TURN AROUND TIME IN INSURANCE

The full form of TAT is Turnaround Time. In the insurance sector, TAT refers to the time required to complete a specific process or request, such as processing and approving a claim, issuing a policy, or responding to customer queries. Maintaining shorter TATs is a critical goal for insurance companies to enhance customer satisfaction and operational efficiency.

 

 

Regulatory Standards for TAT in India

The Insurance Regulatory and Development Authority of India (IRDAI) mandates specific TATs for various insurance processes. For example, death claims must be settled within 30 days of receiving all required documents. Failure to adhere to these timelines can result in penalties for the insurer. Many insurance companies highlight their quick TATs (e.g., "Claims processed within 24 hours") as a competitive advantage to attract customers.

Benchmarks and Factors Influencing TAT

Insurance companies establish TAT benchmarks based on industry standards, regulatory requirements, and internal goals. To maintain efficient TATs, they invest in:

• Automation: Automated processes, like digital claims filing, minimize human intervention, leading to faster results.
• Customer Communication Tools: Digital platforms, such as apps, SMS updates, and email alerts, keep customers informed, reducing the need for follow-ups.

Importance of TAT in Insurance

1. Claim Processing

• Health Insurance: TAT for cashless hospitalization claims can be as short as 2-3 hours, while reimbursement claims may take 7-15 days.
• Motor Insurance: Minor damage claims often have a TAT of 2-3 days, whereas total loss claims may take weeks.
• Life Insurance: TAT ranges from 15 to 30 days after all required documents are submitted.

Efficient claim processing TATs reflect the insurer's commitment to timely resolution, fostering customer trust.

2. Policy Issuance

• Basic policies, like motor insurance, may have TATs of just a few minutes to hours if processed online.
• Comprehensive policies, such as life or health insurance requiring underwriting, might take 7-14 days.

Fast policy issuance ensures timely coverage, reducing the risk of being uninsured and showcasing the insurer’s technological capabilities.

3. Renewals

Renewals typically have shorter TATs since they often involve minimal underwriting. Online renewals may be instant, while manual processes can take 1-3 business days. Quick renewals ensure uninterrupted coverage and build customer loyalty.

4. Customer Support

TAT for customer queries can range from immediate responses via chatbots to 24-48 hours for email inquiries. Prompt responses improve customer satisfaction and retention.

5. Underwriting

Simplified products with automated underwriting can offer instant decisions. Complex policies, like health or life insurance requiring medical tests, may take 7-14 days. Faster underwriting improves customer experience and provides a competitive edge.

6. Payment Disbursal

Once a claim is approved, payment TATs usually range from 1 to 7 business days, depending on the payment method. Quick disbursal builds trust and eases financial stress for policyholders.

Benefits of TAT in Insurance

1. Enhanced Customer Experience: Shorter TATs ensure faster service, making customers feel valued.
2. Operational Efficiency: Clear benchmarks help insurers identify and resolve bottlenecks.
3. Competitive Advantage: Insurers with shorter TATs attract more customers in a competitive market.
4. Customer Retention: Meeting TAT expectations builds trust and encourages policy renewals.
5. Reputation Management: Consistently delivering on TAT commitments enhances brand credibility.

Steps to Apply for a TAT Claim Process

1. Review Policy Terms: Understand what is covered and the specific TAT for claims.
2. Notify the Insurer: Inform the insurer immediately via their website, app, helpline, or email.
3. Fill Out the Claim Form: Provide accurate details, including policy number and incident information.
4. Submit Required Documentation: Ensure all necessary documents are complete, such as medical reports, FIRs, or death certificates.
5. Track Claim Status: Use online tracking tools or customer support for updates.
6. Follow Up: Contact the insurer if processing exceeds the stated TAT.
7. Receive Claim Payout: Approved claims are usually disbursed within 7 days.
8. Escalate if Necessary: If TAT commitments are not met, escalate the issue to the insurer’s higher authorities or the IRDAI.

Tips for Ensuring Faster TAT

• Provide accurate information to avoid delays.
• Keep all required documents ready.
• Opt for digital submission for quicker processing.
• Regularly monitor your claim status.

Conclusion

Understanding what is TAT in insurance and its significance is essential for both customers and insurers. TAT ensures processes like claim settlement and policy issuance are handled efficiently, improving customer satisfaction. Staying proactive and informed about TAT can help policyholders avoid unnecessary delays. If insurers fail to meet TAT standards, customers can escalate the issue to relevant authorities.

FAQs on TAT in Insurance

Q1. What is the full form of TAT in insurance?
Ans: The full form of TAT is Turnaround Time.

 

Q2. Why is TAT important in insurance?
Ans: TAT ensures prompt processing of claims, policy issuance, and customer queries, leading to better customer satisfaction.

 

Q3. What does TAT mean in insurance?
Ans: TAT refers to the time taken by an insurer to complete processes like claim settlement or policy issuance.

 

Q4. Do all insurance companies have a TAT?
Ans: Yes, all insurers define TATs for processes to ensure timely service delivery.