Claim Ratio in Insurance for SMEs: Meaning, Types and Why It Matters
Imagine you run a small manufacturing unit in Pune. Or an IT services company in Bengaluru. Or maybe a wholesale trading business in Delhi.
When you buy business insurance in India, you probably look at one thing first. The premium.
You compare quotes. You ask your accountant. You try to reduce cost.
That makes sense. Every rupee matters in an SME.
But here is what many business owners ignore. The claim ratio in insurance for SMEs.
You only realize its importance when a fire breaks out, stock gets damaged in transit, or a client files a liability case against your company.
At that moment, what matters is not how cheap your policy was. What matters is how the insurer handles claims.
In this article, you will understand:
• What claim ratio really means
• Different types like loss ratio in insurance, incurred claim ratio, claim settlement ratio, and combined ratio insurance
• Why it directly affects your business continuity
• How you can improve your SME insurance claims experience
Let us break it down in simple terms.
What is Claim Ratio in Insurance? Simple Explanation
Think of claim ratio like this.
Suppose an insurance company collects Rs 100 crore as premium from SMEs in a year.
Out of this, it pays Rs 70 crore as claims.
That means for every Rs 100 collected, Rs 70 goes back to customers as claim payments.
This percentage is called the claim ratio.
In simple words, claim ratio tells you how much money the insurer pays back in claims compared to the premium it collects.
It helps you understand:
• Is the insurer actually paying claims?
• Is it financially stable?
• Is it pricing policies correctly?
For SMEs, this number gives a clue about how reliable the insurer may be during tough times.
But claim ratio is not just one number. There are different types. Each tells a slightly different story.
Why Claim Ratio is Important for Indian SMEs
You may wonder. If my policy is active, why should I worry about ratios?
Because when a loss happens, cash flow becomes critical.
Cash Flow Impact
Let us say your warehouse in Bhiwandi suffers water damage during heavy rains. Your stock worth Rs 40 lakh gets damaged.
You file a claim.
If the insurer delays or disputes the claim, your working capital gets stuck. Salaries, supplier payments, EMI, all get affected.
A healthy claim environment means faster recovery.
Risk Protection
Insurance is not an expense. It is a safety net.
If the insurer’s loss ratio in insurance is too low, it may mean claims are rarely paid. That could indicate strict claim handling.
If it is too high, it may indicate financial stress.
You need balance.
Insurance Renewal
Insurers also look at your company’s claim history.
If your business shows frequent claims, your renewal premium may increase. Or terms may become stricter.
Understanding SME insurance claims performance helps you manage risk better.
Business Continuity
For SMEs, one big loss can shut operations for months.
A strong claim support system ensures you recover quickly and get back to business.
Claim ratio is not just a number. It is linked to your survival.
Types of Claim Ratios in SME Insurance
There are different types of claim ratios. Let us understand each in simple language.
Loss Ratio
Loss ratio in insurance is the most common term.
It compares total claims paid to total premium collected.
Example:
If an insurer collects Rs 200 crore in SME premiums and pays Rs 150 crore as claims, the loss ratio is 75 percent.
What does this indicate?
• A moderate loss ratio suggests balanced pricing
• A very low ratio may indicate fewer claims paid
• A very high ratio may indicate heavy claim burden
For SMEs, this gives a broad idea of how active the insurer is in paying claims.
But this is not the full picture.
Incurred Claim Ratio
Incurred claim ratio includes:
• Claims already paid
• Claims that are reported but not yet paid
Suppose an insurer has:
Rs 100 crore paid in claims
Rs 20 crore reserved for ongoing claims
Total premium collected Rs 150 crore
The incurred claim ratio becomes 120 divided by 150.
This ratio gives a more realistic picture because it includes pending liabilities.
Difference from loss ratio
Loss ratio looks at paid claims.
Incurred claim ratio looks at paid plus expected claims.
For SMEs, incurred claim ratio helps understand whether the insurer is prepared for future payouts.
If incurred claim ratio is consistently high, it may affect the insurer’s pricing in future.
Claim Settlement Ratio
This is very important when choosing an insurer.
Claim settlement ratio tells you:
Out of total claims received, how many were settled.
For example:
If 1,000 SME insurance claims were filed and 920 were settled, the claim settlement ratio is 92 percent.
Practical meaning for SMEs:
• Higher ratio suggests better track record
• Lower ratio may mean more rejections
But do not look at this number alone.
Sometimes claims are rejected due to non disclosure, wrong coverage, or missing documents.
You must combine this with policy clarity and broker guidance.
Combined Ratio
Combined ratio insurance includes:
• Loss ratio
• Operating expenses
It tells whether the insurer is making underwriting profit or loss.
If combined ratio is below 100 percent, insurer is profitable from core insurance business.
If above 100 percent, insurer pays more in claims and expenses than it collects in premium.
Why should SMEs care?
Because financially stable insurers are more likely to handle large claims smoothly.
If an insurer is constantly under pressure, claim servicing may become stricter.
What is a Healthy Claim Ratio for SMEs?
There is no perfect number.
But here is how you should think.
If claim ratio is too low, say extremely low, it may indicate very strict underwriting or heavy claim rejections.
If it is too high, it may indicate poor risk selection or financial stress.
For most lines of business insurance in India, a moderate claim ratio shows balance.
As an SME owner, focus on:
• Stability over years
• Consistent claim performance
• Transparent communication
Do not chase extreme numbers.
Balance matters more than perfection.
Common Mistakes SMEs Make While Evaluating Claim Ratio
Choosing Lowest Premium
Many SMEs only compare premium.
Insurer A offers Rs 50,000 premium.
Insurer B offers Rs 65,000 premium.
You pick the cheaper one.
But what if the cheaper insurer has weak claim servicing?
Saving Rs 15,000 today can cost lakhs during claim time.
Ignoring Settlement History
Claim settlement ratio matters.
If an insurer has history of disputes or slow processing, it affects your recovery.
Ask your broker for claim data and practical experience.
Poor Documentation
Many SME insurance claims fail due to simple mistakes:
• No stock records
• No invoices
• No proper asset list
• Delay in reporting
Even if insurer has good claim ratio in insurance for SMEs, poor documentation can cause rejection.
Not Understanding Policy Terms
If your fire policy excludes certain perils and you assume everything is covered, problems will arise.
Claim ratio cannot save you from policy gaps.
How SMEs Can Improve Their Claim Experience
- Maintain Proper Records
- Keep updated stock registers.
- Maintain purchase invoices.
- Document asset values.
During claim, paperwork decides speed.
Follow Risk Management Practices
- Install fire extinguishers.
- Maintain electrical systems.
- Use CCTV in warehouses.
Better risk management reduces frequency of claims. It also improves your profile at renewal.
- Inform Insurer on Time
Delay in reporting loss can create suspicion.
Always inform within the timeline mentioned in policy.
Even if loss seems small, notify first.
Work With Experienced Broker
A knowledgeable broker understands:
• Policy wordings
• Claim procedures
• Surveyor expectations
They act as your representative.
This is critical in large SME insurance claims.
How Mialtus Insurance Broking Helps SMEs Manage Claims Better
At Mialtus Insurance Broking, the focus is not only on selling a policy.
The process starts with understanding your business.
A manufacturing unit has different risks compared to an IT company. A logistics firm faces transit risk. A retailer faces theft and fire risk.
Risk Assessment
Before recommending business insurance in India, risks are studied carefully.
Proper risk assessment reduces future claim disputes.
Policy Comparison
Instead of looking only at premium, policies are compared on:
• Coverage
• Exclusions
• Deductibles
• Claim track record
This helps you choose insurer with stable claim performance.
Claim Support
During claim:
• Immediate intimation support
• Coordination with surveyor
• Documentation guidance
• Regular follow up
This reduces stress on business owners.
Advisory Role
You get practical advice on reducing future losses.
This improves your overall risk profile and renewal terms.
For SMEs, having the right advisor often matters more than the insurer’s advertisement.
Frequently Asked Questions
Is higher claim ratio good or bad?
It depends.
A moderately healthy claim ratio shows active claim payments. Extremely high ratio may indicate stress. Extremely low ratio may indicate strict claim handling.
Balance is key.
Does claim ratio affect renewal?
Yes.
If your own company files frequent claims, your premium may increase.
If overall market loss ratio in insurance is high for a specific segment, insurers may revise pricing.
Can insurer reject claim even if ratio is high?
Yes.
Claim settlement ratio or incurred claim ratio does not guarantee your specific claim will be approved.
If policy terms are not met, insurer can reject.
Compliance with policy conditions is essential.
What should SMEs check before buying policy?
Check:
• Coverage scope
• Exclusions
• Deductibles
• Claim settlement ratio
• Broker support
Do not rely only on premium comparison.
How often should SMEs review their insurance?
At least once a year.
Whenever there is change in turnover, asset value, or operations, update your coverage.
Conclusion
For many SME owners in India, insurance feels like a yearly formality.
Premium paid. Policy filed. Work continues.
But the real test of insurance comes during claim time.
Understanding claim ratio in insurance for SMEs gives you insight into how insurers perform when businesses need support.
Loss ratio in insurance, incurred claim ratio, claim settlement ratio, and combined ratio insurance are not just technical terms. They reflect how responsibly an insurer manages risk and payouts.
As a business owner, your goal is simple. Protect cash flow. Ensure business continuity. Recover quickly after loss.Review your current policy. Check your insurer’s claim performance. Evaluate your documentation and risk practices.
If you feel unsure, consult professionals who understand SME insurance claims in practical terms.
Mialtus Insurance Broking works closely with Indian SMEs to move them from risk to recovery with clarity and confidence.
Insurance should not be confusion. It should be confidence.
Cyber Insurance for Startups matters now more than ever. Startups rely on digital tools, cloud platforms, and customer data. These digital assets attract cyber-attacks. According to the Verizon Data Breach Investigations Report 2024, 43 percent of cyber-attacks target small businesses. This includes many startups. Startups often lack strong security controls and face urgent demands to grow fast. These factors increase their cyber risk and explain why cyber insurance has become essential. This guide explains how startups use cyber insurance for protection, what it covers, how to choose a policy, and the best providers for early stage companies.
What Is Cyber Insurance for Startups
Cyber insurance for startups is a policy that helps pay for costs when a cyber incident occurs. These incidents include data breaches, ransomware, business interruption, and legal costs. The policy helps with response actions, recovery work, and financial losses caused by attacks.
For startups, cyber insurance is both a safety net and a risk management tool. It connects important financial support with professional response resources. Startups with limited cash reserves can face major losses after an attack. Cyber insurance reduces this financial burden. It also helps startups build trust with partners, customers, and investors.
Why Startups Are Easy Targets
Startups face higher cyber risk for clear reasons. These factors also show why insurance makes sense.
• Limited security budget
• Remote teams
• Cloud systems
• Fast growth
Startups often operate with lean budgets. Security tools may be limited or delayed. Remote teams add complexity because personal devices and home networks are used. Cloud systems store important data but require proper controls. Rapid growth often means systems change fast and security planning lags behind. These issues explain why attackers focus on startups and why cyber insurance is a practical protection.
What Does Cyber Insurance Cover
Cyber insurance for startups includes specific protections. These coverages support recovery and reduce financial loss.
• Data breach response
• Legal costs
• Regulatory fines
• Business interruption
• Ransomware
Data breach response covers steps like investigation, system clean up, and notifying affected individuals. Legal costs help pay for lawyers and defines when lawsuits follow a breach. Regulatory fines can be expensive if laws like data protection rules apply. Business interruption reimbursement helps cover lost income when systems are down. Ransomware coverage pays for recovery costs, and sometimes extortion payments when justified.
Some policies also include support for social engineering losses, crisis communication, and public relations. Startups should check each coverage item carefully before buying a policy.
How Startups Use Cyber Insurance for Protection
Startups use cyber insurance in several practical ways. This extends beyond claim payments.
First, startups use cyber insurance to access professional response experts. After a breach, founders often face stress and uncertainty. The insurer’s incident response team guides actions for the first hours and days. This support reduces mistakes and speeds recovery.
Second, startups use cyber insurance to build confidence with investors. Many investors now ask about risk planning. Having a cyber insurance policy signals that the startup understands digital risk and plans ahead.
Third, cyber insurance helps protect customer trust. When customers see that a startup acts quickly and professionally after a breach, they remain loyal. This trust protects revenue and reputation.
Last, startups use cyber insurance to support compliance. Many industries now require data protection practices. Insurance helps cover regulatory costs and shows that founders take compliance seriously.
How to Choose the Right Policy
Choosing a policy requires careful comparison. Price alone is not enough.
• Check data limits
• Check ransomware coverage
• Check incident response support
Data limits should reflect the amount and type of data your startup handles. A retail startup with customer payment data needs higher limits than a small service provider. Ransomware coverage should include both payment and recovery costs. Some policies limit how much they pay for ransomware. Incident response support should be available 24 by 7, not just business hours.
Startups should also review exclusions. Some policies do not cover incidents involving third party cloud services unless specified. Ask the insurer about add ons that cover social engineering fraud and media liability. These extra coverages can prevent gaps that attackers exploit.
Coverage Comparison Table
| Coverage Area | Basic Policy | Advanced Policy |
| Data breach response | yes | yes |
| Ransomware payment | Limited | Full |
| Business interruption | Partial | Full |
| Regulatory fines | No | Yes |
| Incident response team | Limited hours | 24 by 7 support |
This table shows why startups should consider advanced coverage. Basic policies may be less costly but leave serious gaps.
Best Cyber Insurance Providers for Startups
Choosing the right provider matters. Some insurers specialize in startup risks and offer tailored support.
Mialtus insurance
Mialtus insurance offers startup friendly cyber insurance plans. Their coverage focuses on key startup risks. They provide strong incident response resources and help with claim navigation. Their policies match how startups use cyber insurance for protection.
JB Boda
JB Boda is one of India’s oldest insurance brokers. They offer customized cyber insurance solutions for startups and SMEs. Their strength lies in risk assessment support and policy structuring.
Turtlemint
Turtlemint focuses on digital insurance distribution. Their cyber insurance options are simple to compare and easy to buy. This works well for early stage startups looking for quick and affordable cyber insurance coverage without complex paperwork.
Square Insurance Brokers
Square Insurance offers startup friendly cyber insurance guidance. They focus on explaining policy terms in simple language. Their advisory model helps founders choose coverage based on real operational risk instead of marketing promises.
Ideal Insurance Brokers
Ideal Insurance Brokers provide cyber insurance solutions tailored for Indian SMEs and startups. They help startups compare multiple insurers and negotiate better coverage limits. Their experience with Indian compliance standards adds practical value.
Startups should compare quotes from these providers. Look at policy wording and incident support services, not only premiums.
Industry Risk and Cyber Threats
Some industries face higher cyber risk. For example, manufacturing startups dealing with connected systems and supply networks face frequent attacks. You can learn more about sector specific threats in the blog link Why Cyber Attacks Are Rising on SMEs in Manufacturing Industry
Healthcare tech startups handle sensitive patient data and face strict regulatory fines after breaches. Retail and ecommerce startups process payments and store customer information online. Fintech startups deal with financial data and face targeted attacks. Understanding industry risk helps startups choose the right cyber insurance coverage and limits.
Real Cost of Not Having Cyber Insurance
The cost of a cyber-attack extends beyond immediate damage. Startups face investigation costs, system rebuilds, legal fees, and customer notification costs. Downtime affects revenue directly. According to the IBM Cost of a Data Breach Report 2024, the average breach cost exceeded 3 million dollars globally. This data shows how expensive breaches can be and why cyber insurance matters for startups with limited cash reserves.
How Cyber Insurance Supports Growth
Cyber insurance supports growth in clear ways. It helps when startups seek partnerships. Many enterprises now ask startups to prove they have cyber insurance before signing integration contracts. It supports compliance with data privacy laws by covering fines and legal costs. Insurance also helps startups scale by aligning coverage with data volume. When startups plan exit events or funding rounds, having cyber insurance increases confidence for buyers and investors.
Common Mistakes Startups Make
- Choosing only low premium plans.
- Ignoring ransomware sub limits.
- Skipping incident response coverage.
- Not updating coverage after funding rounds.
These mistakes create exposure. Startups must update coverage as they grow. A static policy from founding stage may not cover new risks after product launches or customer growth.
Action Checklist for Founders
- Assess your data exposure.
- Map your revenue dependency on digital systems.
- Review past incidents in your industry.
- Compare Cyber Insurance for Startups providers.
- Read coverage details carefully.
- Ask about response time and support.
- Update policy after funding events.
Final Thoughts
Cyber insurance for startups is not about fear. It is about smart planning. Cyber risk will continue to grow as attackers automate attacks and exploit remote work trends. Startups will remain targets because they hold valuable data and often operate with limited security defenses.
Using cyber insurance for protection lets founders focus on growth while protecting cash flow and reputation. It supports investors, partners, and customers. Startups that adopt cyber insurance early build stronger foundations and reduce financial risk. Cyber insurance becomes part of a resilient business strategy in a digital world.
Manufacturing SMEs are moving through a major digital shift. Production floors now rely on automated systems, software driven supply chains, and cloud enabled platforms to run daily workflows. These tools help businesses produce faster and operate leaner. They also open new entry points for cyber threats. Many business owners still believe cybercrime targets only large enterprises. That belief no longer holds true. Attackers increasingly pursue smaller manufacturers because defences are weaker and operational data remains highly valuable. This shift explains why cyber-attacks are rising on SMEs in the manufacturing industry. Recognizing this exposure and planning for it have become essential for business continuity.
What Is Cyber Insurance?
Cyber insurance is a financial protection solution designed to help businesses recover from cyber incidents. It covers losses caused by data breaches, ransomware attacks, system failures, and cyber extortion. For manufacturing SMEs, cyber insurance acts as a safety net. It supports recovery costs that can otherwise disrupt production and drain working capital. As digital adoption grows, cyber insurance is becoming as important as property or liability insurance.
Why Cyber Attacks Are Rising on SMEs in the Manufacturing Industry
Manufacturing SMEs have become attractive targets for cyber criminals. The reason is simple. They rely on digital systems but often lack strong security frameworks. This gap creates opportunities for attackers. This explains clearly why cyber-attacks are rising on SMEs in manufacturing.
Most manufacturing SMEs now use ERP systems, cloud accounting, inventory software, and smart machinery. These systems generate and store sensitive data. This includes supplier contracts, pricing data, designs, and customer information. Attackers know that disrupting these systems can halt production within hours. This pressure makes SMEs more likely to pay ransom quickly.
Another reason why cyber-attack is rising among SMEs is limited cybersecurity awareness. Many manufacturing owners focus on physical risk. Fire, theft, and machinery breakdown receive attention. Cyber risk often remains ignored. Outdated software, weak passwords, and untrained staff increase vulnerability.
Supply chain integration also plays a role. Manufacturing SMEs connect digitally with vendors and logistics partners. A single compromised link can expose the entire network. Cyber criminals exploit these connections to move laterally across systems. This pattern has made manufacturing SMEs prime targets.
Common Cyber Threats Faced by SMEs Today;
Cyber threats are no longer complex attacks targeting only large enterprises. Simple tactics now cause serious damage. Understanding these threats helps explain why cyber-attacks are rising on SMEs.
Phishing attacks remain the most common threat. Employees receive emails that look legitimate. A single click can expose login credentials or install malware. Manufacturing SMEs often lack regular employee training. This increases success rates for attackers.
Ransomware is another major risk. Cybercriminals encrypt essential systems, demanding payment for their restoration. For a manufacturing SME, this can stop production completely. Downtime leads to missed deliveries and broken contracts. This pressure explains why cyber-attacks are rising on SMEs that depend on continuous operations.
Business email compromise is also growing. Attackers impersonate suppliers or senior managers. They trick finance teams into transferring funds. These losses are often immediate and difficult to recover.
Cloud misconfiguration is an overlooked threat. Many SMEs move to cloud platforms without proper security settings. Open access points expose sensitive manufacturing data. Cyber criminals actively scan for these weaknesses.
The Financial Impact of a Cyber Attack on an SMEs.
The financial impact of a cyber-attack extends far beyond immediate loss. This is another reason why cyber-attack are rising on SMEs. Attackers know smaller firms struggle to absorb sudden costs.
Direct costs include ransom payments, forensic investigation, and system restoration. Even a minor incident can cost several lakhs. Larger incidents can cross crores depending on downtime and data loss.
Indirect costs often hurt more. Production stoppage leads to revenue loss. Delayed deliveries damage client trust. Long standing customers may move to competitors. For manufacturing SMEs, reputation is critical and difficult to rebuild.
Legal and regulatory costs also add pressure. Data protection laws require notification and compliance. Failure to meet these obligations can result in penalties.
Studies show that many SMEs fail to recover fully after a major cyber incident. Cash flow disruption and loss of confidence create long term instability. This harsh reality reinforces why cyber-attacks are rising on SMEs. Attackers see high impact with low resistance.
Why Cyber Insurance Is Important for Manufacturing SMEs.
Cyber insurance addresses the financial shock that cyber incidents create. For manufacturing SMEs, it provides stability during crisis.
Cyber insurance supports immediate response. It helps cover investigation costs, legal advice, and technical recovery. This speeds up restoration of operations.
Business interruption coverage is especially valuable. Manufacturing relies on continuous output. Cyber insurance compensates for lost income during downtime. This protection helps maintain payroll and supplier payments.
Cyber insurance also improves preparedness. Insurers often require basic security measures. This encourages SMEs to strengthen defences before an incident occurs.
For owners, cyber insurance offers peace of mind. Knowing that financial exposure is controlled allows focus on growth rather than crisis management. As digital dependence grows, cyber insurance becomes a core risk management tool.
What Cyber Insurance Covers for SMEs.
Cyber insurance coverage addresses multiple risk areas that manufacturing SMEs face. Understanding coverage helps owners see its value clearly.
Most policies cover data breach response costs. This includes customer notification, credit monitoring, and public relations support.
Ransomware related costs are also covered. This may include negotiation support, ransom payment where legally permitted, and system recovery expenses.
Business interruption losses form a critical part of coverage. Income loss due to system downtime receives compensation. This is vital given why cyber-attacks are rising among SMEs that cannot afford long shutdowns.
Legal and regulatory costs are included in many policies. This cover defines expenses and penalties related to data protection laws.
Some policies also cover cyber extortion and digital asset restoration. Coverage varies based on risk profile and industry exposure.
How Mialtus Insurance Helps SMEs Manage Cyber Risk.
Mialtus insurance understands the unique challenges faced by manufacturing SMEs. Their approach goes beyond policy placement. They focus on risk understanding and long-term resilience.
Mialtus insurance assesses business operations in detail. This includes digital exposure, supply chain connections, and data sensitivity. This tailored approach ensures relevant coverage.
Their cyber insurance solutions align with the realities of manufacturing operations. They help SMEs select coverage that protects revenue, reputation, and continuity.
In the event of a cyber incident, Mialtus insurance supports claims handling and coordination. This reduces stress for business owners during critical moments.
By partnering with Mialtus insurance, manufacturing SMEs gain a strategic ally. This support is essential in an environment where cyber-attacks are rising on SMEs every year.
Final Thoughts for Manufacturing SME Owners:
Digital transformation has changed manufacturing permanently. Efficiency and scale now depend on technology. This dependence has also increased risk. The evidence is clear. This is why cyber-attacks are rising on SMEs across the manufacturing industry.
Ignoring cyber risk is no longer an option. Financial loss, downtime, and reputational damage can threaten survival. Cyber insurance offers a practical solution. It does not replace security controls. It strengthens financial resilience.
Manufacturing SME owners who act early gain an advantage. They protect operations, safeguard cash flow, and build trust with customers. In a high-risk digital environment, preparation defines survival. Cyber insurance, supported by the right partner, plays a critical role in that preparation.
Book a Free Cyber Risk Assessment.
Protect your cash flow, assets, and business continuity.
The Mumbai Police have arrested a 27-year-old interior designer from Haryana’s Ambala for his alleged involvement in a cyberattack on HDFC Life Insurance. The suspect reportedly collaborated with a mastermind based in Hong Kong to steal sensitive customer data and blackmail the company.
HDFC Life Insurance had reported a cyberattack that compromised confidential customer information. The breach, which occurred between November 19 and November 21, 2024, involved cybercriminals using an email address and a WhatsApp account to access sensitive policyholder data.
The stolen data included policy numbers, names, addresses, mobile numbers, and critical health information related to illnesses. The attackers initially contacted HDFC Life on November 19, threatening to release the data unless their extortion demands were met. They sent a second, escalated threat through WhatsApp shortly thereafter.
HOW BREACH WAS EXECUTED
According to the investigation, the accused entered HDFC Life’s server system under the pretence of purchasing policies. By intercepting OTPs (One-Time Passwords), they gained unauthorised access to the database. This information was shared with the Hong Kong-based hacker, who downloaded the stolen data.
The cybercriminals sent samples of the stolen data to HDFC Life via email as proof of their capabilities, demanding a ransom to prevent its public release.
COMPANY’S RESPONSE TO BREACH
HDFC Life lodged a complaint with the South Region Cyber Police, prompting a case under various sections of the BNS Act and IT Act. The company’s Associate Vice President (Legal) detailed the sequence of events in the complaint.
In a statement to stock exchanges, HDFC Life had acknowledged the breach and assured stakeholders that they had initiated a detailed investigation with cybersecurity experts.
Source: Business Standard
As the NRI homecoming season nears, many non-resident Indians (NRIs) must be revisiting their financial strategies, with life insurance emerging as a key consideration. The appeal of Indian life insurance policies is growing among NRIs, thanks to their competitive premiums, comprehensive coverage, and tax advantages.
How NRIs can buy life insurance in India
The process of purchasing life insurance in India has become more convenient for NRIs, with online platforms and flexible payment options simplifying the process. NRIs can now buy policies remotely, without having to be physically present in India.
Bajaj Allianz Life and Tata AIA Life Insurance have adapted their offerings to meet the needs of overseas customers, enabling online applications and payments via NRE (non-resident external) or NRO (non-resident ordinary) accounts.
Tata AIA Life Insurance, for example, has expanded its reach by launching life insurance products through Gujarat International FinTech (GIFT) City, India’s first international financial services centre (IFSC).
This allows NRIs to access dollar-denominated policies, helping them hedge against currency fluctuations. “NRIs can explore plans, select coverage, and customise policies from anywhere in the world,” the company noted.
Here’s a look at the process
- Policies can be purchased online, through authorised representatives, or via brokers specialising in NRI services.
- Premiums can be paid using non-resident external (NRE) or non-resident ordinary (NRO) accounts, foreign bank accounts, or even international credit cards.
- Most insurers provide digital processes for documentation and verification.
- Life Insurance companies simplify medical pre-requirements for NRIs by partnering with medical centres in over 40 countries.
Advantages of Indian life insurance policies for NRIs
Indian life insurance policies offer several benefits that make them an attractive choice for NRIs. For instance, maturity proceeds and death benefits are often tax-free under Indian tax laws, a feature that might not be available with foreign insurance policies.
Indian insurers also offer flexibility in premium payment options, allowing NRIs to pay premiums in foreign currencies through their NRE or NRO accounts.
“India continues to provide ample opportunities for robust financial planning and capital growth, through various tools including life insurance, for NRIs,” said Rajesh Krishnan, Chief Operations and Customer Experience Officer at Bajaj Allianz Life.
Krishnan added, “India offers attractive premium rates for protection plans compared to what NRIs might pay for similar policies in their country of residence. Moreover, these products — ranging from savings and wealth-building life insurance plans — offer unique features, competitive returns, and convenience.”
A look at features and facilities offered by Indian insurers
Indian life insurers provide a range of features and facilities designed to meet the unique needs of NRIs.
One of their key offerings is the ‘Life Protect Supreme’ plan, which offers comprehensive protection up to the age of 100 years.
“This plan covers death and critical illness until 100 years of age, and accidental and disability protection up to 85 years,” explained a Tata AIA spokesperson.
The policy also allows for no limits on the sum assured and a minimum sum assured of $50,000. Further, investing in an Indian rupee-denominated policy allows NRIs to shield themselves from foreign currency fluctuations.
Many NRIs prefer Indian policies for estate planning, as they can direct the proceeds to specific beneficiaries, ensuring that their estate is distributed as per their wishes.
“Indian policies provide tax benefits under the Indian Income Tax Act and GST laws, making them financially advantageous for NRIs,” said Nitin Mehta, Chief Distribution Officer and Head of Marketing at Bharti AXA Life Insurance. He further noted, “Indian life insurance policies help ensure the financial security of the policyholder’s family in India, providing peace of mind, especially in case of unexpected life events.”
Mehta added that NRIs can also benefit from flexible premium payment options and comprehensive coverage.
Sourcr: CNBC TV8
People buy general insurance to cover for emergencies so that they do not have to make out-of-pocket hefty payments. They do not just put their money in, but trust while paying premiums. However, not all claims get approved. A recent report reveals that the claim-to-settlement ratio, which shows how many claims were honoured by insurers, in 2022-23 at 86%, which is down from the 87% in FY22.
The detailed report by the Insurance Brokers Association of India (IBAI) from data presented by insurance companies reveals that claims repudiation ratio rose to 6% for general insurance, which includes coverage for motor, health, fire and marine cargo.
This is the claim rejected by an insurance company as a proportion of the total claims made by its policy buyers. Public sector insurer New India Assurance has the lowest claims repudiation ratio of 0.2%. Other big private insurers with lower rates of claims rejection are HDFC Ergo, Future Generali, Aditya Birla Health and Shriram.
Insurance watchdog IRDAI makes it mandatory for insurance companies to put out settlements and rejection data on their websites. The IBAI has collated the data from insurers and put it in a report, which could help people make informed choices about a company’s track record while buying insurance policies. In the Policyholder’s Handbook, the IBAI has classified the general insurers into four categories — Public Sector General Insurers, Large Private Sector General Insurers, Other Private Sector Insurers, and Standalone Health Insurers.
In the health insurance category too, New India Assurance came on top among the public insurers with a claim-settlement ratio of 95%. Aditya Birla Health, with a claim settlement ratio of 95%, was the best among standalone health insurers. Iffco Tokio and Bajaj Allianz were among the top large private sector general insurers with the best claims-to-settlement ratio of 90% or more, according to the IBAI handbook.
What has to be remembered in the case of health insurance is that it is combined data for group (corporate) and individual policies. Claim-rejection rates are historically lower in the case of corporate policies.
“Irdai does not give data for individual and group claims separately. Why not? Who is it protecting,” asked author-influencer Monika Halan. The real picture will emerge when separate claim-settlement data is available for individual health insurance policies. According to experts, incomplete or false disclosure, consciously or unconsciously, at the time of purchase of policies also contribute to rejection of claims.
In settling motor vehicle own-damage claims too, New India Assurance was the best public insurer with a claim-settlement ratio of 92%. Among large private sector insurers when it came to own-damage claim settlement, Royal Sundaram, Go Digit and SBI General came on top. Future Generali was the top among small insurers.
The insurance coverage, be it life or general, is low in India but the tax on insurance premiums, at 18%, is high. In India, insurance penetration is at 30%, and low in comparison to developed countries, like the US, where it is over 90%. Though there is no social security net and government medical infrastructure is rickety, the high 18% GST on insurance premiums defies logic.
Many users settle for a smaller cover due to high premiums, experts have told India Today Digital. Several reform measures are needed for the growth of the insurance industry and relief for people so that they can get better cover for themselves. Not just in terms of reduction of tax, there is a need for segregated data on claim-settlement ratios for individual and group policies for people to make an informed choice.
Source: India Today
Health insurers disallowed claims worth Rs 15,100 crore or 12.9 per cent of the total claims filed during fiscal 2023-24, according to data released by regulator Irdai. Of the total Rs 1.17 lakh crore claims under health insurance of general as well as standalone health insurers, only Rs 83,493.17 crore or 71.29 per cent were paid during the year ending March 2024.
Further, insurers repudiated claims amounting to Rs 10,937.18 crore (9.34 per cent) while outstanding claims totalled Rs 7,584.57 crore (6.48 per cent), said the annual report 2023-24 of Insurance Regulatory and Development Authority of India (Irdai).
There were about 3.26 crore health insurance claims during 2023-24 with insurers, of which 2.69 crore (82.46 per cent) claims were settled. Irdai said the average amount paid per claim was Rs 31,086. In terms of number of claims settled, 72 per cent of the claims were settled through TPAs and the balance 28 per cent of the claims were settled through in-house mechanism.
In terms of mode of settlement of claims, 66.16 per cent of total number of claims were settled through cashless mode and another 39 per cent through reimbursement mode. During the year 2023-24, general and health insurance companies collected Rs 1,07,681 crore as health, excluding personal accident and travel, insurance premium registering a growth of about 20.32 per cent over the previous year.
The general and health insurance companies had covered 57 crore lives under 2.68 crore health insurance policies, excluding policies issued under personal accident and travel insurance. At the end of March 2024, there were 25 general insurers and 8 standalone health insurers.
Public sector general insurers — New India, National and Oriental Insurance — are doing health insurance business in foreign countries. During the year 2023-24, they procured gross premium of Rs 154 crore from health, personal accident and travel insurance and covered 10.17 lakh lives.
The insurance industry covered a total of 165.05 crore lives under personal accident insurance during the last fiscal. It includes 90.10 crore lives covered under government flagship schemes — Pradhan Mantri Suraksha Bima Yojana (PMSBY), Pradhan Mantri Jan Dhan Yojana (PMJDY), and IRCTC travel insurance for e-ticket passengers.
Source: The Economic Times
Police arrest man for defrauding insurance firm of Rs 34 lakh
Kochi: A man accused of defrauding Rs 34 lakh from a private insurance company was arrested by the police here on Thursday.
The suspect, identified as Varun Kumar Nair (36), a resident of Ochira in Kollam, was apprehended on charges of cheating Niva Bupa Health Insurance Company Limited, police said.
Varun had taken a personal accident insurance policy worth Rs 25 lakh. He underwent cashless treatment amounting to Rs 3,41,995 at Valiyath Institute of Medical Science Hospital in Kollam and he claimed an additional Rs 70 lakh for pre-and post-hospitalisation expenses. After verification of bills, he was paid Rs 34 lakh by the company, police said. The fraud was orchestrated using fake invoices procured through the PharmEasy online platform, they said.
Varun allegedly placed online orders for medicines using the cash-on-delivery option, cancelled the deliveries, and used the invoices to claim reimbursements from the insurance company, officials said. He then transferred the claim amount to a different bank account, police said.
The scam came to light during an internal investigation conducted by Niva Bupa Health Insurance Manager Abdullah and their partner, Optimus Medical Service, police added.
Varun, who had been absconding after the Kerala High Court rejected his anticipatory bail plea, was tracked down and arrested by the Kochi city police. Following his arrest, he was presented in a local court, which remanded him to judicial custody, police confirmed.
Source : The Print
Canara HSBC Life Insurance has launched a brand campaign featuring actor Varun Sharma, focusing on the importance of financial planning for modern consumers. Reportedly, the campaign includes three main ad films and supporting content, showcasing scenarios where financial solutions like savings, retirement, and term plans address diverse goals.
“At Canara HSBC Life Insurance, we aim to demystify financial planning and make it approachable for everyone. Often seen as complex and overwhelming, financial planning becomes relatable and engaging through this campaign’s light-hearted yet meaningful storytelling. By showcasing real-life scenarios, we not only highlight the importance of insurance but also demonstrate how our tailored solutions empower individuals to achieve their diverse aspirations seamlessly.” Rishi Mathur, chief marketing officer and chief distribution officer- Alternate Channels, Canara HSBC Life Insurance, said.
From what is understood, the films depict relatable situations: a couple exploring savings and retirement plans, two brothers addressing financial goals through term and savings plans, and a father-son conversation on securing future generations using child and retirement plans. The campaign will roll out across digital platforms, television, and social media channels.
Shares of insurance companies took a hit on Monday, declining by as much as 6% in intra-day trading on the BSE. The downturn followed the Goods and Services Tax (GST) Council’s decision to defer discussions on reducing GST rates for life and health insurance premiums. Consequently, the existing GST rates on insurance remain unchanged.
The Council, which also postponed a decision on rationalizing taxes for 148 other items, cited the need for more time to finalize its reports. Union Finance Minister Nirmala Sitharaman, during a post-meeting briefing, explained that the Group of Ministers (GoM) is awaiting crucial inputs from the Insurance Regulatory and Development Authority of India (IRDAI) regarding insurance premium rates. Once these inputs are reviewed, the finalized reports will be submitted to the Council for further deliberation.
As a result, key insurance stocks experienced significant declines. Shares of New India Assurance Company dropped 6% to ₹200.80, while General Insurance Corporation of India slipped 3% to ₹485.55. These declines reversed some of the gains from last Friday when General Insurance Corporation surged 14% and New India Assurance rose 4% despite a sluggish market.
Other major players like ICICI Prudential Life Insurance, ICICI Lombard General Insurance, SBI Life Insurance, HDFC Life Insurance, Star Health, LIC, and Niva Bupa Health Insurance saw stock prices dip between 1% and 2%. Over the past month, life insurers such as ICICI Prudential, HDFC Life, and SBI Life have reported declines of 6% to 10%, compared to a 2% dip in the broader market index.
ICICI Securities noted that the delay in the GST Council’s decision and the lack of a clear timeline for implementation have created uncertainty, keeping insurance stocks under pressure in the short term.
Despite these immediate challenges, analysts remain optimistic about the sector’s long-term growth potential. India’s insurance penetration remains below global averages, but factors such as a significant protection gap and rising per capita income are expected to drive future growth. Additionally, the demand for credit protection products is in its early stages and is poised for expansion as retail loan penetration increases.
Experts believe that companies with a strong product mix, robust services, and extensive distribution networks will emerge as key beneficiaries in the sector. However, they caution that regulatory changes and intensified competition may pose risks to profitability in the long run.
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