- 08/02/2019 at 4:57 am #1575544EduGorillaKeymasterSelect Question Language :
Direction: Read the given passage carefully and answer the questions that follow.
India being viewed as a land of contradictions is a fairly common refrain. From bustling metropolises to lightless villages, there is a huge variance in different aspects of life. Nowhere is this variance as amply clear as it is in the insurance sector in India. Consider this, with 52 insurance companies, India’s insurance sector is one of the largest in the world in terms of volumes of money involved. And yet, insurance is yet not as pervasive in India as it should be, as only about 25 percent of the people have general insurance cover. This dichotomy of market-size and market cover is the biggest lacunae in the sector, a lacuna that the government hopes to fill through privatization. Yet, the road to FDI is fraught with many roadblocks. Successive governments have failed in opening up the sector, despite numerous attempts, leading to lot of confusion and conundrum. As a result the whole sector is in a flux. According to experts, while India’s insurance industry is no doubt growing and is poised to grow further, it is also facing profitability issues on account of distribution and operating models. It pegs the cumulative losses to private life insurers in the excess of Rs 187 billion till March 2012. Slow growth, rising costs and stalled reforms are further hindering the steady growth of this industry. Issuing insurance policy in electronic mode has been made mandatory by the Insurance Regulatory and Development Authority of India (IRDAI) from October 1, 2016. It holds for new insurance policies based on certain criteria. An e-Insurance Account (eIA) which is a lot like demat account helps you to keep all your electronic insurance policies from any insurer in electronic mode. “If a customer is purchasing an insurance policy online, it will reduce or eliminate the commission charges that are associated with the insurance agent. You can easily get the desired insurance policy at a low premium that will be more beneficial for you” says, Naval Goel, CEO Founder, PolicyX.com. Globally insurance companies are increasing investment in digital technologies, but Indian firms are lagging behind, a report said.
“Global average investment in digital technologies is increasing over the years, while the insurance industry in India is lagging, both in its level of digitalisation and its ability to realise financial returns on its digital investments,” a CII-PwC report on ‘Evolving considerations for the Indian Insurance Industry’ said. With increasing smartphone penetration and internet access, insurance companies will need to strategically adopt the technological infrastructure required to launch products that meet customer needs, it said. Moreover, leveraging low-cost digital distribution channels for sales and service is likely to play a significant role in helping insurance companies deepen market penetration, it added.
Simplification of process will also lead to some degree of uniformity in the expectations of customers in their interactions with multiple insurers, it said. Instead of all risk products, people are demanding simple one-risk cover products, which are easy to understand and allow customers to choose discrete individualised need- based covers, it added.
Which of the following is expected to make the industry more proficient?
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