In a frank comment that should put the insurance companies to shame, the Finance Secretary attacked the current insurance grievance redressal system as ‘inadequate’ and urged the industry not to betray the trust of the common man
Finance Secretary Rajiv Takru on Wednesday gave a candid speech at 16th CII Insurance Summit in Mumbai. Describing his speech as a talk from his heart, he spoke about the reality of mis-selling, grievance redressal being heavily against the common man and urging insurance companies to be fair in business practices, so that company performance comes from investments and not denial of claims. “Betrayal of trust should not happen in an industry that is based on customers buying products with trust”, he said.
Pointing to mis-selling he said that some agents may promise the moon to sell the policy. He remarked about Max Life TV ads wherein the devil unsuccessfully tries to persuade the agent to mis-sell. Mr Takru, added, “In real life, the devil always wins. There are fine prints in insurance policies and hence, we get so many complaints. Someone in the ICU of a hospital is not able to negotiate with health insurer or hospital and hence ends up paying the money. There may be claim denials or partial settlement. There is a need to rectify the system.”
According to Mr Takru, “The grievance redress system is not up to mark. I am the last man to think that having the Ombudsman in place or having grievance redressal instead of Ombudsman is going to reduce the problem. We are a poor, illiterate country and not such a country where the average common man would take recourse to legal option to resolve disputes. It is rare for a common man to stand up against corporate might. Grievance redressal is heavily built against the common man. There is a need to develop a system wherein the grievances do not arise, or if they do arise, then there is a very small percentage.”
Mr Takru gave his own example where he was mis-sold by a smooth talking Life Insurance Corporate of India (LIC) agent in 1992. He was told that the premium of Rs3,000 has to be paid for 15 years. In case of unfortunate death, his family will get Rs1 lakh. If not, then he can claim the maturity benefit of Rs1 lakh at the end of 15 years. After diligently paying premium for 15 years, to his shock he found that the maturity benefit will be paid when he turns 80 years. So, he has to wait for another 34 years after premium payment term of 15 years to get his Rs1 lakh. He says that if it can happen to a literate person, then it is surely an issue for illiterate persons.
Mr Takru suggested insurance companies should be fair as insurance is about trust. It is not business alone, but has social angle. The performance should be from investments and not based on claims denied. It is bad business which leads to betrayal of trust.
If Mr Takru wants real change, he should nudge the Insurance Regulatory and Development Authority (IRDA) to get more active. At the Moneylife Foundation’s seminar on 16 May 2012, IRDA chairman J Hari Narayan clarified that IRDA’s job is not to focus on individual complaints; but it does take up such cases on a random basis and investigates insurance companies to protect the insured. IRDA’s approach is to put systems in place and see how they work and that corrections are made whenever required, to improve processes, he had added. This is a flawed approach because wrong products and wrong selling is common.
It means individual complaints may not get solved by IRDA’s Integrated Grievance Management System (IGMS). Consumers still have to go to the insurance Ombudsman, consumer court or civil court. The advantages of Ombudsman are no cost to the insured and binding decision on insurance companies. While the insurance Ombudsman is a good option, there is often a delay in getting a hearing. It can range from six months to one year after making a complaint. In some places the Ombudsman’s post is vacant for several months. This increases the backlog of complaints.
Samsung retained the number one position in the overall mobile phone market, followed by Nokia, Apple and LG at second, third and fourth position, respectively. In mobile OS, Android garnered 79% market share to maintain its lead while Apple iOS’ share declined to 14.2%
Information technology research and advisory firm Gartner on Wednesday said, global sales of smartphones grew 46.5% to reach 225 million units while that of feature phones declined 21% to 210 million units across the world in the June quarter.
"Smartphones accounted for 51.8% of mobile phone sales in the second quarter of 2013, resulting in smartphone sales surpassing feature phone sales for the first time," said Anshul Gupta, principal research analyst at Gartner.
This is the first time that sales of smartphones exceeded that of feature phones. Worldwide mobile phone sales to end users totalled 435 million units in the second quarter of 2013, an increase of 3.6% from the same period last year, Gartner said.
Samsung maintained the number one position in the global smartphone market, with its market share reaching 31.7%, up from 29.7% in the second quarter of 2012.
The company sold 71.38 million smartphone units in the reported quarter followed by Apple, which sold 31.89 million units during the same period. Apple's market share, however, declined to 14.2% from 18.8% last year, it said.
LG Electronics sold about 11.47 million units while Lenovo's sales stood at 10.67 million units during the second quarter of 2013. Their respective market share stood at 5.1% and 4.7%.
Gartner said Asia/Pacific, Latin America and Eastern Europe exhibited the highest smartphone growth rates of 74.1%, 55.7% and 31.6% respectively, as smartphone sales grew in all regions.
Samsung retained the number one position in the overall mobile phone market too, with sales to end users growing 19% in the second quarter of 2013.
Samsung sold around 107.52 million units across the world and has a market share of 24.7% during Q2 of 2013. It is followed by Nokia, which sold 60.95 million units and has a market share of 14%. Apple and LG have 7.3% and 3.9% market share, respectively during the period.
"With second quarter of 2013 sales broadly on track, we see little need to adjust our expectations for worldwide mobile phone sales forecast to total 1.82 billion units this year", Gupta said.
In the smartphone operating system (OS) market, Android continued to increase its lead, garnering 79% of the market in the second quarter. Apple iOS remained at second position, however, its market share declined to 14.2% from 18.8%, same period last year.
Microsoft overtook BlackBerry for the first time in this segment, taking the number 3 spot with 3.3% market share in the reported period.
"While Microsoft has managed to increase share and volume in the quarter, Microsoft should continue to focus on growing interest from app developers to help grow its appeal among users," Gupta added.