Kathmandu. The general public is compelled to believe that an insurer is good no matter what the insurance company is promoting or flaunting. The reason is, there is insufficient information about the actual condition of the insurer. There’s not a standard that classifies insurers that even a layman can understand.
180 cases against domestic insurance companies are under consideration in the Insurance Board. Apart from this, non-life insurance companies have not paid crores of rupees under the Corona Insurance Scheme. Complaints of insurers selling insurance plans by showing various assurances and temptations while insuring the insured but come up with various excuses during insurance claims came as a common complaint in the nationwide interaction program conducted by the Insurance Board. Most of the complaints about non-payment of claims by insurers are about non-life insurers.
The Insurance Board has also made a public announcement to take action against the insurers especially those which create unnecessary hassles to the insured for claim settlement.
Claim Payment Ability Rating of insurer would be more effective to make the insurers responsible to their insured. In one hand it will assess the real ability of the insurer while make the consumers aware about the insurer they are about to choose. They can select the best insurer which is capable enough to entertain their claim in future. It will also enhance the quality of service delivery of insurance industry.
Credit rating agency ICRA Nepal is preparing to start a rating service on insurers’ claim payment capacity. Such a rating will make it easier for the insured to decide on the reliability of the insurer. Credit rating on insurer’s claim payment ability is still not in practice in Nepal.
ICRA has stated that it will offer the service with the approval of the Insurance Board.
”ICRA Nepal’s Rating process involves analysis of an insurer’s business fundamentals and its competitive position, and focuses primarily on the insurer’s franchise value, its management, organizational structure/ownership, and underwriting and investment strategies. Besides, the analysis includes assessment of an insurance company’s profitability, liquidity, operating and financial leverage, capital adequacy, and asset/liability management method.”