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As we all know IRDA has introduced three new products in the market with effect from 1st April 2021. If you look at the wordings of these policies, you will find that scope of coverage is much wider than the standard fire policy. Although it is a welcome move by a regulator which favors policy holders to a great extent because it allows many add-on covers as built-in cover in the policy. Pricing of these products was left to the insurance companies who were expected to workout anticipated losses because of the widening of the scope of cover. Unfortunately, 100% discount on flexa rates is being freely allowed in the market on these products and some of the insurance companies are even willing to discount minimum Nat-cat rates in order to grab business. This is a cause of concern because the regulator was expecting at least some reasonable loading on existing rates but it appears that we all have knowingly joined a mad race once again. Let us see when a better sense would prevail amongst...

It is observed in the current market that few insurance companies are offering very competitive prices and widest possible covers at the time of underwriting to attract major clients and they succeed in converting business. In few cases they continue with expiring policy deductibles even though the loss history of the account is very bad and the competition is quoting with higher deductibles. Invariably, clients and brokers look at pricing and scope of cover ignoring the track record of claim settlement of a particular company. Unfortunately at the time of claim, these companies try their best to find out some loophole in policy and decline claims even though the independent loss assessor is satisfied and is recommending settlement of the claim. I have seen many cases where the risk was wrongly categorized by the company and the premium was paid by the client as demanded by them but the claim was repudiated on the grounds that actual operations are different than what is stated on the ...

 The latest  trend in insurance which I am observing is the demand for cosmetic and irrelevant add-on covers. I call them cosmetic because the basic purpose of demanding such covers is just to increase numbers at no additional cost in order to satisfy clients by many intermediaries. For example, Molten metal spillage cover is demanded in chemical plants which has no relevance at all. At the same time, same meaning add ons are demanded in different names. Few examples are 1. Omission to insure and Inadvertent omission. 2. Goods held in trust and Property in care and custody of insured. 3. Claims preparation cost is being asked for in material damage as well as in BI section of the policy separately with independent limits. 4. Loss minimization expenses, Fire fighting expenses are being demanded separately with separate limits although the basic policy cannot deny any amount incurred by the insured with the sole intention of minimizing the loss without any limit so long as you s...