“Phenomenal returns.” That’s what an agent from a leading insurance company promised this 80-year-old grandfather from Delhi in return for a one-time payment of Rs 3 crore ($405,000). The gentleman had bought some 20 insurance policies for his family members.
The mis-selling came to light only a year later, after representatives from the company began calling to collect the annual recurring premiums worth lakhs. “My father went into deep shock. The policies had lapsed for non-payment of recurring premium and the product he had bought was useless,” says the victim’s son, requesting anonymity due to privacy concerns. The family runs a thriving logistics business and a hospital chain in the capital.
With multiple attempts to get the company to return the money going in vain, the family approached Insurance Samadhan. The three-year-old insurtech startup specialises in grievance redressals for customers who have either faced claim rejections from insurance companies or been mis-sold products. It took three months, but the company wrangled the money back for the family.
Insurance Samadhan and others of its ilk, such as independent claim advisory SureClaim, are part of a second wave of insurtech startups. Their predecessors like PolicyBazaar PolicyBazaar The Ken The offline imperative fuelling PolicyBazaar’s IPO push Read more , Digit Digit The Ken How Digit married tech with tradition to build an insurance unicorn Read more , and Acko Acko The Ken Will the ghost of Coverfox’s broken promises catch up to Acko? Read more digitised the selling of insurance policies—a straightforward business model with clear avenues for scaling and profitability.
Insurance Samadhan and SureClaim, on the other hand, operate in the grievance redressal segment, one that’s a tangle of insurance companies, advisors, government agencies, and legal entities.
Claims settlement and, by extension, grievance redressal, are pivotal in determining whether customers renew their policies—premiums are insurance companies’ bread and butter. According to data available with the Insurance Regulatory and Development Authority of India (IRDAI), however, policies worth $3.15 billion weren’t renewed in the year ended March 2020.