“Phenomenal returns.” This is what an agent from a major insurance company promised this 80-year-old grandfather from Delhi in exchange for a one-time payment of Rs 3 crore ($405,000). The gentleman had taken out around twenty insurance policies for members of his family.
The mis-selling was not revealed until a year later, after company representatives began calling to collect the annual recurring bonuses worth thousands of dollars. “My father was deeply shocked. The policies had lapsed for non-payment of the recurring premium and the product he had purchased was useless,” says the victim’s son, requesting anonymity for privacy reasons. The family runs a thriving logistics business and a chain of hospitals in the capital.
After multiple attempts to get the company to return the money to no avail, the family contacted Insurance Samadhan. The three-year-old insurtech startup specializes in resolving grievances for customers who have either faced claims denials from insurance companies or received mis-sold products. It took three months, but the company recovered the money for the family.
Insurance Samadhan and others of its ilk, such as independent claims consultancy SureClaim, are part of a second wave of insurtech startups. Their predecessors as
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digitized the sale of insurance policies – a simple business model with clear possibilities for scalability and profitability.
Insurance Samadhan and SureClaim, on the other hand, operate in the grievance redress segment, which is a tangle of insurance companies, advisors, government agencies, and legal entities.
Claims resolution, and by extension, grievance resolution, is key to determining whether customers renew their policies—premiums are the bread and butter of insurance companies. According to data available from the Insurance Regulatory and Development Authority of India (IRDAI), however, policies worth $3.15 billion were not renewed in fiscal year ended March 2020.