The prime minister’s life insurance scheme for the poor has been a flop in the first year with all the underwriters incurring losses. But prospects are bright as it is drawing many new private insurerssuch as PNB MetLife and others.
Insurers are considering selling Pradhan Mantri Jeevan Jyoti Yojana scheme now after the government has changed its position on earlier claims.
“We are evaluating our options and looking forward to participating in this journey to improveinsurance penetration with our bank partners,“ said Tarun Chugh, managing director, PNB MetLife.
The PMJJY plan was launched by the prime minister last year and was positioned as a social security scheme available for a low premium of `330 a year for cover of `2 lakh. But a flurry of early claims created a viability situation last year. The government addressed the issue this year, when it decided to incorporate the exclusion period. Now, companies can reject early claims within 45 days.
Insurance companies have been seeing claims being made within 45 days of buying the policy . These were mostly suspected to be fraudulent claims. Companies did not have any evidence to show that it is fraud.“About 30-35% of the claims were reported within 45 days of issuing the policy,“ said Girish Kulkarni, managing director of Star Union Dai-ichi.
Insurance companies could not take the health report to exclude those with poor health records.These policies were sold to regular bank account holders under Jan Dhan Yojana. Around 3 crore people enrolled for the scheme. SBI Life had written premium of `200 crore under PMJJY and have paid all this as claims. “Claim experienceunder the Pradhan Mantri scheme was poor,“ said an SBI Life executive. “We expect claims to be 10-15% above premium.“
IndiaFirst Life earned premium of `68 crore while paid out almost double `104 crore as claims in the first year. “We see improvement in claims under the PMJJY program after the 45 days exclusion was brought in,“ said RM Vishakha, managing director of India First Life Insurance. “We see renewal of up to 90% but the sale of new policies have slowed down.“
Source : The Economic Times
Date : 04-10-2016