Month: April 2021

Loss reserving refers to the calculation of the required reserves for a tranche of general insurance business. It includes outstanding claims reserves.

Typically, the claims reserves represent the money which should be held by the insurer so as to be able to meet all future claims arising from policies currently in force and policies written in the past.

Methods of calculating reserves in general insurance are different from those used in life insurance, pensions and health insurance since general insurance contracts are typically of a much shorter duration. Most general insurance contracts are written for a period of one year, and typically there is only one payment of premium at the start of the contract in exchange for coverage over the year. Reserves are calculated differently from contracts of a longer duration with multiple premium payments since there are no future premiums to consider in this case. The reserves are calculated by forecasting future losses from past losses.

The reserving process can refer to different components of the process to internal or external personnel at the insurance company. The claims department is at the frontline when a claim is reported and a case reserve needs to be posted. An internal actuarial department performs work in support of the recorded loss and loss adjustment reserves (reserves) in the insurance company’s statutory financial statements. Either the internal or external appointed actuary relies on reserving methods or models to opine on a company’s Dec. 31 recorded reserves. Company management is responsible for the financial reporting process including the recording of loss and loss adjustment reserves and controls over the entire process.

One of the state insurance regulators’ primary functions is solvency regulation for which the risk-focused examination is a key tool. The primary purpose of a risk-focused examination of an insurer is “Assessing and monitoring its current financial condition and prospective solvency.” Conservatism in the recorded reserves is preferable to understated reserves when viewed in light of solvency regulations. It has been 40 years since the National Association of Insurance Commissioners (NAIC) June 1980 Plenary Session where the first formal statement of a loss reserve opinion requirement was adopted and nearly 30 years since what is now referred to as a Statement of Actuarial Opinion as required by the NAIC Property and Casualty Annual Statement Instructions was required. This Statement of Actuarial Opinion has operated as a regulatory control over the reserving process by helping to mitigate the risk of insurance company loss reserves being “too low” (deficient or inadequate) or “too high” (redundant or excessive).

Chain Ladder Method

The chain-ladder or development method is a prominent actuarial loss reserving technique. The chain-ladder method is used in both the property and casualty and health insurance fields. Its intent is to estimate incurred but not reported claims and project ultimate loss amounts. The primary underlying assumption of the chain-ladder method is that historical loss development patterns are indicative of future loss development patterns.

Methodology

According to Jacqueline Friedland’s “Estimating Unpaid Claims Using Basic Techniques,” there are seven steps to apply the chain-ladder technique:

• Compile claims data in a development triangle
• Calculate age-to-age factors
• Calculate averages of the age-to-age factors
• Select claim development factors
• Select tail factor
• Calculate cumulative claim development factors
• Project ultimate claims

Limitations

The chain-ladder technique is only accurate when patterns of loss development in the past can be assumed to continue in the future. In contrast to other loss reserving methods such as the Bornhuetter–Ferguson method, it relies only on past experience to arrive at an incurred but not reported claims estimate.

When there are changes to an insurer’s operations, such as a change in claims settlement times, changes in claims staffing, or changes to case reserve practices, the chain-ladder method will not produce an accurate estimate without adjustments.

The chain-ladder method is also very responsive to changes in experience, and as a result, it may be unsuitable for very volatile lines of business.

Bornhuetter–Ferguson Method

The Bornhuetter–Ferguson method is a prominent loss reserving technique.

Background

The Bornhuetter–Ferguson method was introduced in the 1972 paper “The Actuary and IBNR,” co-authored by Ron Bornhuetter and Ron Ferguson.

Like other loss reserving techniques, the Bornhuetter–Ferguson method aims to estimate incurred but not reported insurance claim amounts. It is primarily used in the property and casualty and health insurance fields.

Generally considered a blend of the chain-ladder and expected claims loss reserving methods, the Bornhuetter–Ferguson method uses both reported or paid losses as well as an a priori expected loss ratio to arrive at an ultimate loss estimate. Simply, reported (or paid) losses are added to a priori expected losses multiplied by an estimated percent unreported. The estimated percent unreported (or unpaid) is established by observing historical claims experience.

The Bornhuetter–Ferguson method can be used with either reported or paid losses.

Methodology

There are two algebraically equivalent approaches to calculating the Bornhuetter–Ferguson ultimate loss.

In the first approach, undeveloped reported (or paid) losses are added directly to expected losses (based on an a priori loss ratio) multiplied by an estimated percent unreported.

BF = L + ELR * Exposure (1-w)

In the second approach, reported (or paid) losses are first developed to ultimate using a chain-ladder approach and applying a loss development factor (LDF). Next, the chain-ladder ultimate is multiplied by an estimated percent reported. Finally, expected losses multiplied by an estimated percent unreported are added (as in the first approach).

BF = L*LDF*w + ELR * Exposure (1-w)

The estimated percent reported is the reciprocal of the loss development factor.

Incurred but not reported claims can then be determined by subtracting reported losses from the Bornhuetter–Ferguson ultimate loss estimate.

Insurance companies deal with large and complex claims made against policies that are sold by them. It may often take months, or even years, to settle some claims. To ensure the company reports and avoid unpleasant surprises, insurers assign a claim reserve to each incident that reflects their best estimate of the liability. The term ‘Reserve’ is defined by the amount of money earmarked for a specific purpose. Theoretically, the reserve is an amount simultaneously with interest to be earned and premiums to be paid that will exactly be equal to all of the company’s contractual commitments.

Insurance reserves: The money which is reserved by insurers for the purpose of ensuring future payments of the insured sums and insurance compensation depending on the types of insurance.

Claims Reserves

A claim reserve is an amount of money that is set aside by an insurance company or by an insurer to pay policyholders who have filed or expected to file legal claims on their policies. This reserve is also known as the ‘balance sheet reserve’. The reserve amount of money under the claim reserve is for both the type of claims i.e. for RBNS (reported but not settled) and IBNR (incurred but not reported) claims.

Voluntary reserve

Voluntary reserve refers to fiscal reserve or other liquid assets set aside by insurance companies. Voluntary reserves are surplus or additional liquid assets above the requirement that ensure the solvency (the ability of a company to meet its long-term debts and financial obligations) of the insurance agencies. The most common reason for establishing a voluntary reserve for a company is that it helps to make the company appear liquid and stable. Moreover, voluntary reserve acts as a contingency fund, that is, to meet unexpected obligations and pay future liabilities.

Loss reserve

Loss reserve is the estimation of liability of an insurance company from future claims. Typically, composed of liquid assets, loss reserve allows an insurer or insurance company to cover claims made against policies that it underwrites. These estimating liabilities may be a complicated undertaking. Insurers must take into account the span of the insurance contract, the type of insurance offered and the edges of a claim being resolved quickly. Insurers have to adjust their loss reserve calculations according to the circumstances.

When a new policy is underwritten by an insurer, it records a receivable premium and a claim obligation (which is a liability). The liability is a considered portion of the unpaid losses account, which depicts the loss reserve.

Unearned premium reserves

Unearned premium reserves (UPR) is something that appears in the liability portion of the balance sheet of an insurance company. It is a kind of technical reserve that reflects the measure of written premiums but not yet earned. The unearned premium reserve of a company may be considered as its deferred income. It is the premium corresponding to the time duration remaining of an insurance policy. This reserve is proportionate to the unexpired portion of the insurance.

Statutory Reserves

These reserves are state-mandated reserve constraints for insurance companies. By law, insurers must hold a part of their assets as either cash or temporary securities so that they will be able to make good on their claims in a timely manner. Statutory reserves for insurance corporations are measured in two different ways; a rule-based approach and a principle-based approach. The Rule-based approach basically tells insurers how much money must be kept on reserve based on standardized formulas and sets of assumptions. More recently, many states have been moving toward a principle-based approach, which gives insurers greater freedom in setting their reserves.

A claims reserve is a reserve of money that is set aside by an insurance company in order to pay policyholders who have filed or are expected to file legitimate claims on their policies. Insurers use the fund to pay out incurred claims that have yet to be settled.

People pay for insurance coverage to protect themselves against financial loss. In exchange for taking on this risk, the company offering the service charges its customers insurance premiums. An insurance premium is the amount of money an individual or business pays for an insurance policy; insurance premiums are either paid in installments monthly or semi-annually or in one upfront payment before any coverage starts.

When entering a contract with customers, an insurance company accepts any liability in the event that an adverse occurrence takes place which damages whatever it agreed to insure. Accepting liability means making a payment to the insured person when they file a legitimate claim.

Every year, insurance companies deal with claims that are filed against the policies that they sell. For example, an auto insurance policyholder who gets involved in an accident will file a claim with their insurance provider to be reimbursed for any damages made to their car.

Some claims, such as property losses due to fire, are easily estimated and quickly settled. Others, such as product liability, are more complex and may be settled long after the policy has expired.

A claims reserve is money set aside for a claim that has been reported but not settled (RBNS) or incurred but not reported (IBNR). An insurance company will assign a claims reserve to each file that fit those descriptions, reflecting its best estimate of the eventual settlement amount. The outstanding claims reserve is an actuarial estimate, as the amounts liable on any given claim is not known until settlement.

A claims adjuster is responsible for estimating the payable amount. The monetary amount of the claims reserve can be calculated subjectively, using the claims handler’s judgment, or statistically, by evaluating past data to project future losses.

Money for the claims reserve is taken from a portion of the premium payments made by policyholders over the course of their insurance contracts.

It can be difficult for insurance companies to accurately determine the amount to set aside for claims. Regular reviews help, although that does not mean that adequate funds are always allocated. Significant underestimates can come as a nasty shock to investors, eroding trust in accounting practices and weighing on company share prices.

Claims that have been incurred but not reported (IBNR) are particularly tricky to assess. For example, workers may inhale asbestos while performing their jobs but might not file a claim until after being diagnosed with an illness 20 years after the adverse event occurred.

An outstanding claims reserve is an accounting provision that is recorded as a liability on a company’s balance sheet. They are classified as liabilities because they must be settled at a future date. In other words, they are potential financial obligations to policyholders.

The claims reserve is adjusted over time as each case develops and new information is retrieved during the claims settlement process. The total amount of funds set aside for a claim is the sum of the expected settlement amount and any expenses incurred by the insurer during the settlement process, such as fees for claims adjusters, investigators, and legal assistance.

When a business suffers a loss that is covered by an insurance policy, it recognizes a gain in the amount of the insurance proceeds received. The most reasonable approach to recording these proceeds is to wait until they have been received by the company. By doing so, there is no risk of recording a gain related to a payment that is never received. An alternative is to record the gain as soon as the payment is probable and the amount of the payment can be determined; however, this constitutes a form of accrued revenue, and so is discouraged unless there is a high degree of certainty regarding the payment. If the gain is recorded prior to cash receipt, the offsetting debit to the gain is a receivable for expected insurance recoveries.

A gain from insurance proceeds should be recorded in a separate account if the amount is material, thereby clearly labeling the gain as being non-operational in nature. For example, the title of such an account could be “Gain from Insurance Claims.” Though a gain is being recorded, the likely total outcome of an insurance claim is a net loss, since the amount of such a claim is offset against the actual loss incurred, net of an insurance deductible.

It may be necessary to disclose in the financial statement footnotes the nature of the events resulting in insurance proceeds, the amount of the proceeds, and the income statement line item in which the resulting gain is recorded.

In case of loss of Profit

Insurance fraud is any act committed to defraud an insurance process. It occurs when a claimant attempts to obtain some benefit or advantage they are not entitled to, or when an insurer knowingly denies some benefit that is due. The most common schemes include premium diversion, fee churning, asset diversion, and workers compensation fraud. Perpetrators in the schemes can be insurance company employees or claimants. False insurance claims are insurance claims filed with the fraudulent intention towards an insurance provider.

Insurance fraud is an illegal act on the part of either the buyer or seller of an insurance contract. Insurance fraud from the issuer includes selling policies from non-existent companies, failing to submit premiums, and churning policies to create more commissions. Buyer fraud, meanwhile, can consist of exaggerated claims, falsified medical history, post-dated policies, viatical fraud, faked death or kidnapping, and murder.

Insurance fraud has existed since the beginning of insurance as a commercial enterprise. Fraudulent claims account for a significant portion of all claims received by insurers, and cost billions of dollars annually. Types of insurance fraud are diverse and occur in all areas of insurance. Insurance crimes also range in severity, from slightly exaggerating claims to deliberately causing accidents or damage. Fraudulent activities affect the lives of innocent people, both directly through accidental or intentional injury or damage, and indirectly by the crimes leading to higher insurance premiums. Insurance fraud poses a significant problem, and governments and other organizations try to deter such activity.

Hard vs. soft fraud

Hard fraud occurs when someone deliberately plans or invents a loss, such as a collision, auto theft, or fire that is covered by their insurance policy in order to claim payment for damages. Criminal rings are sometimes involved in hard fraud schemes that can steal millions of dollars.

Soft fraud, which is far more common than hard fraud, is sometimes also referred to as opportunistic fraud. This type of fraud consists of policyholders exaggerating otherwise legitimate claims. For example, when involved in an automotive collision an insured person might claim more damage than actually occurred. Soft fraud can also occur when, while obtaining a new health insurance policy, an individual misreports previous or existing conditions to obtain a lower premium on the insurance policy.

Types of Insurance Fraud Schemes

Sellers

• Premium diversion: An example of premium diversion is when a business or individual sells insurance without a license and then does not pay claims.
• Fee churning: When intermediaries such as reinsurers are involved. Each takes a commission that dilutes the initial premium so that there is no longer any money left to pay for claims.
• Asset diversion: The theft of insurance company assets, such as, for example, using borrowed funds to buy an insurance company and then using the acquired company’s assets to pay off the debt.

Buyers

Attempts to illegally reap funds from insurance policies by buyers can take on a variety of forms and methods. Insurance fraud with automobiles, for instance, may include disposing of a vehicle and then claiming it was stolen in order to receive a settlement payment or a replacement vehicle.

The original vehicle could be secretly sold to a third party, abandoned in a remote location, intentionally destroyed by fire, or pushed into a river or lake. If the owner sells the vehicle, they would seek to profit by pocketing the cash, and then claim the vehicle was stolen in order to receive further compensation.

Fraud prevention

1. Implement a foundational framework

A foundational framework should reflect a fraud-detection strategy that addresses such questions as: How can we check all claims for fraud but ensure fast claim processing? How can we identify fraud before a claim is paid? How can we improve fraud investigation efficiency? How can we keep track of changing fraud behaviours? How can we reduce false positive signals? And finally: What is the best approach to automate the fraud-detection process and predict the likelihood of fraud? Implementing a foundational framework enables management to make better decisions about priorities, resource deployment and investments.

A foundational framework can range from an “out-of-the-box” solution that automates the institutional knowledge of your claims professionals and enables workflow management to full social networking analysis of the parties involved in a claim. From there, insurers can add a multitude of scoring engines, third-party data captures, criminal history lookups and many other tools. An important aspect of fraud detection is having a culture in your claims staff that emphasizes the importance of recognizing, identifying and investigating suspicious claims. Empower your staff to be involved, and then the tools you deploy will function much more effectively.

2. Know the relative level of fraud potential

Knowing the relative level of fraud potential for every type of claim allows the best, and quickest, action to be taken to maximize special investigative unit (SIU) efficiency and savings. With limited resources to devote to fraud, it is important to make sure your investigations can be focused on the items that have the greatest potential for cost avoidance and successful identifications. For example, a theft claim involving the suspicious disappearance of expensive jewellery has a higher potential for being fraudulent than a stolen smartphone or laptop. Examples of common false claim schemes include deliberately destroying property and misreporting the cost of auto repairs.

3. Use data analytics to detect fraud

Fraud comes in all shapes and sizes. In general, insurance fraud can be divided into two categories: criminal fraud, which is perpetrated by professionals habitually trying to milk the system; and cultural fraud, which is a genuine claimant being opportunistic or exaggerating a claim.

Data analytics can be applied to detect fraud. By analyzing past fraud, insurers can use predictive modeling to produce what is called a “Suspicion Score,” a value for the propensity of fraud. The process works like this: Adjusters simply enter data, and claims are automatically given a Suspicion Score to indicate the likelihood that fraud has occurred. The technology behind this involves utilizing data-mining tools and applying quantitative analysis.

Even with automation and data analytics, the weakest link in fighting fraud can be your own employees. The importance of checks and balances cannot be stressed enough.

4. Continually review and rescore claims

Success in combating insurance fraud comes from persistence and good timing. Above all, apply your arsenal of tools including data analytics and predictive modeling early and often. Claims should be continuously monitored for fraud potential. As an insurance company, it is imperative that you target the right claims, at the right time, with the right tools. Luckily, predictive modeling and advanced analytics are coming into play as essential tools for fighting insurance fraud. These tools can be automated, preventing the need for hands-on manual analysis.

By continuously reviewing and rescoring claims using Suspicion Scores, insurers can detect patterns that reveal fraud. Some claims score high immediately at first notice of loss, prompting your SIU to get involved immediately. For others, high scores do not show up until after the claim has been collected.

Monitoring Suspicion Scores has been shown to be more accurate and more effective than traditional fraud-detection methods. But again, the key is to not rely solely on technology to do all of the heavy lifting human analysts are required to initiate action after the suspected fraud has been flagged, and your people must follow through with appropriate measures. This is where training employees to identify fraud becomes an important piece of the overall fraud-detection puzzle.

5. Adopt a layered approach

In the world of IT, a “layered approach” refers to using a variety of tools and technologies to tackle a challenge. In detecting insurance fraud, this means throwing the kitchen sink at the criminals, but doing it in an organized, well-considered fashion.

Fraud is a complex, multifaceted problem, and no single method can detect all fraud. Each fraud-detection method needs to be crafted to address a specific area. Different rules and indicators are needed for different types of policies and claims. Plus, fraudsters hide in multiple databases, so fraud-detection methods must search them all. Because of the complexity of fighting fraud, it is advisable to bring in outside expertise to help formulate a framework and implement the technology, tools and methods needed to deal effectively with fraud.

The modern insurance organization has a number of technology tools at its disposal to detect fraud. For example, videos, photos and even livestreaming can be used to document evidence at a car crash or crime scene. It’s difficult for the average person to fake a video, especially when the device’s location access is turned on. A virtual gold mine lies within unstructured data, and it is imperative to collect, organize, index and mine the data to detect fraud. Always remember: You can’t claim what you can’t prove.

6. Revise based on market conditions

Criminals are ever resourceful, so always be ready to quickly adapt to changes in the ways fraud is undertaken, as well as changes in your industry. For example, professional criminals are sophisticated enough to become familiar with the analytical approaches that insurance companies use to detect fraud, and to change their tactics when committing fraud. As fighting fraud becomes more proactive, insurers must spot new fraud trends early and take steps to stay ahead of the bad guys.

Your everyday policyholders may also try to be more creative with their insurance claims when the economy is in a down cycle. Keep your claims staff aware of the type of market conditions the policyholders are facing so the staff can be on the lookout for new and inventive fraud attempts that may be unknown to the software in place.

Hard Insurance market

A hard insurance market is characterized by a high demand for insurance coverage and a reduced supply. Insurers impose strict underwriting standards and issue a limited number of policies. Premiums are high and insurers are disinclined to negotiate terms.

In a hard market, there’s less desire for growth and more of a restriction in the marketplace as insurance companies re-evaluate their books of business, their risk appetites, and how much capacity they want to present in the marketplace. In hard market conditions, underwriters often adhere to stricter standards in an attempt to correct any adverse loss ratios developed during soft market conditions. As a result, insurance rates often go up, the amount of limit carriers are willing to provide decreases, and the number of players in the market restricts. This makes it harder for insureds and their agents to find coverage options, which means the carriers that are offering coverage can push up their rates.

• Catastrophic property insurance (California)
• Trucking
• Financial institutions insurance

Factors contributing to a hard market may include:

• Economic downturn/uncertainty.
• Financial market volatility.
• Shrinking insurance capital/decreased competition.
• Catastrophic events / Increased claim activity.
• Global events (e.g., pandemic, climate change, etc.).

Soft insurance market

A soft insurance market is the opposite of a hard one. When the market is soft many insurers are competing for business and premiums are generally low. Insurers relax their underwriting standards and coverage is widely available. Underwriters are generally flexible and willing to negotiate coverage terms. Broad coverage is available with some extensions available for free.

In soft market conditions, insurance organizations often try to expand their market share. They enter growth mode, targeting prospects with cheap rates, attractive policy terms, and, when allowed, discounted coverage. In the most extreme cases (seen more so in less regulated markets around the world), the soft market resembles a bidding war, with everyone chiming in last minute to offer the cheapest deal on a risk. With all this buzz, insureds and their supporting brokers are encouraged to shop around, and as more companies move their business to insurance carriers with lower rates, the profits for the entire industry start to reduce. On top of that, when focusing on growth and price-driven risk transfer, insurers sometimes let slip on stringent underwriting, meaning loss ratios also start to rise. At some point, a correction to this unsustainable situation (reduced profits and rising loss ratios) is necessary and the market starts to harden.

Factors contributing to a soft market may include:

• Active, growing economy.
• Positive interest rate environment.
• Low/favorable claims activity.
• Abundant capital to insure.
• Strong policy holder surplus.

Examples of current soft markets include:

• Workers’ compensation
• Cyber

Rating determining the amount of premium to be paid to insure or reinsure a risk. Guaranteed cost rates are fixed during the policy period. Loss sensitive rates are those that can be adjusted after the end of a policy period, based upon the insured’s actual loss experience.

Rated premium insurance is a policy that is the same as other policies but its rate is higher than the standard premium rate. When an insurance provider issues a rated policy, it means the underwriter has determined that the applicant presents a greater risk and therefore has a higher probability of filing a claim. The result of this risk is an additional premium.

The higher premium is the only thing that differentiates rated policies from non-rated policies. All the benefits remain the same and are not affected by the rating. Most types of insurance such as disability, life, health and long-term care have rated insurance policies.

Generally, ratings are made during the pre-qualification process. However, if an applicant was not adequately pre-qualified, he or she may receive an unexpected rating when the underwriter uncovers pertinent information that was not given by the applicant or the broker during the pre-qualification process.

In certain instances, the underwriter discovers information in the applicant’s medical records or new findings based on the lab results of an insurance medical exam that affects his or her rating. Unexpected ratings may also be given if new information surfaces during the formal underwriting process.

Different insurance companies have varying rating criteria. It is possible to get different classifications from different insurance companies. Getting multiple quotes for the client is also a good strategy because two comparable providers may interpret the client’s medical history differently.

The producer could recommend companies that use more liberal underwriting to avoid getting a rated policy or at least lower the rating. Some providers offer more competitive premiums for specific risks as well.

In addition, rated premium insurance may not be permanent. In some cases the insurance company will offer to remove the rating if the risk no longer exists. For example, the client stops engaging in high risk sports activities or has switched to a less dangerous job.

If the risk is due to a non-permanent health condition, the rated policy may be reduced or eliminated after the client shows good health and is symptom-free for a specified period. Quitting smoking may also have a beneficial effect on the cost of premium eventually since companies often offer lower rates to nonsmokers. Losing weight and adopting a healthy lifestyle may also favorably affect the client’s rating.

If the risk is due to alcoholism, the client may be upgraded to a standard policy if he or she remains alcohol-free and is in good health after five years of undergoing treatment from a rehabilitation center.

Long-Term Insurer Financial Strength Ratings

Short-Term Insurer Financial Strength Ratings

Insurance Premiums

An insurance premium is the amount of money an individual or business pays for an insurance policy. Insurance premiums are paid for policies that cover healthcare, auto, home, and life insurance.

Once earned, the premium is income for the insurance company. It also represents a liability, as the insurer must provide coverage for claims being made against the policy. Failure to pay the premium on the part of the individual or the business may result in the cancellation of the policy.

An insurance premium is the amount of money an individual or business pays for an insurance policy. Insurance premiums are paid for policies that cover healthcare, auto, home, and life insurance.

Once earned, the premium is income for the insurance company. It also represents a liability, as the insurer must provide coverage for claims being made against the policy. Failure to pay the premium on the part of the individual or the business may result in the cancellation of the policy.

General insurance or non-life insurance policies, including automobile and homeowners policies, provide payments depending on the loss from a particular financial event. General insurance is typically defined as any insurance that is not determined to be life insurance. It is called property and casualty insurance in the United States and Canada and non-life insurance in Continental Europe.

Different types of General Insurances in India:

• Health Insurance

The Health Insurance cover from Digit offers protection for the medical expenses incurred due to hospitalization caused because of an accident or illnesses.

Although every policy is different, based on who it’s being purchased for, it mainly covers:

• Accidental Hospitalization (pre & post)
• Accidental illness and hospitalization
• Daycare procedures
• Psychiatric Support
• Annual Health Checkups
• Daily Hospital Cash

• Travel Insurance

Travel Insurance covers your financial liability, if any, when you travel within or beyond the Indian boundaries. The financial liability may arise due to medical or non-medical emergencies.

The duration of the travel for one time can be 180 days at the maximum. The policyholder can take more than one trip in a year. Your Travel Insurance will cover:

• Loss of Baggage
• Loss of Passport
• Hijacking
• Medical Emergencies
• Delayed Flights
• Accidental Deaths
• Adventure Sports

• Motor Insurance

Motor Insurance can be divided into two groups, two and four wheeled Vehicle insurance.

A Motor Insurance Policy is mandatory to be able to drive legally in India. Broadly there are two types a) Third-Party Liability b) Comprehensive Package Policy.

A Third-Party Policy covers for losses faced in a situation where your vehicle damages any third-party such as a public property, person or third-party vehicle. The same is the minimum requirement to be able to drive legally in India, as stated by the Motor Vehicles Act.

A Comprehensive Package Policy covers both third-party damages and liabilities and damages/losses caused to you and your own vehicle. The losses may arise due to an accident, theft, fire, natural calamities, and others.

Digit Insurance provides some add-ons under its Comprehensive Package Policies for Cars and Bikes that act as additional shields to your vehicle, such as:

• Tyre Protect Cover
• Zero Depreciation Cover
• Return to Invoice
• Engine and Gearbox Protection
• Breakdown Assistance Cover

• Marine Insurance

Marine cargo insurance covers goods, freight, cargo, and other interests against loss or damage during transit by rail, road, sea and/or air.

• Home Insurance

Everything you buy is a priceless possession for you and hence it needs to be protected.

A Home Insurance Policy protects your valuable and other assets. It is a comprehensive package policy that covers all valuables.

Digit Insurance gives protection for Home against Burglary, Loss/Damage of Jewelry, Fire and Natural Disasters.

• Commercial Insurance

The lines of insurance that affects the business operations in the real terms are categorized under the Commercial Lines of Insurance. Type of the insurance covers that one can buy may include:

• Property Insurance
• Engineering Insurance
• Liability Insurance
• Marine Insurance
• Employees Benefit Insurance
• Business Interruption

Construction businesses are laden with variety of risks that can take a heavy toll on finances and also halt projects.

Key Benefits:

• ​Comprehensive, continuous cover for any eventuality during construction period
• Various options available for the insured to choose specific additional coverage such as removal of debris, express freight, covering insured’s surrounding property, third party liability, etc.
• Flexibility for the insured to assign limits for the amount of additional coverage

Material Damage

• ​Damage to property insured against sudden and unforeseen causes that necessitate its repair or replacement.
• In case of repairs and replacements, the settlement is based on production of bills.
• In the case of total loss, settlement will be actual value immediately before loss less salvage.

Third Party Liability

​Legal liability for accidental loss or damage caused to property of other persons including property held in trust by or under custody of the Insured for which he is responsible, excluding any such property used in connection with construction thereon.

• Legal liability (liability under contract excepted) for fatal or non-fatal injury to any persons other than the Insureds own employees or employees of other firms connected with any other construction work or members of the Insureds family directly consequent upon or solely due to the construction of any insured property.
• Covers cost of litigation recovered by any claimant from the Insured.
• Also covers all costs and expenses incurred with the written consent of the Insurance Company.

Scope

• Fire, lightning, explosion, aircraft damage
• Riot, strike, malicious acts
• Flood, inundation, storm, cyclone and allied perils
• Landslide, subsidence and rockslide
• Burglary and theft
• Faults in erection
• Human errors, negligence
• Short circuiting, arcing, excess voltage
• Electrical and mechanical breakdown
• Collapse, damage due to foreign objects, impact damages
• Any other sudden, unforeseen, accidental damages not explicitly excluded

Different documents are required to buy different types of insurance plans. So, let’s analyse the documents required to buy different types of insurance plans separately.

• Life insurance

To buy a life insurance policy, the following documents would be required:

• Life insurance proposal form, duly filled and signed by the proposer and/or the life insured
• Photograph of the proposer 
• Photograph of the life insured (if different from the proposer)
• Age proof of the proposer and/or the life insured 
• Identity proof of the proposer and/or the life insured
• Address proof of the proposer
• Medical examination report of the life insured if required by the policy because of the age and/or the sum assured chosen 
• Income proof of the proposer if the sum assured and/or the premium of the policy is high
• PAN card of the proposer

• Health insurance

For a health insurance plan, the following set of documents would be needed to be submitted:

• Health insurance proposal form, duly filled and signed by the proposer
• Identity proof of the proposer and the insured members
• Age proof of the insured members
• Address proof of the proposer and insured members
• Medical examination report if pre-entrance medical check-ups are specified by the insurance company due to the age and/or the sum insured chosen 
• Income proof of the proposer for very high sum insured levels

• Motor insurance

To buy a car or a bike insurance plan, the following insurance documents would be required:

• Proposal form for car or bike insurance, duly filled and signed by the vehicle owner
• Invoice of the vehicle if a new insurance policy is being bought
• RC book of the vehicle
• Identity proof of the proposer
• Address proof of the proposer

• Documents needed for maturity or survival claims
  • Discharge voucher sent by the insurance company, duly filled and signed by the policyholder
  • Life insurance policy bond
  • Identity proof of the policyholder, legal heirs or assignee as the case may be
  • Bank account details of the policyholder, legal heirs or assignee as the case may be
  • Age proof of the insured member if it was not submitted at the time of buying the policy
• Documents needed for death claims
  • The death claim form, duly filled and signed by the nominee
  • Life insurance policy bond
  • Death certificate of the life insured
  • Identity proof of the nominee, legal heirs or assignee as the case may be
  • Bank account details of the nominee, legal heirs or assignee as the case may be
  • Police FIR if death happened due to an accident
  • Post-mortem report, coroner’s report, police inquest report, panchnama and other relevant records if death happened in an accident
  • Any other document as needed by the insurance company to settle the claim
• Health insurance claims

In the case of health insurance claims, the documents required for insurance claim are as follows:

• Pre-authorization claim form for cashless hospitalisation. This form should be filled and submitted within 24 hours of emergency hospitalisation. In case of planned hospitalisation, the form should be submitted at least 3-4 days before hospitalisation
• Health card issued by the insurance company
• Identity proof of the insured member
• The claim form, duly filled and signed by the policyholder
• Discharge summary or certificate of the patient
• All medical bills and reports in original
• Hospital records and investigative reports
• Medical prescriptions and cash invoice in original
• Police FIR or a Medico-Legal Certificate in case of accidental hospitalisation 
• Doctor’s prescription advising hospitalisation
• Reports of all attending medical practitioners
• Bank details of the policyholder in case of reimbursement claims
• Any other document as needed by the insurance company depending on the claim
• Motor insurance claims

In case of a car or bike insurance claim, the documents required for insurance claim are as follows:

• The claim form, duly filled and signed by the policyholder
• Identity proof of the policyholder 
• Driving license of the driver using the vehicle at the time of the accident
• Copy of the policy bond
• RC book of the insured vehicle 
• Tax receipt of the vehicle 
• Police FIR in case of third party claims or theft of the vehicle 
• Non-traceable certificate issued by the police authority in case of theft of the vehicle
• Invoice of the vehicle in case of theft or total loss or if required by the insurance company
• Surveyor’s report
• Bills of repair works issued by the garage and the payment receipts
• Bank details of the policyholder in case of reimbursement claims
• Any other document as needed by the insurance company for processing and settling the claim

Insurance forms:

https://licindia.in/Bottom-Links/Download-Forms