in sachet like formats, companies like us need to create the ability to sell products at any time, from anywhere, at the right price," he said.

The general insurer has appointed Vivek Narayanan, formerly of Lenskart, to head ICICI Lombard Digital. It will be governed by a cross-functional board, alongside ICICI-GI.

The last piece of the transition plan is to begin working at different premises, away from ICICI-GI's current head-office in Prabhadevi, Mumbai.

"Today, more than 90 per cent of our policies are processed without any paper entering our office, claims are settled through digital tools and our agents have apps for them to sell policies, but this new platform aims to improve the entire purchase journey for the B2C customer," Mantri said.

The digital transformation of ICICI-GI has taken various forms and shapes over the past ten years, from being one of the first-movers in launching online sales, email- or mobile-based customer services, chatbots and even claims settlement through apps.

But the act of setting up a separate digital arm is the first in the domestic insurance industry.

"We had to create this structure to ensure that we stand committed to our new digital partners, deliver affordable and innovative policies while ensuring the speed of delivery is much faster. We need to have a far more committed and concrete approach to our digital business. It required a re-boot of our mindset," says Mantri.

The digital arm will essentially operate as an in-house but independent insurance company underwriting policies and managing the entire customer-services through digital tools, throughout the policy term.

But, for now, the former aims to utilise the wealth of historical information available with the general insurer to improve underwriting standards and improve on simple, innovative and convenient product offerings.

*Source: Business Standard

For the last 18 years, the insurance industry has been recording 17 percent growth overall. While health and motor continue to be the leading drivers, sectors such as corporates and crops have witnessed a steady rise.
The introduction of the Ayushman Bharat scheme, launched by Prime Minister Mr. Narendra Modi will be a game changer for the people it serves, but its trust model could also prove to be more expensive in the long term in comparison to insurance.
M Saraswathy gets in conversation with Bhargav Dasgupta, MD and CEO, ICICI Lombard General Insurance to discuss the changing landscape of the insurance industry, Ayushman Bharat scheme, digitisation in the insurance space and more.

India is progressing towards being a digital economy and the insurance sector will aim at continuing to invest in technology

Insurance and technology, more popularly known as InsurTech has become a buzz word in the insurance industry on account of the growing influence of technology on various business practices or decisions of the companies forming a part of the sector.

Paper-based transactions and traditional procedures are broadly a thing of the past and technology has stormed the sector in unprecedented ways. Fintech innovations have become the order of the day and the insurance companies which score ahead on technological innovations and initiatives are likely to have a larger market share and would continue to deliver superior customer centric solutions.

A key solution focused on customer centricity has been the rising utilization of chatbots. Chatbots or robo advisors have the potential to accurately service multiple requests from various customers in a lower turnaround time. A customer needs to provide defined accurate data required for underwriting the proposal and within a short time of the data being provided, a quotation is received by the customer. Imagine the sheer convenience and experience delight for the customer, knowing that they can get what they want with a few clicks!

Another delightful experience are the claims getting settled in an expedited manner. Claim settlement requires a survey to be done, which earlier was a fairly time consuming leg of the activity. With real time vehicle damage assessment becoming possible, accurate and quicker surveys are now possible, thereby facilitating prompt settlement of claims – again a pivotal step in ensuring customer service and satisfaction.

In the healthcare space too, certain claim settlements are being automated and claim approval provided – all in a matter of 60 seconds! The industry is truly living up to its reputation of being a friend in need to the customers during their tough times and thereby ensuring that the customers see happy days once again.

The happiest individuals are those who are the healthiest as well. Technology has enabled insurance companies to engage with customers in different ways. The industry is also promoting the Prime Minister’s vision of good health by inviting customers to participate in gaming and fitness challenges within their various social and peer circles.

Through wearables, customers can monitor the cholesterol readings, blood pressure, pulse and other parameters whilst being engaged in different activities e.g. playing a certain sport or a game. This data when available to insurance firms can enable them to work along with customers to manage their health risks better.

Technology also facilitates companies to capture the driving habits of the customer such as number of miles they drive, the speed at which they drive, how quickly they brake and other key facets associated with safe driving. The insurance companies receive this information through a telematics device installed in the car which sends information to the insurance provider over wireless networks. Basis the information received, insurers can offer valuable tips to customers to ensure safe driving thereby avoiding accidents and savings in terms of insurance premium, for practicing safe driving techniques. This will increasingly prove to be a big boon to customers in times to come.

Another boon has been blockchain technology which plays a big role in the complete value chain activity through superior customer authentication, improved fraud prevention and facilitating technology led automatic underwriting for various insurance products.

Blockchain enhances customer experience by ensuring that customer authentication data is accurately verified and available in the secured distributed ledger which is utilized by the insurance players and banks. A customer can reap the benefits of operational convenience through superior use of technology.

Blockchain can also ensure quicker settlement of claims in a safe and secure manner to the customer, when an event giving rise to a claim triggers. Through technological initiatives, the claim can be settled in no time!!

Another technological initiative which leverages the blockchain network is the ‘The Internet of Things’ or more popularly known as IOT. The world of smart contracts awaits all of us! The day is not far where appliances can have their insurance policies registered, with the combination of blockchain and smart contracts being leveraged to discover and assess damages if any, to the appliances, and thereby ensure spontaneous payment of claims basis the terms and conditions of the policy. IOT is also being used in the corporate space in case of fire hydrants to ensure that prompt notifications are given with respect to the hydrant pump pressure levels and thereby avoid the occurrence of the fire peril.

Technological initiatives have played a pivotal role in advising customers on loss prevention exercises. During the insurance renewal process for solar plants and wind mills, drones are utilized to fly above the panels in case of solar plants, get an imagery of the panels and accordingly detect defects, if any, on a proactive basis. In case of wind mills, drones help to detect cracks, if any, in the blades of a wind mill and accordingly help customers and companies in avoiding a total loss scenario.

The industry is increasingly looking at offering seamless insurance services to various sectors of the economy and may extend convenience to their customers while procuring insurance through seamless integration of the technological systems. The sublime use of technology has given a big boost to the sourcing of insurance policies thereby improving overall insurance penetration.

The insurance regulator plays a key role in ensuring protection of customer interests through keeping a close watch on policy terms and conditions and claim settlement mechanisms of insurers. The regulator, in 2016, introduced norms for issuance of electronic policies, including submission of customer proposal forms through the digital mode. This was an important development for the sector. The norms have played a key role in ensuring that the insurance industry further builds upon its initiative of always having been a technology supporter and a front runner in the successful implementation of the “Digital India” movement.

A key step in the Digital India movement involves setting up of digital offices by the insurers, which goes a long way in increasing the distribution of insurance and improve insurance penetration. The use of tabs and mobile applications to sell various insurance policies enhances customer experience through superior services being available to the customers.

One thing is certain – India is progressing towards being a digital economy and keeping in perspective a long term horizon, the insurance sector will aim at continuing to invest in technology. The underlying thought behind the same is that – customer comes first and superior service standards can be ensured only through investments in technology.

Historically, the insurance industry has been slow on the innovation front. The systems and processes that are in place currently, have remained unchanged for decades and are being followed in the same way today too. This use of legacy systems have led to claims being a slow, cumbersome and time-consuming process, that is not at all pleasant for the customer and even the insurer.

But, times are changing slowly but surely as insurance companies are embracing technology in an attempt to make the claims process faster, consistent and qualitative.This step is providing a significant boost to integrated technology in insurance industry. According to market research conducted by Technavio, the global insur-tech market is expected to grow at a steady pace with a compounded annual growth rate (CAGR) of more than 10 percent by 2020.

The nature of the claims process makes certain tasks repetitive, and the outdated processes do little to improve claim turnaround times, leading to frustrated customers. Advancements are being made in the field of Artificial Intelligence (AI), and the technology holds enormous potential for disrupting the insurance industry, especially the claims process.

As of now, processing of claims is a manual and laborious affair that requires the involvement of several people and a lot of paperwork. This approach is not only time consuming and costly but is also prone to errors and inconsistencies. The introduction of artificial intelligence and machine learning, albeit on a small scale, in claims adjudication is already helping increase the efficiency of case managers and enabling them to take more informed decisions.

Machine learning makes use of intelligent algorithms that learn from historical cases and continuously evolve their understanding of the process. In the future, it is quite possible that due to machine learning, artificial intelligence systems will automatically be able to identify any discrepancies in the claims process with minimum human involvement or intervention.

Another benefit of artificial intelligence in claims processing will be fraud detection. This is a big concern for the industry globally as fraud cases cost the industry in excess of US$40 billion on an annual basis. Thanks to advancements in machine learning, instead of going through reports manually, an algorithm can be deployed which can identify particular patterns and raise a red flag before the claim is processed.

Technology is changing how claims are processed and the details captured. A leading general insurer in India, in a bid to improve claim processing time, has developed a tablet application for its field personnel. These are the people who are responsible for verifying the claim raised by a customer, and also have to collect the evidence for the same. Earlier, this process used to be done through the filling of paperwork, but now, all that the person needs to do is enter the necessary details in the tablet.

The information is then transferred in real time to the central server, ready for analysis and claims processing. This method of capturing claims reduced costs by 4-5 percent, increased customer satisfaction and reduced chances of human error. This also signifies the shift that the industry is going through: from a call and paper model to an online web/app-based model.

The adoption of technology in the claims process can be further seen in the newly introduced crop insurance scheme. Crop insurance, which is mainly led by the government’s flagship programme known as Pradhan Mantri Fasal Bima Yojana (PMFBY), has become a major product for insurers. It poses challenges to conventional assessment methods deployed by the insurers due to the sheer scale of coverage. It would take a lot of time and effort to send individual assessors to complete the task. Hence, drones are being widely used to assess yield data, determine the sown area and even estimate crop damage.

The drones are particularly useful in assessing the damage of areas which are rendered inaccessible due to any reason, including natural disasters. In 2016 when a flood damaged the crops in Beed district of Maharashtra, a drone was used to assess crop damage in areas that had been cut off.

In conclusion, it can be said that technology is now being increasingly utilised to make the insurance claims simpler, faster and more cost effective. The outdated processes are slowly being changed for the better, in view of the advancement of artificial intelligence and machine learning, among other forms of technology. Not only will this adoption of technology improve the insurance processes, but will eventually lead to a much better and smoother customer experience.

*Source: Money Control

A famous travel quote says, "It's better to see something once than hear about it a thousand times." With increasing income of middle class, low-cost travel and changing attitude towards spending, the dream of visiting the many tourist attractions are slowly becoming a reality.

Statistics say the same thing. A report from Pacific Asia Travel Association (PATA) notes that there were 18 million outbound travellers in 2014. But, with outbound travel from India growing at 15-18% annually, this number is expected to swell up considerably with UN World Tourism Organisation (UNWTO) predicting 50 million by 2020. A winter survey done by online travel company MakeMyTrip, during the Christmas-New Year holiday season last year, revealed that international travel among Indians was growing much faster than domestic travel. Not only that, the growth was partly attributed to shift in online bookings that was facilitated by deeper penetration of smartphones and cheap data.

With the rise in international travel, travel insurance is also attaining significance, though it is still a push product in India. On World Tourism Day we look at the growing need for travel insurance.

Role of technology

The penetration of the online booking medium, vast adoption of smartphones and the entry of digital natives in the working population has led insurers to think of innovative ways of selling their products. The CII-PWC report titled "Evolving considerations for the Indian Insurance Industry", released in August 2017, stated that 68% of consumers surveyed were willing to download and use and app from their insurance service provider. Smartphone apps offer a whole new way for insurers to connect with customers and enhance customer satisfaction. Nowadays, apps can be used to do almost everything that is associated with a travel insurance policy, ranging from issuance of a new plan to initiating the claims process – all at the touch of a button.

Convenience and improving the customer experience with insurance products is the focus behind such innovations. Insurers today endeavour to provide a seamless customer experience for policy booking as well as claim settlement. What earlier used to be a cumbersome and paper-intensive process is now completely paperless and hassle-free, thanks to digitalisation, Internet of Things (IoT) and big data. Insurers are looking at proactively sending prompts for customers in event of claim, thereby saving the customer the hassle of actual lodging the claim himself. Some of the covers like trip delay are exploring this concept.

Value added services

There are many other innovative ways in which technology can be used to add more value to travel insurance coverage. For example, there are systems being worked out, using which, the insurer can automatically suggest hotel bookings or the steps for policy extension, in case it detects/or anticipates a problem to happen.

Innovative covers

Apart from enhanced coverage and a better overall experience, companies offering travel insurance coverage also have to take care of the evolving tastes of Indian travellers. According to a MakeMyTrip survey, majority of Indian travellers going abroad are young, under 35 years of age. These people seek more than just a visit to known tourist attractions and want to try something new and unique. They seek experiences with a high priority on entertainment, which also explains the rise in adventure tourism to some extent. Insurers have realised the need to keep up with the trend and now offer coverage for adventure activities which were previously excluded.

Companies are also pioneering foray in the adventure travel segment. They offer coverage to specific groups that undertake adventure activities to the extreme – like providing insurance cover to climbers taking on Mount Everest. The scope of coverage extends to specific conditions that one can encounter in these circumstances, such as acute mountain sickness and even medical evacuation if something unfortunate were to happen.

"The health insurance sector has the agility to keep up with the changing risk scenario.”

Healthcare delivery is one of the key driving forces in the development process of a society, with health insurance being a critical building block. While the health insurance sector has been growing at a robust pace of more than 20 per cent CAGR over the last five years, its penetration remains relatively low at 32 per cent. Moreover, a large percentage of the insured are enrolled in government-sponsored health insurance schemes. While penetration should be bolstered by the implementation of the ensuing Ayushman Bharat (National Health Protection Scheme), retail health insurance penetration remains at just around 2 per cent.

The retail penetration challenge is being addressed through various initiatives that the health insurance industry is pursuing. Further, the insurance regulator has played a critical role in facilitating the same with interventions such as portability norms, long-term products, standardisation guidelines, protection of policyholders’ interests, lifelong renewability and so on. The recent introduction of pilot products and quick product approvals through use and-file guidelines have ensured that the health insurance sector has the agility to keep up with the changing risk scenario and customer preferences. One such case is the recent launch of cover for OPD or outpatient department-related expenses wherein the insured need not be hospitalised for more than 24 hours.

Even as efforts continue towards product development, insurers have been rightly shifting focus from being mere risk financiers to offering risk management solutions, driven by tech and uberisation. At ICICI Lombard, we have introduced solutions across customer health life cycle ranging from onsite health check-up to providing real-time risk scores, tracking customer health parameters through wearables, introducing AI-driven disease management chatbots, offering single-click access to primary care, emergency services and second opinions, and launching discovery platforms on the quality of care. As these interventions become mainstream, one can go beyond offering better solutions to incentivising customers in the form of premium reduction or additional benefits for positive health-related behaviour. Further, the next wave of technology solutions encouraging techonlogy in insurance industry, will enable deeper human interaction with data, making it possible to alert customers of upcoming risks. The transformation is not limited to data access and analytics. With InsureTech – Big Data, AI and robotic automation – solutions are being implemented across underwriting, claims and customer engagement.

While the industry undergoes a major overhaul in terms of product propositions, tech enablement and risk management practices, there remains a need for healthcare delivery collaboration among stakeholders to ensure better patient care and experience. It requires aggregation of patient information through blockchain, development of data standards, standard treatment guidelines, fraud reduction, speedier policy issuance and claim settlement. Initiatives such as Aadhar-linked digital locker and EHR standards are some steps taken by the government which are yet to be fully adopted by the ecosystem. The proposed Digital Information Security in Healthcare Act (DISHA) will ensure that checks are put in place to avoid misuse of data and enable complete visibility provided to the patient as owner.

The health insurance sector has come a long way since its inception. It needs to keep evolving rapidly to make sure that it continues to catalyse India’s inclusive growth.

The Indian general insurance sector has moved from pure insurance provider role to an advisor who helps build sustainable businesses, unfettered by any adversity. No surprise, then that the sector is expected to evolve into one of the leading contributors to economic growth in the next decade.

The Indian insurance industry is a gold mine of opportunities with tremendous business potential. The sheer volume of opportunities waiting to be exploited makes it a lucrative sector – from a business perspective as well as from an economic growth angle.

India is the second most populous nation in the world, however it accounts for under 2% of the world’s total insurance premiums. For a nation on the cusp of being a superpower, insurance is a sector which can shape the nation’s destiny by superior channelizing of insurance savings and ensuring uninterrupted growth even during adversities and calamities.

The insurance sector, today is heavily under-penetrated. Imagine being able to reach out to every single Indian. The possibilities are truly endless. The future of the industry looks bright with a higher disposable income, young insurable population, and the growing awareness of the need for protection.

The market opportunities are immense and this sector in the next decade will evolve to become one of the leading contributors to economic growth, from a global perspective. The country happens to be one of the top 20 markets in the world in terms of insurance premium volume.

The potential of the Indian insurance industry to have an exponential growth in the coming years is evident from superior distribution methodologies and channels, greater awareness of the benefits of insurance amongst the masses, tax benefit plans by the government and technological initiatives by the sector.

A spate of innovative covers and advisory services leading to comprehensive coverages being provided to corporates and individuals against a plethora of diverse and disruptive perils also reflects this unrealised potential.

Imagine being able to purchase a travel insurance policy, at just the click of a button, whilst starting your travel journey and being able to do it at extremely affordable prices too. This is just a speck in the ocean with respect to the endless growth opportunities the sector has witnessed and will continue to witness in India.

People typically associate insurance companies with indemnifying for medical bills, when admitted to a hospital. How would it be if somebody ensured you always stayed fit and healthy and never went to a hospital at all?

In place of paying hospital bills, what if somebody reimbursed your yoga class fees or gymnasium charges? This defines the new age general insurance sector – which has a strong connect with the youth and new modern thinking.

People increasingly think of ways and means to save tax. Tax benefits to citizens for insurance purchased has given a big fillip to the industry. Insurance premium payments constitute admissible deductions from income for tax payers. The sector today can provide covers to the taxpayers, which would not only protect them but also help them reduce their taxation burden.

People, over the years, would continue to witness greater disposable incomes, either from business, profession or their salaries. This would be invested in assets, thereby contributing to the need for adequate insurance covers for asset protection.

Catastrophes have always been a big risk factor for any nation as they can prove to be an obstacle to growth and cause disruption. However, the insurance industry offers the right set of covers to protect an individual against damage to property, through uniquely devised home and catastrophe insurance covers.

Businesses are protected through loss of profit covers which ensure that they are compensated for business interruptions on account of catastrophes.

On the corporate side too, the insurance industry ensures robust growth for businesses through protection of assets and indemnification for business interruption, thereby ensuring sustained economic growth as well.

The Indian non-life insurance sector has transitioned from being an insurance provider to a risk management solutions provider for corporates. The focus today has shifted from indemnifying to helping build sustainable businesses, unfettered by any adversity.

The sector provides value added risk management solutions whereby businesses are advised on mechanisms which can be adopted to foresee risks and plan for them today. The sector is playing a proactive role in terms of advising businesses on effective risk management practices, which would ensure that the business continues to stand stable.

Even from a claims indemnification perspective, the sector has introduced several digital-based initiatives such as real time inspection of loss by customers themselves, artificial intelligence being used to spool critical claims-related information to expedite the speed of processing standard claims, drones being used for inspection on a pilot basis and similar path breaking customer-focused innovations.

A spate of new regulations such as The Companies Act have placed greater focus on transparency and accountability, with greater responsibilities being placed on the Directors. With growing litigation, class action suits and stringent regulations being the order of the day, the general insurance sector has innovated and devised the Directors and Officers (D&O) liability insurance covers which protect the organization’s Directors against malicious litigation and other risks, thereby ensuring that the company is not dented on account of unforeseen events.

A new emerging and disruptive risk is that of cyber threats including ransomware incidents. Both people and organizations have suffered crippling loss of critical data and information on account of these incidents. The general insurance sector today is providing covers which would help protect and indemnify organizations and individuals, in the eventuality of the threat materializing – again a pivotal step to building sustainable businesses.

The focal point of the sector these days is being proactive and not reactive - it is one aspect to compensate organizations if a peril such as a fire or an accident occurs and another aspect altogether to ensure that a peril does not occur by advising on the right set of loss prevention and minimization programmes that the insured organization can adopt.

The end of one an era is always the beginning of another.

It is a virtual certainty that the Indian insurance industry is poised to continue its double digit growth with improved penetration of the sector in times to come and through effectively undertaking the role of being a catalyst in the growth story of the nation.

In our everyday lives, any and every action we take, has an element of risk attached to it. Take a simple action of crossing a street; something we do umpteen times in our lives from the time we can remember. This too, has various risks that can manifest themselves with varying degrees of intensity.

Risk is a pervasive but subtle concept, widely used and discussed, but not very well understood. In the world of business today, the concept of risk is very important as it is the beating heart of all decisions that we make.

Successful management of risk requires constant tackling of the known, the unknown and the unknowable risks. Understanding the nature of the differences across risk types and their comparative contribution to total earnings volatility can shed light on the portion of the risk space within an enterprise that is known and knowable and hence manageable versus unknown and therefore unmanageable risks.

Identifying an individual cause of failure for a company is often not possible. More likely than not, letdowns occur due to a combination of factors and these may, or may not, be visible to external parties during the months or years preceding failure. There is, however, one factor that appears common to most failures, and that is the adoption of poor risk management practices.

If we look at the past, financial risks have caused major blowouts wiping out billions of dollars of capital from the system and pushing people and economies into bankruptcy. The stock market crash of 1987, Asian crisis of 1997, dotcom bust of 2000, September 11 terrorist attacks, rogue trading losses at a host of international banks and insurance companies, the global financial crisis of 2008 and the recent and still fresh Euro Zone crisis are some of the notable examples of risks going out of control. They are grim reminders of the potential impact of mis-management or ignorance of risk.

Historically, many organisations have looked at risk management in a somewhat fragmented way. However, for a growing number of organisations, this no longer makes sense and they are adopting a much more holistic enterprise risk management approach.

Organisations at the forefront of risk management now have risk committees, operational risk committee, information and cyber security committees which are often chaired by a senior or board member who has overall responsibility for risk management across their organisation.

The point is that a fragmented approach no longer works. In addition, risk management has clearly moved up the agenda for the board or management committee.

At its most fundamental level, risk management involves identifying risks, predicting how probable they are and how serious they might become, deciding what to do about them and implementing these decisions. Any company that adopts an inappropriate approach to risk runs the danger of seriously damaging its business. It is important that companies understand that risk management is not an add-on but an integral part of the business.

In order for a company to be able to identify what risks it is taking and those that it is not prepared to take, it must first identify its long-term objectives and define its risk appetite and risk tolerance. Some companies have been much better than others in identifying in a concise but operational way what their business is about.

Having identified their objectives, companies should not seek to identify, say, 1001 risks. Boards of directors at both corporate and strategic business levels should focus on what they believe to be their main business risks i.e. the key risk indicators. These risks will depend on the industry.

For example, manufacturing firms would primarily face risks relating to supply chain, product safety, employee safety, intellectual property, emerging markets, third party vendors and information technology. While the banking industry would face risks which include credit, liquidity, concentration, operational and market risks. Additionally, there are a few risks which would be common among most organizations. These risks would include legal and compliance, staffing and succession planning, regulatory, informational technology and operational risks.

It is, however, important to keep in mind that while most risks for a company will remain the same (through its life), some risks will depend on the circumstances, environment and the projects undertaken at any given time.

When assessing the risks an organisation faces it is important to have the full support of the board. It is critical that they appreciate the importance and understand the benefits of risk management. The board should receive regular reports from management so that they are fully conversant with the risks identified and those which appear as more information becomes more apparent.

As with any process, the output is only as good as the input. Unless organisations have effective systems for identifying and prioritizing risks, there is a danger that they will build their controls on very shaky foundations.

Having an effective system means that people at all levels, in different parts of the organisation, are involved in determining its main risks driven by a robust risk culture and sponsorship from the leaders. Despite the apparent widespread uptake of risk management, the extent to which risk processes are actually applied is somewhat variable. Many organisations adopt a minimalist approach, doing only what is necessary to meet mandatory requirements, or going through the motions of a risk process with no commitment to using the results to influence current or future strategy.

A universally accepted method of dealing with risks is to either avoid, retain, reduce or transfer the risk. It is in the transfer of risks that insurance companies play a unique role. They take on risks that companies cannot manage. This is done through various covers offered by insurers such as ‘Contractors Plant and Machinery’, ‘Marine All Risk’, ‘Public Liability’, ‘Fire and special perils’, ‘Erection all risk’ etc. These and other insurance covers ensure that companies while having to manage risks that are intrinsic to them, can transfer some of the risks to insurers.

The core business of any insurer is that of mitigating risks that other organizations’ face in return for a premium. At ICICI Lombard GIC, we go beyond just insuring a customer; the company has an active and well entrenched risk advisory service that is offered to our customers.

This not only helps the customer understand the risks it is exposed to, but also enables them to minimize the same by implementing best practices which in turn prevents a risk phenomenon or at least reduces the probability and impact of any potential loss to the business operations the organization from a risk incident as well as reducing the premium paid by the customer.

From a health point of view too, the company has launched wellness programs which encourage customers to lead a healthier and therefore, a more productive life. This to my mind is how the management of risks requires to evolve.

*Source: CFO, The Economics Times

A team challenge to walk the talk at a health insurance company inspired Bhargav Dasgupta to take up running in 2011. As the managing director and CEO of ICICI Lombard, Dasgupta’s role in promoting wellness and inspiring the team cannot be undermined. He has so far run nine half marathons and a marathon (Berlin 2017). In an email interview, Dasgupta talks about how running helps him remain goal-oriented and be disciplined in every aspect of life. Edited excerpts:

Any leadership lessons from distance running?

As an individual, I realized that setting a big goal and announcing it publicly helps me in achieving it. Secondly, it teaches you to break down a big goal into digestible bits. Running also helps to maintain control—you learn that running too fast too early leads to burnout. It builds discipline and resilience in you. Last but not least, it makes you introspect, and, in the process, get to know yourself better.

How do you balance training and work?

Actually, I don’t treat them differently. It’s all in the mind. Whenever I travel, I ensure that I carry my running shoes. During our IPO road shows in 2017, we were staying close to the Central Park in New York and I had always been keen to run there. After day-long meetings, we folded up at 10.30pm and had a breakfast meeting at 7.30am the next day. However, I made it a point to wake up at 5.30am and fit in 1 hour in the morning for a road run.

Did you ever hit a wall? How did you get over it?

My first real challenge while running was, in fact, my first attempt at the Mumbai half marathon in January 2012. During practice, I suffered a hairline fracture and had a cast on my leg in October 2011. My doctor advised me to avoid running for some months after the cast had been removed. However, by December I felt well recovered and decided to run as I had committed to my team. During the marathon, things were going fine till around 15km, when I started experiencing cramps. However, I decided to continue running, and eventually managed to go the distance. The fact that I broke down the target into smaller milestones and kept pushing myself to achieve them one by one was the reason I could complete the run.

What impact does leading by example as a fit leader have?

As the adage goes, practice before you preach. I strongly believe in this when it comes to leading by example. We are a health insurance company and strive to partner with our customers for their health and fitness. When we take the lead in implementing ourselves what we say, that’s when our credibility will be high.

How does running influence your performance at work?

Running helps me with my general fitness levels. I feel a sense of energy and stamina through the day that lets me work long and hard. Running also brings in a sense of positivity and builds a certain level of resilience to help me navigate the ups and downs in life.

Discipline in a runner’s life is paramount. Do you think this discipline also reflects in your leadership style?

One of the critical factors behind running a successful marathon is being disciplined, and this extends to all aspects of my life, be it an individual or as a professional.

Your toughest race.

I think my first race was in fact my toughest. It was not just the pain during the run after the 15km mark but the fact that I was running a marathon for the first time in my life, that too without adequate training. As I look back, I feel really satisfied that I could complete the race in those circumstances.

*Source: Live Mint

For any major economy, industry or sector, one of the biggest influencers in recent years has been technology. The scenario for the general insurance sector is no different. As per estimates, global investments in insurtech increased dramatically from $131 million in 2011 to $2.6 billion in 2016, a growth of 1,900 per cent. This investment has driven innovation across the spectrum, be it product innovation, customer service or the core areas of risk management, underwriting etc.

Globally, thanks to technology, traditional non-life insurance offerings based on macro pooling, fixed duration covers are giving way to micro insurance solutions and covers for episodic/ short duration events. Covers such as hourly motor insurance on demand, insurance for home renters, covers for affinity groups are being introduced backed by the latest technological tools.

At the same time, customer service standards are shifting to new levels – 24x7 service through chatbots, integrated concierge and telehealth services are fast becoming main stream. Today, claims are being triggered automatically on the occurrence of events – claims due to flight delay. Insurers are thus embracing cutting edge technology to solve problems across the customer value chain.

Insurance companies in India, too, are taking advantage of the fact that young digital savvy Indians treat insurance like other financial products and services, seeking to transact and be serviced digitally. The online revolution in insurance has come a long way since 2005. Advances in analytics and machine learning capabilities are making it possible for insurers to granularly interpret consumer behaviour data, allowing them to provide personalized solutions that better meet the expectations of customers. Further, insurers are harnessing robotic process automation tools to service our customers better by reducing the time taken from quote generation to policy issuance. By utilising IoT devices in industrial corporations, insurers are mitigating risks and reducing machinery failure, preventing short circuits and more importantly, predicting large equipment failure in the workplace.

As we look ahead, we see the role of technology in the non-life insurance industry, shifting from simply offering innovative and customer friendly solutions to acting as a catalyst in the industry transformation process. For long, insurance has been a risk transfer mechanism – settling claims efficiently. However, insurers are now evolving themselves to help corporate and individual customers manage their risks better. We are already seeing examples of this in segments such as crop insurance wherein insurers are harnessing the potential of remote sensing devices to develop various indices using geo-spatial data that provide insights into crop acreage. This is enabling insurers to understand risks better and directly settle crop insurance claims. Similarly, telematics devices are letting us understand insured driving and vehicle usage patterns. The ability to capture and analyse data from different sensors and sources in real time can enable insurance providers to develop proactive prevention models. From driving alerts to equipment failure notices, they can design automated processes to more actively manage risk, in collaboration with the insured.

The next big leap for the industry would come in the form of integrating new age technological tools seamlessly to introduce solutions that go far beyond the current individual use cases. Advances in artificial intelligence will help in further understanding and segmenting risks and in reducing operational costs by providing end-to-end solutions to the customer. The insurance industry has taken rapid strides in recent times, aided by insuretech. The future is poised to be lot more exciting.

*Source: Businessworld

Summer has now set in and it is that time of the year, you put your thinking caps on and plan your next dream summer destination. Your travel itinerary is set, places to visit-things to buy, everything is sorted. Hardly anything can ever go wrong when you plan your trip to such detail, right?

Well, not if you fall sick with the local flu or miss a connecting flight or lose your passport or maybe the airline misplaces your baggage. Travel insurances are designed to tackle such situations and make sure that you have a smooth trip.

Travel insurance is not just a great idea to secure your ‘much planned’ trip, but an inexpensive one as well (if you truly consider the hassles that you might have to go through if you are not covered). You have done the hard part of planning your trip to small details and now let your travel insurance make sure that neither your time nor your money is wasted in any untoward incident.

Travelling to unknown places comes with multiple health risks. Our data suggest that roughly 12% of claims are made on accidents, and the value per claim can go up to as high as Rs 30 lakh. Next up in ‘health risk’ popularity are gastrointestinal problems, which comprises roughly 7% of our total claims with an average claim amount of Rs 1.2 lakh.

Then there are severe cases where things take an ugly turn. We are talking about scenarios where mere seconds would determine an individual’s chances of survival. Although rare, but as insurers, we are accustomed to facing this kind of situations as well. Imagine the plight of the insured and his family during such a situation, when they are stranded in a foreign country gasping for help. A typical air evacuation cost can rise up to Rs 25 lakh depending on the severity of the situation. An exhaustive travel insurance cover with proper tie-ups with foreign health agencies cannot only rescue an individual from such grave situations but also take care of the cost involved.

In the end, it doesn’t matter where you are travelling to and how much effort you have put in planning all the nitty-gritty’s, you can never really be sure that your trip goes just as you have planned. Although we hope it does, in case it doesn’t, well, let your travel insurance take care of that.

Source: DNA India

Following a historic year of fire accidents, the citizenry of India is distressed. As many as 4,790 fire mishaps were reported over the past one year in the financial capital alone, which wrecked cinema studios, dilapidated buildings, plush restaurants and illegal structures.

While illegal constructions were razed to the ground, it is still rather unclear as to the authority that would enforce the Maharashtra Fire Prevention and Life Safety Measures Act, 2006. Improper implementation of fire safety rules, flouting fire safety norms, lack of deterrents against offenders, urban planning violations, and poor awareness among citizens has made the country vulnerable to such fire mishaps.

Urban India is equipped with the latest technology including intelligent fire detection systems, sprinkler systems, hydrant systems, gas suppression systems, leak detection systems, mist systems, emergency lighting at evacuation routes and much more.

Yet even with such resources at our disposal, the resultant loss of life can only be attributed to the nonchalance of the authorities, the owners and the consumers. The onus of ensuring fire safety lies not only with the city’s administration and the government, but also with builders, architects, interior designers, individual owners of property and the end user of these facilities.

It is crucial for the commercial space owners to ensure the safety of their consumers, staff and the physical space. Thus, a no-objection certificate (NOC) is not enough for commercial entities to ensure safety. The need for a strategic evacuation plan has never been more imperative.

Strategic evacuation plans must inculcate an evacuation route, trained staff to deal with fire emergencies, evacuation routes marked by fluorescent strips and emergency exits that are never allowed to be locked.

After the recent fire incidents, various restaurants in Mumbai have started erecting displays outside their restaurants claiming to be ‘Fire compliant’. There are a set of parameters and guidelines in place for fire compliance which ought to be reviewed on a monthly basis, to ensure complete compliance.

There exists a dominant need for commercial spaces to position themselves as safety compliant platforms. As end consumers one must be cautious and aware about such crisis control activities. Unfortunately, as consumers we barely attribute any significance to fire drills. Fire drills are vital for practicing fire safety at workplace; however, a significant part of the population views it as a hindrance since it causes a complete halt of daily operations for a few minutes.

They often overlook the underlying value of fire drills, which also leads to ignorance revolving around fire accidents. Therefore, the attitude needs to undergo a massive sea change. In a situation where one encounters smoke during evacuation, the safest protocol is to stay low to the floor and keep your mouth and nose covered by a wet cloth.

In case of any fire-related emergency, it is imperative to evacuate, irrespective of how trivial the consequence may be.

Consumers should never use elevators when there is a fire emergency. Highrise residential apartments are now equipped with public open air terraces, such that even if one cannot evacuate from the high rise, they can however, take shelter in an area, where smoke cannot accumulate and cause damage to life.

Despite of all the precautions and safety measures adopted, one cannot fight with the intensity of a disaster completely and forest fire is the best example of this. Under such circumstances, you would go beyond that extra mile to ensure the safety and well being of your dear ones.

Hence, effective measures to minimise the damage caused by fire accidents can be adopted, as a mere foresight or long-term planning.

While lives lost can be reduced by being equipped with the know-how of a fire mishap; taking a fire insurance can provide you with the financial backing which becomes crucial when your property is damaged by accidents.

This policy is an indemnity contract and in the case of a fire accident, the insurance company is liable to the extent of actual loss suffered. Insurance firms appoint an independent surveyor duly licensed by the government to survey the loss and decide on the settlement amount of the loss on the basis of the claim bill and the surveyor’s report.

Therefore, even though it may appear to be a least likely event, it is imperative to have a fire insurance policy.

*Source: Money Guru India