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INTERNSHIP REPORT

Challenges and Strategies of Loss Minimization in

Motor Claim in Delhi

A report submitted by partial fulfilment of the requirement for the award of Diploma of

Post Graduate in Management

in

Insurance Business Management

By
SHASHI PRAKASH
ROLL NO -22IN634

Under supervision of
Mr. Khanindra Ch. Das Sir
Professor, (BIMTECH)
Birla institute of management technology

(Duration: 10th April 2023- 9th June 2023)

BIMTECH (An Autonomous Institute)

Approved by AICTE, Accredited by NBA (AICTE) & NAAC (UGC)
Plot Number 5, Knowledge Park 2, NCR, Greater Noida, Uttar Pradesh- 201306

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Summer Project Certificate

This is to certify that Mr. Shashi Prakash, Roll No 22IN634, Shashi Prakash, Roll No
22IN634 (IBM) has worked on a summer project titled “Challenges and Strategies in Loss
Minimization in Motor Claim” at Bajaj Allianz General Insurance limited” after III in
partial fulfilment of the requirement for the Post Graduate in Management Program. This is
his original work to the best of my knowledge.

_________ Signature: __________

Prof. Khanindra Ch. Das

(Faculty Mentor)

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Letter of Transmittal
Mr. Anil Rathi,
Block No-4, DLF Tower, Shivaji Marg New Delhi
Dear Sir,
Re: Summer Project Report

Attached herewith is a copy of my summer-project report “Challenges and Strategies in

Loss Minimization in Motor Claim” which I am submitting in order to mark the completion
of my 08/10 weeks summer project at your organization. This report was prepared by me
using the best of practices and summarizes the work performed on the project and is being
submitted in partial fulfilment of the requirements for award of diploma.

I would like to mention that the overall experience with the organization was very good, and
helped me to know how work is carried out in real practice with the help of your esteemed
organization. I feel honoured that I got an opportunity to work with Bajaj Allianz General
Insurance Co. limited, a company of great repute.

I hope I did justice to the project and added some value to the organization.

Your suggestions/comments would be appreciated.

Yours truly,
Shashi Prakash

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(COMPANY LETTERHEAD)

Date: Month/Date/Year

TO WHOMSEVER IT MAY CONCERN

SUB: TRAINING CERTIFICATE

We hereby certify that Mr. Shashi Prakash, a full Time Student of post Graduate Diploma in
Management (IBM) course ,2022-24, of Birla institute of management Technology has
undergone his summer internship in partial fulfilment for the completion of his course for the
8/10 weeks starting from the 10th April,2023
The title of his project is “Challenges and Strategies in Loss Minimization in Motor
Claim
”. The Project is carried out under the guidance of Mr. Anil Rathi (North India Claim Head)
at Bajaj Allianz General insurance limited.
We found him to be dedicated and diligent student. We take this opportunity to wish him
every success in his future endeavors.

Sincerely
Mr.
Designation
Location

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Letter of Authorization

I, Shashi Prakash, a student of Birla Institute of Management Technology (BIMTECH),

hereby declare that I have worked on a project titled “Challenges and Strategies in Loss
Minimization in Motor Claim” during my summer internship at “Bajaj Allianz General
Insurance Co. Limited”, in partial fulfilment of the requirement for the Post Graduate
Diploma in Management programme.
I guarantee/underwrite my research work to be authentic and original to the best of my
knowledge in all respects of the process carried out during the project tenure.

My learning experience at Bajaj Allianz General Insurance Co. limited, under the guidance of
Mr. Anil Rathi, North India claim, and Prof.Khanindra Ch. Das, has been truly enriching.

Date: July 05, 2023

(Shashi Prakash)

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ACKNOWLEDGEMENT

A practical stint and a professional environment are the key to its successful completion. But
such an undertaking is never an outcome of the efforts of a single person rather it bears the
imprints of a number of people, who directly or indirectly helped me in completing my study.
In compiling this project report I have been fortunate enough to get active and kind
cooperation from many people without whom my endeavour would not have been a success.

I would like to gratefully acknowledge the contribution of all the people who took active part
and provided valuable support to me during the course of this project. To begin with, I would
like to offer my sincere thanks to “Mr. Anil Rathi sir North India Motor Claim Head at Bajaj
Allianz General Insurance Co. Limited.

I hereby take this opportunity to express my heartfelt thanks to my Faculty Guide and
Mentor, Prof. Khanindra Ch. Das, BIMTECH, for extending his constant guidance and
support while doing the project and without him the project would not have been able to take
a shape.

I sincerely thank Mr. Puran Sanwal, Manager, Motor Claims and Mr. Sumit Mehta,
Deputy Manager, Motor Claims for sparing part of his valuable working time in helping me
reach my objective in the defined tenure of the project and giving various insights for my
learning.

Finally, I also thank every member of Motor Claims department who are not mentioned
earlier for spending their precious time to interact with and enlighten me on various facets of
Motor Insurance.

Shashi Prakash

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PGDM (IBM)
Roll no -22IN634

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TABLE OF CONTENTS
S.no Title Page No.
1 Title Page
2 Summer Project Certificate 2
3 Letter of transmittal 3
4 Letter of Authorization 5
5 Acknowledgment 6
6 Executive Summary 8
Chapter I-Introduction 9
1.1 About the Organization 9
1.2 Overview of the topic 15
Chapter II - Literature Review 21
Chapter III - Objective of study 25
3.1 About the Study 26
3.2 Explanation of the statement of the problem
Chapter IV- Research Methodology 27
4.1 Objective and Scope of the Research 28
4.2 Research Design 29
Chapter V – Analysis and Conclusion 31
5.1-Challenges in Motor claim 31
5.2-Strategies for loss minimisation 39
Chapter VI- Learning and Recommendation 47

Chapter VII – References 52

Appendix 54

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Executive Summary
This project is deals with challenges and strategies in reduction in loss minimisation in motor
claim process. Insurer provide the risk coverage against the financial interest in uncertain
event and insured can avail this coverage by paying premium to insurer.

Insurance works on the basic principle of risk-sharing. A great advantage of insurance is that
it spreads the risk of a few people over a large group of people exposed to risk of similar
type.

Motor Insurance is an agreement between the insurer and the insured wherein the insurer
provides financial cover for the vehicle and the insured in return pays specific premium
annually. Auto insurance provide the protection for insured vehicle against the financial loss
and liability.

An insurance claim is the actual application for benefits provided by an insurance company.
Policy holders must first file an insurance claim before any money can be disbursed. The
insurance company may or may not approve the claim, based on their self-assessment of the
circumstances.

In this claim process, fraudulent and manipulated claim threat to the loss minimisation in
motor insurance claim management. Some of types of claims are following.
 Fraudulent Claims or Manipulated claim
Some challenges are due to the economics’ conditions
 Inflation
 Labour cost
 Rate of spares parts
 Non availability of Child parts
Strategies for the loss minimisation in motor claim process.
 Strengthening Risk Assessment
 Proactive Risk Mitigation Measures
 Efficient Claim Investigation
 Encouraging Authorized Repair Networks
 Regular Policy Reviews
 Recommendations:
 Claims files should be monitored as they progress
 Create customer awareness

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 Increment of premium on the basis of inflation’s rat

1.1 About the Organisation

Bajaj Allianz General Insurance Company Limited established the joint venture between
Allianz SE and Bajaj FinServ Limited. Bajaj Allianz Insurance is the part of the Bajaj group
and subsidiary of the Bajaj FinServ Limited. The company was formed in 2001 and received
the

license from the Insurance Regulatory and Development Authority of India. Now Company
become the leading insurer in Indian insurance industry. The Organisation expanded their
insurance business in over 1100 offices in towns and cities. The Company changed its tagline
to ‘Caring Yours’ which signifies the protection and cares for customers and protect the
financial interest of the valuable insured related to their motor, health, home and Property.

The Company sell their insurance product to retail customers across demographic of the
country and Organisation also wide range of product related to corporate sectors like Property
insurance, Whistle-blower policy, Stewardship policy, Policy for related Party Transaction
etc.

The Company is not only bringing insurance solutions to the customers’ doorstep but also
improving insurance penetration, with its advanced digital and mobile applications. Today
through its digital offices it has reached out to over 1000 new Tier 2 and 3 towns across India.
The Company has a strong focus on customer centricity and aims at delivering superior value
with an excellent and caring experience for the customer. Today the Company is taking its
relationships with the customers beyond insurance, by offering them a plethora of digitised
customer-centric initiatives.

Bajaj Allianz General Insurance Co. Limited’s Vision and Mission

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As a responsible, customer focused market leader, we will strive to understand the insurance
needs of the consumers and translate it into affordable products that deliver value for money.
A Partnership Based on Synergy. Bajaj Allianz offers technical excellence in all areas of
General and Health Insurance, as well as Risk Management. This partnership successfully
combines Bajaj Fiserv’s in-depth understanding of the local market and extensive distribution
network with the global experience and technical expertise of the Allianz Group. As a
registered Indian Insurance Company and a capital base of Rs. 110 crores, the company is
fully licensed to underwrite all lines of insurance business including health insurance.

Services:
Bajaj Allianz General Insurance is a leading general insurer in domestic market which offers
a wide range of insurance policy to individuals, families and business.
There are some insurance products which provided by the Bajaj Allianz General Insurance
Co. Ltd

Health Insurance: Bajaj Allianz General Insurance offers wide variety of health insurance
products to policy holders which covers the medical expenses like treatment, pre and
hospitalization expenses, Surgery etc. It established the well-connected network of hospital
and third-party administrators. It provides the cashless treatment to insured (policy holder)

Motor Insurance: Bajaj Allianz provided the comprehensive polices for motor vehicle like
four wheelers, two wheelers and commercial vehicles. This type of the policy cover risk
related to the external mean damages, party liability and Personal accident expenses.

Home insurance: Bajaj Allianz provide also the home insurance which covers the risk like
fire, theft, and natural calamities, the home and its content. It also covers the risk related to
the jewellery and valuables stuff.

Commercial insurance-This policy covers the risk against fire, Natural calamities, theft and
insured peril. These policy issue for the commercial properties which are source of the
revenue of the organization. These policies are cyber insurance, Contractor All risk Policy,
Advance loss of profit policy, Machinery loss of profit policy, and industrial policy etc.

Cyber Insurance: The cyber risk is emerging in modern world which threat to the
organization and impact the revenue model of the of the organization. This is policy cover the
against the cyber risk which are related breaches of data and cover the Consequential loss due
to the financial loss. This policy covers the cyber–Extortion Coverage and cover the ransom

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payments, negotiations with cybercriminals. Basically, this policy covers the perils like
Identity Theft Cover, Social Media Cover, Cyber Stalking Cover IT Theft Cover, Malware
Cover Phishing Cover, E-mail Spoofing Cover Media Liability Cover, Cyber Extortion
Cover, Data and Privacy Breach by third Party Cover.

Surety Bond Insurance: In India, Bajaj Allianz general insurance company limited launched
the first surety bond insurance. Shri Nitin Gadkari, Minister of Road Transport and
Highway of India launched Surety bond insurance from Bajaj Allianz General insurance
Company limited under the regulation of IRDAI. This project launched on 19 th
December,2022 which cover the risk against the construction project. This project will
enhance the pace of the Government Infrastructure project. It protects the financial interest of
principal, the oblige and the insurer who provide the surety bond insurance.

Insurance industry in India and market

The history of Indian insurance started from Calcutta in 1818 when British ruled in India and
British India was divided into three presidencies, these presidencies were Kolkata presidency,
Madras Presidency, Bombay presidency. This presidency witnessed the origin of the
insurance industry in India, The Development of insurance started with the life insurance in
India. In India, British empire took first step for development of insurance company. They
established the Oriental life insurance Company in Calcutta. In 1870 British insurance act
1870 was formed. In 19th century, Insurance industry was developing where British insurer
like Liverpool and Indian insurers created competition in Indian insurance industry, now
number of insurance company increasing from the 40 to 180 insurers in 1930s.

The amendment related to the after independence came in 1959 which describes about the
significant changes in insurance industry and government eradicate the mis practices and
unfair activity.

Life Insurance Corporation act was formed in 1956 after the nationalisation of various
insurers in India. Insurance industry also the witnessed development of the insurance after the
1991.

In 2000, Insurance Regulatory and development Authority of India was established as

regulatory body in insurance field. In 2000 IRDAI allowed the private insurer in Indian
Market.

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In recent years with the opening up of the sector and the entry of global giants the insurance
industry is witnessing high growth and increased competition for a large share of the pie.
Competition has also increased with new products and channels. Banks and brokers have
added insurance products to their product mix, and insurers are now offering broader
financial services products. Internet has added increased pressure to margins by enabling
customers to do their own comparison-shopping. As a result, insurance companies are
continually trying to adjust to the new challenges and opportunities this brings.

Insurance
Insurance provides financial protection against a loss arising out of happening of an uncertain
event. A person can avail this protection by paying premium to an insurance company.
A pool is created through contributions made by persons seeking to protect themselves from
common risk. Premium is collected by insurance companies which also act as trustee to the
pool. Any loss to the insured in case of happening of an uncertain event is paid out of this
pool.
Insurance works on the basic principle of risk-sharing. A great advantage of insurance is that
it spreads the risk of a few people over a large group of people exposed to risk of similar
type.

General Insurance: -
Human life is subject to risks due to natural and accidental causes. Risks are unpredictable.
Life is full of uncertainty and Market Share of Major Companies in Terms of Gross Direct
it happens when one least Premium collected (FY22)
expects it. An individual can New India

protect himself or herself against ICICI Lombard

such contingencies through 14.8%
United
General Insurance. 8.1% India
Total size: Agricultural
US$27. 7.2% Insurance Company
With the help of a general 6.3%
51.2% 6.2% of India Limited
insurance contract, one cannot 6.2% Bajaj Allianz

avoid the loss but can certainly Oriental Insurance

protect himself from such losses. Others

It is the uncertainty that is risk,

which gives rise to the necessity for some form of protection against the financial loss arising
from event. Insurance substitutes this uncertainty by certainty. The primary purpose of

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general insurance is the protection of the insured’s property. Insurance in its various forms
protects against such misfortunes by having the losses of the unfortunate few paid by the
contribution of the many that are exposed to the same risk. This is the essence of insurance –
the sharing of losses and substitution of certainty for uncertainty.

India is the 4th largest general insurance market in Asia and the 14th largest globally.
In FY21, non-life insurers (comprising general insurers, standalone health insurers and
specialized insurers) recorded a 5.19% growth in gross direct premiums. In India, gross
premiums written off by non-life insurers reached US$ 17.88 billion in FY23*, from
US$ 28.14 billion in FY22, driven by strong growth from general insurance
companies.

The insurance industry in India has 58 insurance companies, including 34 non-life

insurers (25 general insurers, 7 standalone health, 2 specialized insurers) Going
forward, general insurance companies will be key beneficiaries of the opening-up of
economies, especially with improved trade activity increasing demand for motor and
health insurance. Strong growth in the automotive industry over the next decade is
expected to boost the motor insurance market. Non-life insurers include general
insurers, standalone health insurers and specialised insurers. The main non-life
insurance products offered by the companies in India include motor insurance, health
insurance, fire insurance, marine insurance among others. The non-life insurance
industry is driven by the growing demand for a number of associated sectors such as
the automobile industry and the healthcare industry.

Motor Insurance
Motor Insurance is an agreement between the insurer and the insured wherein the insurer
provides financial cover for the vehicle and the insured in return pays specific premium
annually. Motor Insurance (or Auto Insurance) provides protection for your vehicle against
the financial loss and liability that could result as a part of accident or theft.

Motor Insurance involves two types of coverage:

Liability Only Policy: This cover shields you from any legal liability resulting from accident
of your vehicle. The coverage includes death, injury or property damage to third party. This
cover does not cover damage to the vehicle. Liability Only Policy is legally mandatory in
India under the Motor Vehicles Act, 1988.

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Package Policy: This is comprehensive cover which includes not only liability cover but as
well as damage or theft of the vehicle. This cover though is not mandatory but is
recommended.
Personal accident cover -Personal accidents cover the risk against the financial interest if
insured passenger get injured. This policy provides the compensation for the accidental cases such as
the medical expenses, permanent disability expenses etc

Claims in Motor Insurance

An insurance claim is the actual application for benefits provided by an insurance company.
Policy holders must first file an insurance claim before any money can be disbursed. The
insurance company may or may not approve the claim, based on their self-assessment of the
circumstances.

When claims are filed, the insured has to observe the settled rules and procedures and the
insurer has also to reciprocate in a similar manner by undertaking appropriate steps for
speedy disposal of claims. It is true that claim settlement is complex in nature, but it is the
driving force to plant confidence in the hearts of people. Insurance claim is a right of insured
under a contract of insurance. Insurance contract is a contract by which one party called the
insurer promises to save the other party, the insured on payment of consideration known as
the premium. Disputes crop up in the payment of claim when the insurer ad the insured
understand the process of claims payment in a different way. Claims settlement is an integral
part of the insurance business which is a service industry and its growth is interwoven with
the people, the customers and consumers of service. It is inevitable for the insurance
company to protect and guard the interests of the policyholders. An insurance claim is the
only way to officially apply for the benefits under and insurance policy, but until the
insurance company has assessed the situation it will remain only a claim, not a pay-out

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Claim Process Flow Claim management procedure in Moto insurance

Claim Intimation

First Contact

Preliminary
Preliminary Verifications
Stage

Survey Confirmation

Admissibility of claim

Assessment of loss

Type of Settlement

Claim Reserve

Survey
Claim Processing

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Insurer’s Liability
Claim Settlement

Claim Management-OwnCashless/Reimbursement
Damage Portion

I . Preliminary Stage :

i) Claim Intimation: In the event of an accident/loss, intimation is made by the

insured/claimant/repairer/intermediary to the insurer.
The insured/claimant/repairer/intermediary can intimate the claim in the following ways:
 Send a mail to the company directly
 Make a call to the company’s call centre.

The call centre collects all the details from the insured/claimant/repairer/intermediary in
regard to the accident/loss. Details like policy issuing office, claim area, insured name,
description of the accident/loss are provided to the call centre. After the collection of
details, a claim is registered and a claim number is generated by the call centre.

ii) II ) First Contact: Within one hour of the claim intimation from call centre, the
company makes a first contact with the insured confirming the presence of the vehicle at
the workshop and the completion of the documentation part like filling of claim form,
submission of copies of Driving License and Registration Certificate.
iii) Preliminary Verification: Once claim intimation is received, it is very important to
have preliminary verification for the following:
 Receipt of premium – Confirmation of Section 64VB from the accounts
department.
 Verification of NCB
 Check whether it is a close proximity case (case arising within 15 days of policy
issue)
 PIR (Pre-inspection Report) – Obtain PIR from Operations in case of transfer of
ownership, break-in and vehicles used for more than 8 years.
iv) Surveyor Deputation: After the preliminary verification is done, the next step is to
depute a surveyor for the claim. A surveyor is deputed depending on the claim size.
 For small and local claims (claim size up to Rs. 20,000) – in-house surveyor is
deputed.

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 For large claims usually claim size of more than Rs. 20,000 – an external
surveyor is deputed.

II. SURVEY

i) Admissibility of claim: Apart from the preliminary verification, the following details are
also required to be verified by the surveyor at the time of survey:
 Whether the policy was in force at the time of accident/loss
 Whether the policy is issued in the name of the owner of the vehicle
 Whether the driver at the time of accident/loss was authorized to drive the
vehicle
 If the vehicle particulars mentioned in the policy are correct in terms of engine
number, chassis number, registration number, etc.
 Whether the cause of the loss is similar to the type of loss
 Whether the claim reported is in regard with the fresh accident/loss only and not
the old ones
ii) Assessment of loss: After the surveyor is satisfied that the claim is admissible, the
surveyor makes an assessment of the loss. The assessment of loss depends on two factors:
 Type of loss
 Extent of loss
 Type of Settlement: The next step is to decide on the type of claim
settlement. This decision entirely depends on the extent of loss.



Extent of Loss ≤ 75% of IDV Extent of Loss > 75% of IDV

Partial Loss

Cash Total
Loss Loss

Repair Net of
Basis Salvage

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 Cash Loss - In this mode of settlement the settlement is done prior to vehicle being
repaired and the insured after settlement may get the same repaired in any manner
and at any workshop and does not have to prove that that the vehicle is repaired and
does not have to submit the bills of repairs. Such mode is opted mostly in case
where insured claims as per authorized workshop estimates and after settlement on
cash loss basis may get the repairs carried out at some local workshops with used
parts and depends on the financial status of the insured.

The following procedure is followed for calculation of claim payable in case of Cash
Loss:

Liability of the insurer in case of repair (-) Taxes (-) Cash Loss margin of 25% on the
net after tax deduction = Cash Loss Value

 Net of Salvage – This mode of settlement is used in case of total loss of vehicle.
In this mode, the salvage is retained by the insured. As the salvage is retained, the
salvage value of the vehicle is deducted from the IDV, which becomes the amount
payable to the insured.
IV ) Claim Reserve: Claim reserve is an important aspect of claim management
process. Adequate reserve is necessary for the insurer to meet its liability towards
the claim. After the surveyor is deputed and the extent of loss is analyzed, it is
important to create a reserve for the loss. In Future Generali, the default reserve
amount for every claim is Rs. 18,000. However, this amount is changed depending
upon the estimate of the extent of loss.
Claims Reserve: Claim reserve is an important aspect of claim management
process. Adequate reserve is necessary for the insurer to meet its liability towards
the claim. After the surveyor is deputed and the extent of loss is analyzed, it is
important to create a reserve for the loss. the default reserve amount for every
claim is Rs. 18,000. However, this amount is changed depending upon the estimate
of the extent of loss.

v) Insurer’s Liability: Insurer’s total liability towards the claim is calculated in the
following manner:

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Total amount (+) Towing charges (-) Salvage (-) compulsory excess (-) Voluntary
excess.

III. Claims settlement

After the claim has been assessed, the final step is to settle the claim by making payment.
This claim settlement can be done in two ways:

 Cashless facility
 Reimbursement

 Cashless facility - For cashless claims, the insurance companies have their own
garage network, which they use to repair the vehicles, insured by them. The expenses
are dealt directly between the garage and the company. The owner of the vehicle does
not have to worry about the expenses other than the accessories, which are not
covered under the policy. They have to make the payment of only the difference
amount as confirmed by the claims manager to the garage. The difference may arise
because of depreciation on parts, compulsory excess, salvage etc.

 Reimbursement – If the car is serviced in a garage outside the purview of the

company’s network, then insured can claim reimbursement for the same. Insured can
choose insured’s own preferred garage and get the car repaired. Insured can then
forward the original bill to the insurance company - claims manager/surveyor. In case
of reimbursement or non-cashless claim, original bills and payment receipts are to be
submitted to the insurance office.

LIST OF DOCUMENTS REQUIRED FOR PROCESSING THE CLAIM:

The following are the various documents required in case of different types of vehicles in
Own Damage Claims:

 Private vehicles:

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The following documents are required in order to process a claim in case of

private vehicles:
i) Claim Intimation Sheet
ii) Policy Copy
iii) Copy of Section 64VB confirmation
iv) Claim Form
v) Copy of Registration Certificate
vi) Copy of Driving License
vii) Survey photographs
viii) Estimate of repairs
ix) Survey Report
x) Repair Invoice
xi) Repair Receipt
xii) Satisfaction/Discharge Voucher
 Commercial vehicles:
In addition to the above-mentioned documents, the following additional
documents are required in case of commercial documents:
i) Copy of Fitness Certificate
ii) Copy of Permit
iii) GR form
 Theft Claims
In case of a claim lodged due to theft of the vehicle, the following additional
documents are required:
i) Set of original keys (2)
ii) Original RC Book
iii) Original Sales Invoice
iv) Original Tax Receipt
v) EMI Statement
vi) Non-Traceable Certificate
vii) Transfer Form
viii) Subrogation letter
ix) Indemnity Bond

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CHAPTER- II

LITERATURE REVIEW
Report on Assessment of challenges and prospects of motor claims management in
Africa insurance company: -

The tragic effects of motor claims management are a nuisance to the insurance business. This
study analyses the challenges and prospects of as well as customer satisfaction level of the
motor insurance business account in general and motor claims handling and management in
AIC by considering the specific objectives of identifying the claims handling processes
affecting customer experience and satisfaction. At the same time the study evaluated motor
claims handling procedure and identified the challenges directly related in customer
satisfaction and confidence on AIC and its products delivered. The study further assessed the
prospects of installing motor claims management that alliance with its strategic plan in lieu of
prevailing claims handling procedure. The study employed cross-sectional survey design in
which 315 external customers selected randomly and 88 internal customers (i.e., staffs)
involved in the claim process were the subject of the study by administering specially
designed questionnaires. Besides, three FGDs and six KIIs were carried out to get an in-depth
insight in the evaluation of service delivery according to the missions and strategies of AIC.
The results obtained suggest that the prevailing claims handling process is a major problem
area affecting customers’ satisfaction that need to be overhauled. The clients of AIC believed
that lack of updated and clear claims management manuals and procedures, lack of skilled,

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knowledgeable, experienced, and committed claim staff and in claims service are the key
challenges in AIC. More importantly, centralized claims management, external and internal
effects of immoral behaviour of the clients, surveyors, garages, spare part dealers, and
internal employees along with sluggish interdepartmental/work units/ communications
towards claims management were the major issues in the company. Poor compliant handling
system of the company, delay of claims management from notification up to settlement to
claimants, lack of intensive standard training for claims staff, and lack of work standard for
internal employees, external surveyors and garages decelerates the rate at which quality
service is delivered in the company. Thus, it’s recommended based on the finding that the
AIC should create an effective, transparent, and customer-oriented means to standardize the
services, educate the customers, decentralize the claim unit, and make use of the standard
monitoring mechanism as per the strategies and policies of the company to maximize the
level of satisfaction of motor claimants. Keywords: - Challenges, Clients, Motor claims
management, Satisfaction

Report on Motor vehicle claims challenges in Kenya and development of a Claims Bot
application prototype. Diss. University of Nairobi, 2021: -
A customer's uncomfortable and emotionally taxing surroundings can now be modified using
a smartphone. We were able to identify challenges with motor vehicle claims in Kenya and
design a mobile app prototype for claims through our research. Claim management is thus a
critical issue in the insurance industry, owing to its ability to influence company success. As a
result, insurance companies are employing novel strategies to improve the efficiency of their
operations and procedures in terms of time and cost.
This study will benefit claims managers at general insurance businesses seeking to increase
operational efficiency, as well as the public and policymakers involved in general insurance.
Customer dissatisfaction is a result of time-consuming and error-prone claim processing
(Abiyo. 2016).

Report on Assessment of customer claim handling practices and challenges in the case
of nyala insurance: -
The aim of this study was to assess the customer claim handling practices and challenges in
the case of Nyala Insurance Head Office, Addis Ababa. To this end, data were gathered
through questionnaire from 60 customers of the insurance company. The researcher used
convenience sampling method to select samples because customers were contacted at hourly
service delivered and the population would be infinite. Descriptive statistics (frequency,

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percentage, mean and standard deviation) was used to analyse data as it helps to describe the
characteristics of objects, people group, organizations, or environments. Data from the
respondents was analysed and translated into useful information using the statistical package
for social sciences (SPSS). The findings of the study indicate that the insurance company’s
customer claim handling system was found to be ineffective as the respondents’ average
mean value was 2.88. The results also show that the major claim handling challenges in NIC
are weak underwriting standards, lack of information technology support and limited capacity
of claims personnel and the performance evaluation and legal principles undertaken by the
company to reduce customer claim handling and related problems. Therefore, Nyala
Insurance company need to improve the existing customer claim handling practices and take
proactive measures to curb the challenges and increase insurance customer satisfaction.

Keywords: Nyala Insurance Company, Customer Claim Handling Practices, challenges

Report on Assessment of the Motor Third Practices and Challenges: th Companies: -

Rarely a week goes by without a motor accident featuring in the national press, often as
headline news. Some of these are considered newsworthy simply due to unusual
circumstances and can be quite minor, whilst others are tragic events involving death and
serious injury and loss of property. The Ethiopian Government promulgated Motor Third
Party Compulsory Insurance (MTPCI) law under proclamation 559/2008 with the aim of
laying down a mechanism to alleviate economic loss because of road accident. The MTPCI in
Ethiopia came into effect on 11th September 2011. The proclamation was revised after two
years in service by Proclamation No. 799/2013. This paper tried to assess the practice and
implementation of the legislation with insurance companies and IFAA. To address the
research problem, both quantitative and qualitative research approaches were used and also
considered both primary and secondary data. From the findings it was observed that the
performance of MTPCI with both insurers and IFAA was very profitable but not well
understood. The tariff premium collected by IFAA was found to be at high side compared
against the payouts for hit & run and medical expenses. The EMT case was not as smooth as
required and its performance was still far behind schedule. Moreover, according to the
finding, there had been many operational disparities with companies including but not limited
to declining both cover and claim.

Report on Innovative Motor Insurance Schemes: A Review of Current Practices and

Emerging Challenges: -

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The objective of this paper is to provide a review of the most popular and often implemented
methodologies related to Usage-based motor insurance (UBI). UBI schemes, such as Pay-as-
you-drive (PAYD) and Pay-how-you-drive (PHYD), are a new innovative concept that has
recently started to be commercialized around the world. The main idea is that instead of a
fixed price, drivers must pay a premium based on their travel and driving behaviour. Even
though it has been implemented only for a few years, it appears to be a very promising
practice with a significant potential impact on traffic safety as well as on traffic congestion
mitigation and pollution emissions reduction. To this end, the existing literature on UBI
schemes is reviewed and research gaps are identified. Findings show that there is a
multiplicity and diversity of several research studies accumulated in modern literature
examining the correlation between PAYD (based on driver’s travel behaviour and exposure)
and PHYD (based on driving behaviour) schemes and crash risk to determine crash risk.
Moreover, there is evidence that UBI implementation would eliminate the cross-subsidies
phenomenon, which implies less insurance costs for less risky and exposed drivers. It would
also provide a strong motivation for drivers to improve their driving behaviour, differentiate
their travel behaviour and reduce their degree of exposure by receiving feedback and
monitoring their driving preferences and performance, which would result in crash risk
reduction both totally and individually. The paper finally discussed the current and emerging
challenges on this research field.

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CHAPTER 3: OBJECTIVE OF STUDY

3.1 About the study: -

The aim of the project is to identify the challenges and strategies in reduction losses in motor
claim which are based on the experience and opinion of the BAGIC employee, customers,
Surveyor and entire team of the claim in Delhi.

The problem deals with finding out the challenges faced in management in reduction in loss
minimisation in motor insurance claims in Bajaj Allianz General Insurance Co. Ltd.

3.2 Explanation of the statement of the problem

Project deals with the challenges and strategies in reduction of loss minimisation of Motor
Insurance claims. There are a lot of issues faced by both the BAGIC and the insured in
management of Motor Insurance claims. The purpose of the project is to explore the various
issues faced and recommend ways in which the claims can be managed in a better way in
Bajaj Allianz General insurance Co. Limited. The loss minimisation is important in various
aspect such as financial stability, premium stability, policy holder satisfaction and fraud
prevention. The loss minimisation is essential for the maintaining the solvency ratio
guidelines it is mandatory to control the claim pay out which are invalid claim. In this project
deals with experience of the claim department which can be essential step for the reducing
the pay out in motor claim.

3.3Objective

The primary objective of the project is to study the motor claim management at Bajaj Allianz
General insurance Co. Ltd. This will be useful in understanding the problems those are faced
by Bajaj Allianz General insurance Co. Ltd. And find out the loopholes in claim process
further strategies will be based on the problem in the which Bajaj Allianz may take step to
decrease the loss minimisation in motor claim, basically it will help in reduce the fraud claim,
manipulated claim, fabricated claim which threat to the claim management process.

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The objective is achieved by exploring the impact of factors such as

 Challenges faced by the insurer (BAGIC)
 Repudiation of claim
 Fraud Claim
 Impact of Underwriting

3.4 Scope
The scope of this study is limited to Bajaj Allianz General Insurance Co. Ltd., Delhi & NCR.
Also, the sample size for the in-depth interview and telephonic interview is limited to Delhi
& NCR. This project will be based on the interview of the BAGIC employees, Executive
staffs, Inhouse Motor Surveyor, outside Motor Surveyor, Workshop’s Owner and Customers.
Here
These Stakeholder share the experience about the views, opinion, challenges and Strategies in
motor claim process when customers intimate the claim in motor at Bajaj Allianz General
Insurance Co. limited. Formulation of these Strategies shall help in reduction in loss
minimisation in motor claim. The loss minimisation is essential for the maintaining the
solvency ratio guidelines it is mandatory to control the claim pay out which are invalid claim.
In this project deals with experience of the claim department which can be essential step for
the reducing the pay out in motor claim
.

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Research Methodology

Research methodology is the blue print of the project and systematic approach used to gather
data analyse information and find the conclusion and learning. Research methodology will
always depend the objective of the project. Basically, it is the framework for the entire
research project. It describe about the sources of data such as primary sources and secondary
source and accuracy of the data. The conclusion and analysis will be always depend on the
accuracy of the data collection process.

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The process of research consists of various steps. The following are the various steps
involved in carrying out research.

Specifying research objective

Preparing a list of all the required information

Research plan and design

Design the data collection project

Selecting sample size

Determine sample size

Organizing and carrying out field work

Analyzing the collected data and reporting the finding

Research Design

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The Research Design used for this research was “Exploratory Research” as well as
“Descriptive Research”.

Data Collection: -

Both primary as well as secondary data has been used for the project.
1. PRIMARY RESEARCH
The primary research included surveying Employee, Surveyor, Workshop owner,
Repairer and analysing the response from them. The analysis was concerned with the
identifying the challenges which faced by the Bajaj Allianz General Insurance Co.
Limited, these challenges threat to the loss minimisation in motor claim management.
Second aspect of the project is Strategies which act as the solution for the concerned
with the employees of the motor insurance claim team of Bajaj Allianz General
Insurance who deal with the claim portion and the management of motor insurance
claims.
Telephonic interview was conducted for the windshield supplier, spare’s part vendor
and the personal interview for the employees like Surveyor, claim head and other
staff in Bajaj Allianz General Insurance Co. Limited

2. SECONDARY RESEARCH
The secondary data was collected by referring to database of Bajaj Allianz General Insurance
books, websites and articles. Resources used in secondary research are information and data
that were gathered by the individuals for a distinct purpose. Acquiring knowledge or
conducting research can be added by utilising these resources. Below are a few typical
categories of resources for secondary research:
Scholarly magazines are known for publishing research papers composed by professionals in
diverse areas of expertise. Frequently, they comprise significant discoveries from research, as
sessments of literature, and crucial analyses.

Books authored by specialists in a field offer thorough insight on particular subjects. Compre
hensive knowledge and understanding can be gained with their assistance.
For Example- IC 72(III)
Government body published the reports, statistics, policy documents, and research papers that
can be helpful in making the project.

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For Example -IRDAI Annual Report

Market Research firms conduct studies and compile reports on market trends, consumer
behaviour and industry analysis. These reports provide the information about the specific
industries or market segments.
For Example - Nielsen India, Kantar India

IN BRIEF: -

CENTRE DELHI

EXPLORATORY
RESEARCH TYPE DESCRIPTIVE

RESEARCH TELEPHONIC INTERVIEW

APPROACH PERSONAL INTERVIEW

PRIMARY DATA
DATA TYPE SECONDARY DATA

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CHAPTER V
Analysis and Conclusion

CHALLENGES IN REDUCING THE LOSS MINIMISATION IN MOTOR CLAIM

Fraudulent Claims- Fraudulent Claims are important challenges in motor insurance and
which are threat to the insurer. Fraudulent claims always made by the aware policy holders in
Delhi. Policy holder/repairer intentionally damages their vehicle in which they create the fake
witnesses and submit the manipulated, depressed the material facts of the insured vehicle.
Fraudster in Delhi know every aspect of the claims process and loopholes of the insurers.

The most common form of claims in motor insurance is non-disclosure of material

information which means that fraudster depressed the material facts of the insured vehicle.
Fraudster breaches the principle of insurance because the Fraudster violates the insurance
act 2015(UK) which describes about the fair presentation of the material facts of the insured
vehicle. Here, the insurance act is remedial solution in the case Fraudster’s claim.

In Delhi region, Few Policies holder do not disclose material facts about the vehicle like past
claims, insured vehicle’s history, uses of vehicles while issuing the policies. Fraudsters aware
about the technology which are helpful in fraudulent claims, In Some area of Delhi witnessed
the non-existent of the vehicle and fraudster create the fake document of the vehicle which
are helpful in while taking the claims.

Malpractices by the workshop and policy holder --Manipulation of motor

insurance claims by workshops or service centres is not limited to a specific location and can
occur in various places, including Delhi. While it is important to note that not all workshops
engage in such practices, there have been instances where dishonest workshops have
attempted to manipulate insurance claims for their financial gain. Here are a few reasons why
this may occur:

Workshop deliberately involve in the manipulation of the cost of the claims for repairs and
workshop like dealers charge the more of the original parts for the vehicle which increase the
insurance bills

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In Delhi, some workshop presents the false claims which are actually manipulated by the
workshop or they extend the extent of the damages because workshop’s staff have the target
to increase the revenue of the workshop.

For Example-A Policy holder got damage in their insured vehicle and comes to the dealer
(workshop), policy holder leaves the premises then dealers efficiently extend the damage of
the door parts and they have the blank form, so they can easily manipulate the proximate
cause of the insured vehicle

Deductibles avoidance have compulsory charge which have to pay by the policyholder which
threat to loss minimisation process. The main motive for the deductible’s avoidance is to
eliminate the deductibles amount and increase the cost of the extent of the parts of vehicle.

In Some case, Workshop involve in the mis presentation of the fact’s material related to the
insured vehicle, sometimes policyholder manipulated the material facts with help of the
workshop specially to dealership.

Deductible is the important tool for the avoid the smaller claims but nowadays workshop
owner involves in the manipulation with the help of the deductibles process.
If an insurer found any fraud, illegal practices and verification of repair estimates then insurer
may cancel the claim.

Sometimes, Surveyor know the pattern of the fraud but they do have the proper evidence
related to the fraud clams, so insurer have to pay the claim in this case. These type of the
insurance claim threat to the loss minimisation process.

Finally, we surveyors are aware about the malpractice of the dealers but dealers are main
source of the premiums, if insurer may the repudiate the claim, then there may be the chance
of the loss of huge premium which are revenue of the insurer, for long term motor portfolio is
the profitable in nature. In Bajaj Allianz General Insurance is the leading insurer in motor
insurance field,35% of the total premium come from the motor portfolio. Insurer do not
worry about the fraud and manipulated in certain proportion. If dealer’s portfolio become loss
in nature, then insurer will try to increase the premium in motor insurance. Staff of workshop
work at low salary and their variable depend on the sales of the spares part of the vehicle, so
employee has the huge pressure to sell the parts of the vehicle.

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Policy holder deliberately extend the loss of motor insurance with intention to make fraud
claim and fabricated loss are illegal practices by the policy to gain the advantages in claim
process.

Staged accidents are common in fabricated loss in which policy holder intentionally collide
their vehicle and file the claim on the basis of the insurance policy. Policy holder
intentionally Policy holder intentionally involve in the non-existent damages which never be
happened in the past claim. Sometimes policy holder submits false evidence like photos of
damaged part and easily manipulate the documents related to the insurance policy.

CASE STUDY-1

Honda city Manipulated by workshop

Claim Observation

 Delay of 7 days in claim intimation.

 Vehicle surveyed at local garage whereas parts like radiator, condenser etc missing,
letter send to insured for the same.
 Spot photos conclude that damage seems genuine as it was manipulated and
fabricated by insured.
 Initial damaged photographic conclude that damages seem manipulate and fabricated
by insured.
 Later insured confirm through mail that missing parts and Gear box expenses bear by
him at his own cost.
 Finally, Loss restricted /Minimize to 40,000/ instead of 2 lakhs.

Spot Photo Survey Photo

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Case study-2 Jaguar manipulated by the insured (Policy holder)

Jaguar fraud case-78 lakh IDV

 Delay of 15 days in claim intimation.

 Initial damaged photographs conclude that damages seem manipulate and
fabricated insured.
 After vehicle Toppled cause fire immediately but Driver in vehicle was
completely safe not even scratches marks found in driver.

 Investigation and forensic report conclude that the main reason of fire
belong to external means only.
Wating of upcoming damages –Waiting for their upcoming damages are the
challenges for the reduction in the loss minimisation in motor insurance. Here, insured get the
external damages in their insured vehicle but do not intimate the claim and wait for the
further losses, this type of the case always happened in small claim where claim amount is
less than the deductibles. Insured want to report their claim together and do not want file the
multiple.

In multiple claims, insurer cancel the claim and insurer only pay the latest claim in motor
insurance claim. It is very crucial that intentionally late claim intimation validate and impact
the claim process. Waiting for their upcoming claim threat to their loss minimisation process
in motor claim.

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Inflation-Inflation are the crucial challenge in the loss minimisation in motor claim
insurance. Cost of the raw material such as rubber, tyre, plastics and metal which increase the
claim size in Bajaj Allianz General insurance limited Company. Manufactures and suppliers
impose the high cost on spares part of vehicle.

Transportation cost also increase every year and include fuel price which increase the amount
of payment in motor insurance claim. Increase in cost of the spare parts which threat to loss
minimisation in motor claim.

Some cases devaluation in currency in international market increase the claim amount in
insurance because raw material of spares or spares may import from the foreign land which
pass through the taxes and duties, later, it spares parts become expensive, unfortunately
Claim amount increase and threat to the loss minimisation process.

Personal accidents coverage – Personal accidents cover the risk against the financial
interest if insured passenger get injured. This policy provides the compensation for the
accidental cases such as the medical expenses, permanent disability expenses etc.

Recently, Indian Government increase the personal accidents coverage up to 15 lakhs, now
fraud which are based on the false accidents, fraudulent medical treatment, multiple claims
and identity fraud. These is the emerging fraud techniques which used by the fraudulent.

Labour charges- The charge related to the labour who repair the damage insured vehicle
is called Labour charges. The charges in Delhi region are depend on damages, area, and
insurance policy, here labour rate is depended on the experience and skill of labour or
workshop in Delhi, In Some insurance policy labour charges are predetermined by the Bajaj
General insurance but policy holder may negotiate the cost of the labour.

In Motor Insurance claim, Labour charges increase every year which create challenges in loss
minimisation.

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Challenges- parts and Labour inflation

More than half of the rise in average repair costs over the previous five year can attributed to
growing replacement part prices and labour costs.

 From 13 parts claim in 2021 to 19 pieces per claim in 2022, the average amount of
replacement components required per claim has increased considerably
 The increase is also supplemented by the rise in vehicle complexity which can
demand specific types of replacement parts. These parts require a significant share
labour operations which is also declining.
 The Manufacturers like Maruti, Hyundai, and Honda increased their labour costs by
19 to 21% and part price from 20% to 28% in last four years.

% Change in average % change in % change in

part cost average painting average RR cost
cost
Maruti 5% 10.20% 9.70%
Hyundai 8% 6% 6%
Toyota 5% 8% 3%
Kia 7% 7.90% 5%
VW 11% 10% 3%
TATA (PV) 7.5% 10% 5%

Based on Claim data analysis for the period of FY 2021 -22 TO Q3 FY 2022-23

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Challenges -OEMs, Dealers and their Expectations

Increasing pressure on margin on core sales for both OEMs and dealers, aging
car PARC and rising auto complexity (e.g. more electronics) will also result in
an increased claim cost.

 OEM are likely to focus on after sales parts and market because of the large profit
pools, OEM interest in insurance is likely to be around.
 Dealers view insurance as “high value -low effort” profit pool
 Dealers make high of 20 % on sale of parts and only 2% on sale of new cars

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 Dealers are likely to continue their focus on capturing renewals and selling after
sales

Challenges-Driving of claim to preferred partner workshops

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Difference between the waterborne paint of different model of HYUNDAI from 2018 to
2021

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Strategies for Reducing the loss in motor claim

The shift from the traditional to digital means the all the insurance policies from sales to
service are processed by the use of the technology like Artificial intelligence, Block chain
Technology, Telematics, Cloud computing etc.

The primary advantage of digital claims lies in its ability to meet the high expectations of
today's customers. In an era where instantaneous and seamless communication is the norm,
digital claims provide a solution that automates many interactions, ensuring swift and
efficient responses. Additionally, customers can conveniently manage their claims at any
time, day or night, enhancing the level of convenience and expediency they experience.

Nowadays, average of 61 percent of policy holder prefers digital tools to monitor their claim
process from the Claim Intimation to Claim Settlement or Reimbursement. The policy holder
forms the urban area prefer to less interaction with the people so urban people consume more
digital services specially after the covid 19. People prefer to consume touchless services
which increase the efficiency of the process of the product, Insurance claim process is the one
of the them. There is estimated that more than 50 % of claims processing will be based on the
automation by the end of the 2030.There are many technologies which can reduce the loss
minimisation in motor claim management.

Proactive Risk Mitigation Measures: -

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Block Chain Technology Blockchain is the integration of the Indian insurer, IIBA,
ROAD Transport Authority, Police department and ministry road and Highway which bring
the all the stakeholder on
the same platform. This
platform will provide the
For Example- If
Information of the FIR
lodged in police station

This technology help in

integrating database like

A Collection of the all the

information related to the insured vehicle help in the repudiate the fraudulent claim.

Telematics -Telematic is the device which analyse the date related to the behaviour of the
policy holder. Telematics systems make used of varied sensor and devices like GPS,
accelerometer onboard diagnostic tools to a acquire up to date details regarding elements
such as the car’s speed, acceleration, braking etc.

Telematics play important role while the assessing the accuracy of the claim like location of
the insured vehicle, risk exposure of the vehicle and evaluating the fault, fraud claim,
document and efficiently assesses the loss, basically it enhances the accuracy of the claim
settlement. This device accurately the measure the impact damage and measure the extent of
the damages, finally it calculates the loss cause by the external damage.

Finally, telematics technology provides the information related to the claim process which are
more accurate and reduce the claim processing costing, improve the customer satisfaction.

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Anti-theft gadgets play a critical part in engine protections by decreasing the hazard of
vehicle robbery and progressing the security of guarantor vehicles. Guarantees regularly offer
rebates or motivating forces to policyholders who introduce affirmed anti-theft gadgets.

Anti braking system may be a security framework that avoids the wheels from locking up
during sudden braking, permitting the driver to preserve directing control. ABS decreases the
hazard of slipping and makes strides braking viability, particularly on elusive or uneven street
surfaces
Gear locking device is equipping bolt gadget in an insured car can give an extra layer of
security against burglary and may moreover have an effect on the engine protections
approach, basically it prevents from the engine to start.

Global positioning system tracking system is device which locate the position of insured
vehicle in real time and helpful in tracking the insured vehicle and provide the details in theft
cases. Insurer should provide the discounting on the premium of insured vehicle which
decrease the risk of theft risk cases and also decrease the frequency of the claim in motor
claim.

Continuous data Analysis

Continuous data analysis is technique to improve the claim settlement in motor insurance,
here insurer may analyse the data in motor claim process. of the insured vehicle and
Continuous data analysis enhance the data verification of the insurer.

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This technology enhances the accuracy of the real time date like vehicle location, driving
behaviour and environmental conditions like the climate, Terrain, road conditions of their
insured vehicle. This information helpful in assessing the loss after the accidents.
This technology will be help in detecting the fraud claim in motor insurance claim
management. Insurer may analyse the previous data and insurer may found suspicious about
the claim pattern. policy holder may involve in the suppression of the material facts such non-
disclosure of location, impact damages moral hazard. Finally, data analysis provides the
information related to the fraud trend in industry and fraud prone area, pattern fraud insured
vehicle and similar type of the damage in insured vehicle.

It provides real data of cost related to the labour rates, spare parts rates, availability of the
child parts of insured vehicle, workshop, Surveyor, so insurer know the which workshop
favourable for the repairing process in same region of insured vehicle.
Finally, Continuous data analysis decrease the frequency of the claim and improves the
process of the insurer’s activity related to the claim of fraud detection which save the time
and monetary resources of Bajaj Allianz General Co. Limited.

Strengthening Risk Assessment

Insurer can strict the guidelines of the underwriting related norms which will be implement
on the particular model of the vehicle. Some model of the car has higher chance of the claim
due to their various factors like safety, build-up quality, safety measures etc. Few cars model
have more theft and accidents cases. Some vehicles are high performance in Rpm, Horse
Power which threat more risk and increase the frequency of the motor claim.
Insurer may decrease the discounting premium on these car model which has high chance of
the claim while issuing the motor insurance policy. Car models which have low chance of the
claim, insurer may increase the discounting on premium.
Insurer may consider the past record of the claim related to the motor insurance, few cases
Driver history play also important in claim process and we can also the history of driver,
owner etc.
Insurer should do separate underwriting for these models. The Fraudster intimate the claim on
certain type of the model, so insurer should not sell the policy on online platform for certain
model of the vehicle, Car owner should the nearest authorised workshop where motor
surveyor will assess the risk factors then policy should issue to the car owner.
If the Vehicle is not insurable then surveyor may cancel the motor insurance proposal

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This is the crucial point that different insurer may have the different underwriting experience,
norms and conditions which lead to the variation level of the premium.
Inflation refers to the general increase in manufacturing cost of spares parts of insured
vehicle. It also impacts the insurance which threat to reduction in the loss minimisation in
motor claim. In Delhi, Premium of motor insurance does not increase up to the inflation rate,
in other words rate of increase premium lower than the inflation, finally Insurance Regulatory
and Development Authority of India should make regulation related to the inflation. The
regulatory should observed the market prices and movement of spares goods, so it decreases
the threat of the loss reduction in motor insurance claim.

Direct and Indirect factors that could have a bearing on loss minimization
in motor insurance.
S. No Direct factors Indirect factors
1 Risk Scoring Awareness campaigns
for loss prone zones and
periods
2 IDV master and listing of safety features Training of company
of all models personnel and surveyors
3 Fraud Prevention Mechanism
4 Common Repository for declined
Proposal including inspection photographs
5 Part pays outs for various models-Detailed
analysis of each part for each model based
on loss experience
6 Hot-spotting of accidents based on
frequency and Severity
7 Cost of repair for comparable garages by
geography

Efficient Claim Investigation

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Efficient Investigation in motor insurance claim is the crucial step in the process of the claim
management system. Insurer may take various step for the efficiency in motor claim process.

Trained and technically skilled investigators should have the proper knowledge every aspect
of the investigation such as evidence collection, accident reconstruction, interviewing valid
techniques and investigator should have the fraud detection skills, understanding the common
pattern of the fraud prevailing in the motor claim. Investigator also have the negotiation
because they have to negotiate with the representative of the workshop and policy holder.
Investigator should have accurate knowledge about the cost of spares part, labour cost,
painting etc. They should have the accesses to data related to claim process such as live
location of the vehicle, insured’s name, Risk exposure etc.

In this way Investigator can detect the inflated claim, Fraud claims because they have
evidence related to the insured vehicle. Finally, Insurer will able to reject the claim and
reduce the loss minimisation in the motor claim.

Regular Policy Reviews

Regular Policy reviews are important techniques for the reduction in the loss minimisation in
motor claim management in Delhi’s Region. This Review evaluate the current coverage and
help in finding the further need for the insurance coverage deductibles, and optional coverage
options, Risk Exposure of the insured vehicle, Environmental circumstances and changing
driving habits, modification of insured vehicle then insurer adjust the policy coverage of
insured vehicle in Delhi’s Region.

Regular Policy review techniques the decrease the cost which are based on the market
conditions, insurer ‘s offer and policy holder explore the options to adjust the coverage while
potentially reducing premiums or finding more competitive rates with other insurers.
Technology may decrease the communication gap between the Policy holder and Insurer. The
Communication may include the question related to the coverage duration, Policy
clarification in Regional Language,

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We prefer to review the policy at least half yearly basis and this review describes about the
insured experience about the about the new location if insured move from one location to
another location where risk exposure may change according to the surrounding’s condition.

If the insured vehicle gets damage, then policy holder will not have to manipulate the
material facts of vehicle because they involve in the Regular Policy Reviews process and
adjusted their coverage. Finally, Insurer have the proper information about the adjusted
coverage in motor insurance. Here, Insurer will have to pay the claim for the adjusted
policy. In this way Insurer reduce the loss in motor claim pay out.

Efficient Claim Investigation

Efficient Investigation in motor insurance claim is the crucial step in the process of the claim
management system. Insurer may take various step for the efficiency in motor claim process.

Trained and technically skilled investigators should have the proper knowledge every aspect
of the investigation such as evidence collection, accident reconstruction, interviewing valid
techniques and investigator should have the fraud detection skills, understanding the common
pattern of the fraud prevailing in the motor claim. Investigator also have the negotiation
because they have to negotiate with the representative of the workshop and policy holder.
Investigator should have accurate knowledge about the cost of spares part, labour cost,
painting etc. They should have the accesses to data related to claim process such as live
location of the vehicle, insured’s name, Risk exposure etc.

In this way Investigator can detect the inflated claim, Fraud claims because they have
evidence related to the insured vehicle. Finally, Insurer will able to reject the claim and
reduce the loss minimisation in the motor claim.

Solution related to the Artificial intelligence based

Photography geometric using technology motor claim process which analysis on the basis of
photographs taken at the scenes of accident. This Technology measure extent of loss and

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determine the potential liability and cost of repair in motor insurance .Photography geometry
can be obtained through special life software and application that utilise computer vision and
images analysis techniques the photographs are then process using the photographic
geometric software may in object recognition, edge detection and 3D modelling to extract
geometric measurement from the images software analyse the parameter which are based on
vehicle dimension such as lengths width, meet heights ,location and extent of damages. This
technology also stores the data for upcoming claims and analyse the severity of damage
access the cost of repairing of the insured vehicle photographic geometric provide fast claim
process without any physical survey in many how many claims. It also solves the distribute
between the insured and insurers.

Finally, this technology has the evidence related to the claim process and detected the
damage, cost of repair automatically solves the claim of motor insurance which is related to
valid claims. In this way, it will reduce the losses in motor claim management.

CHAPTER -VI

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LEARNING AND RECOMMENDATIONS

The internship provided the chance to work with a key player and one of the leading insurers
in the Indian insurance market. This firm involve in the achieving of targeted market and
launched the creative product for comfortable for their insured vehicle and need of the policy
holder. The organization established the relation with various corporate firms.

Role of insurer in Indian Market

 Risk management- The main objective of BAGIC is to help in mitigation of risk
related to retail and corporate clients. The firm provides the commercial policies and
retails policy. These insurance policies cover the risk against the financial interest such
health insurance, motor insurance, EAR policy, fire policy, Contractor’s all risk policy,
LOP policy, Surety bond insurance etc.
 Product Innovation: - Insurers in the Indian market continuously innovate and
develop new insurance products to meet evolving customer needs and market
demands. They create policies tailored to specific segments, such as health insurance
plans for senior citizens, crop insurance for farmers, or cyber insurance for businesses.
Product innovation helps insurers stay competitive and provides customers with a wide
range of insurance options.
 Premium Collection: Insurers collect premiums from policyholders in exchange for
providing insurance coverage. Premiums are typically paid periodically, such as
monthly, quarterly, or annually, and the amount is determined based on factors such as
the level of risk, the type of coverage, and the insured party's profile. These premium
payments enable insurers to pool funds and cover the costs of claims.
 Regulatory Compliance: Insurers in India must adhere to regulatory guidelines and
requirements set by the Insurance Regulatory and Development Authority of India
(IRDAI). They must obtain proper licenses, maintain adequate solvency margins,
comply with pricing and product regulations, and submit regular reports to the
regulatory authority. Compliance with these regulations ensures consumer protection
and maintains the stability of the insurance market.
 Motor Claim Management System -BAGIC maintained the unique system for the
claim settlement process in motor claim. BAGIC settle the claim through the various
method like field survey, on time claim settlement, pay as you drive, OCR (Optical
character Recognition), live video streaming etc. These methods reduce the duration in

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motor claim process. These methods use on the basis of claim size, location, insured
model, accidents, insured declared value etc. Turnaround time depend on the type of
claim, complexity of the cases, Claim size. BAGIC Successfully decrease the TAT to
provide satisfactory service to their policy.

Findings

Strengths:

 Presence of an effective claim team

 Immediate claim from the customers

Weakness:

 Lack of awareness among the customers about the depreciation, coverage/exclusions

 Various problems with the workshop
Opportunities

 The rating of the customers for Bajaj Allianz is average

 Create more awareness among the customers regarding the call centre number
 Decrease the TAT for survey and claim settlement
 Lesser impact of underwriting and marketing on claims
 Need to build the brand name in the minds of customers
Threats:
 Fraudulent claims
 Increasing competition from other private players

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RECOMMENDATIONS
 BAGIC MECHANIC Mobile application- BAGIC should make the mobile application
which will be used by the claim department such as manager, surveyor, customers etc.
This mobile application the show the availability of the child parts of insured vehicle and
other spares of insured vehicles. Sometimes, BAGIC Employee do not have the aware
about the child part availability of damaged parts, finally surveyor prefer entire kit of
insured instead of repair. Replacement of kit is more expensive than child parts.
In this way, pay out of insured vehicle increases which create threat to the process of loss
minimisation in motor claim.
Surveyor should also have the access to BAGIC MECHANIC mobile apps in which can
update the standardisation of the workshop and dealer. This Updation of rating of the
workshop will be based on the services quality such as the such as fair rate of spares
parts, reasonable labour and painting charges etc. This mobile application will be
beneficial in claim settlement process.

Interface of mobile application

 Each and every logo of automobile company show the availability of child parts
 In this mobile surveyor may give rating to their workshop.

  Reduce the TAT for claim settlement

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Delayed claim settlement generally results in higher claims cost. It is important for the
company to keep a check on the claim life. High claim life will not only lead to
dissatisfaction of customers but it will also increase the cost for the company.
 Claim files should be monitored as they progress
A little time spent thinking clearly right from the beginning will avoid lot of unnecessary
and time-consuming patch-ups and straightening out later on. Unpleasant decisions
conveyed timely with proper justification of the decision is better than procrastination
which is bound to create more problems and unpleasant situations.

Proper underwriting guidelines to be followed

Proper underwriting guidelines need to be followed. This will reduce the work for the
claim department and which will then reduce the TAT for the claim settlement.
Defective underwriting results in complication at the time of settlement of claims.
 It is mandatory for the underwriter to verify NCB while underwriting a policy.
However, this is ignored in certain cases, which has affected at the time of
claim. If NCB is not verified, it may also lead to repudiation of claim.
 The damages should not be overlooked at the time of pre-inspection of
vehicle. Each and every minute detail which might help at a later stage should
be noted down.

Interface of mobile application

 Each and every logo of automobile company show the availability of child parts
 In this mobile surveyor may give rating to their workshop.

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Customer awareness-Customer awareness is an important aspect which should been

taken care by the insurance company. The customer should be made aware about the policy
coverage/exclusions by the intermediaries at the time of selling insurance policy.

Customers should also be informed about the depreciations that are charged on various parts
of the vehicle well before the settlement. This will help in eliminating the dispute between
insured and the insurer at the time of settlement. Awareness should be in regional language so
that policy holder will able to understand the policy terms and conditions.

Proper field work

During field work a number of things need to be kept in mind by the surveyor.
 Customers should be encouraged to have repairs in the Company tie-up
workshops to avoid frauds to a certain extent. Also, the surveyor must have
some practical knowledge to bargain with the workshop in case of inflated
bills.
 Also, post repair, the surveyor should be asked to confirm that the repairer has
charged only for the work actually done. This may entail a second visit to the
repairer, but if the Insurers insist and make this a part of their deal at the time
of appointing the surveyors, they would stand to gain in the long run.

Inflation refers to the general increase in manufacturing cost of spares parts of insured
vehicle. It also impacts the insurance which threat to reduction in the loss minimisation in
motor claim. In Delhi, Premium of motor insurance does not increase up to the inflation rate,
in other words rate of increase premium lower than the inflation, finally Insurance Regulatory
and Development Authority of India should make regulation related to the inflation. The
regulatory should observed the market prices and movement of spares goods, so it decreases
the threat of the loss reduction in motor insurance claim. It refers to the general increase in
manufacturing cost of spares parts of insured vehicle. It also impacts the insurance which
threat to reduction in the loss minimisation in motor claim. In Delhi, Premium of motor
insurance does not increase up to the inflation rate, in other words rate of increase premium
lower than the inflation, finally Insurance Regulatory and Development Authority of

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India should make regulation related to the inflation.IRDAI should increase the rating of
Tariff of motor insurance to beat the inflation, so IRDAI should revised the premium rate on
the basis of the inflation. The regulatory should observed the market prices and movement
of spares goods, so it decreases the threat of the loss reduction in motor insurance claim. In
this way these guidelines are remedial solution for their reduction in loss in motor insurance.

CHAPTER -VII

REFERENCES

 https://www.bajajallianz.com/
 https://irdai.gov.in/
 https://www.cii.co.uk/
 https://scholar.google.com/
 Motor vehicle claims challenges in Kenya and development of a Claims Bot application
prototype. Diss. University of Nairobi, 2021. Author- ABIYO, MOLTOT.
 Motor vehicle claims challenges in Kenya and development of a Claims Bot application
prototype. Diss. University of Nairobi, 2021. Author - Kaguthai, Antony
 Assessment of customer claim handling practices and challenges in the case of nyala
insurance (doctoral dissertation, st. Mary’s university). Author-

BOOKS

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 IC 72 MOTOR INSURANCE (Insurance Institute of India)

 M05 CII UK (Insurance law) -Chartered insurance institute, UK
 IRDAI ANNUAL REPORT 2021-22
 Marketing Research by N.K. Malhotra and S Dash

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APPENDIX

Structured in-depth interview questionnaire for employees, Surveyor, workshop dealers

etc.
Purpose of the interview:
To understand the problems faced by the employees in management of Motor Insurance
(Own Damage) claims.
1. Are there any issues being faced in the preliminary stage of claims management
process (issues with the customer at the time of claims registration)? How are these
issues handled?

2. What is the effect of marketing on claims?

3. What is the effect of underwriting on claims?

4. What are challenges in faced by the motor claim department to reduction in motor
claim’s loss?

5. What are the difficulties being faced by the Surveyor during field work?

6. What are the documents that you verify at the time of claim?

7. What are the problems faced by you at the time of claim settlement?

8. What are the various reasons for repudiation of motor insurance claims?

9. What would be the strategies for the reducing the fraud claim in motor claim?

10. What are the major types of the fraud claim in motor claim?

11. What are the basic reasons for the repudiate the claim in motor claim?

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