Unhealthy Competition in Current Market

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 policy. They even don't care about the non-renewal of insurance because they are sure of getting fresh business with their high discounting and liberal underwriting policy.
This is the way they are managing loss ratios but it is surprising to see that instead of losing business their growth rate is in double figures.
This situation would continue and these companies would keep growing till brokers and clients realize that price is not the only criteria to finalize business ignoring the loss settlement history of that particular company.
Eagerly waiting to hear valuable comments from my friends and colleagues on this group.

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