Insurance is one sector that is highly regulated and in some parts of the world strictly controlled by various governing regulations. What this brings about is a consumer who is trapped in a market with very few options. However the emergence of deregulations has promoted the entry of many players. What this has resulted in, is intense competition amongst the service providers and the effects of this, both positively and negatively can be observed in the insurance market.
wide choice of companies to choose as his service provider. He now also gets the benefit of lower rates because of the competition. Due to the presence of multiple players in the segment, every customer becomes a prize for the various companies and each company vies to get this customer's business and woos him with various features. The customer can choose from various price ranges to suit his need. A different bouquet of services right from better customer service, prompt claim processing, reduction in premiums and allied and partner discounts. Lowering of premium rates due to competition can also mean that the customer gets better or more coverage at the same premium.
Customized products for the specific needs of the customer has also been one aspect that has been the result of greater competition in insurance. Now a customer can get all his insurance needs addressed at one firm rather than dealing with multiple firms and many policies.
In the auto insurance sector, competition has resulted in the customer getting such a wide array of services from the insurance company that were earlier either unavailable or had to be charged for. In some policies, there is provision for special services such as a back up car / vehicle while the damaged vehicle of the customer is undergoing repairs, pick up from the accident site, insurance for the co passenger who may not be a member of the family and thus isn't automatically covered under the umbrella of insurance, insurance even in the case of a stationary vehicle being hit or damaged etc.
Terms and conditions of auto insurance companies has thus become very specific now. This is because increased competition has made them offer highly specific services to the client. Thus they have streamlined the terms and conditions of the insurance cover as well. Fir example the premiums tend to change according to the make and date of manufacture of the car, the average cost of maintenance of a vehicle, the average rates of repair depending upon the city / state etc, the availability and cost of spares, the driving history of the driver, age, health and marital status of the applicant etc. hence a customer may find that his premium rates will change if he has received more than 3 tickets in the last six months, or if he is accident prone etc. the terms of the insurance need to be understood clearly by the customer so that any kind of confusion can be avoided especially when there is an emergency. The customer needs to be in complete understanding of the extent of his auto insurance cover, to be able ttake full advantage of it.
An insurance company performs many activities. It not just signs on customers, but has to look after the customers once they are signed on. The insurance company activities will include:
- Ascertaining the facts in all documents provided by the customer while opening or taking an insurance policy with the company
- Explaining to the customer the various legal and financial implications of the insurance agreement
- Ensuring that the premiums of the customers are paid in time and following up with the customers for the same
- Ensuring that all correspondence that is intended to the customer reaches him
- Clarifying any questions that the customer may have about his insurance
- Inspecting vehicles and estimating damages and claims
- Paying the claims of customers
- Ensuring there is seamless assistance to a customer in claiming his insurance, covering medical costs, repair costs and compensations etc.
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