Insurance interview questions, updated for 2026 rules
89 questions from core to advanced: concepts, calculations, whiteboard diagrams, SQL, scenarios and behavioural. Answer out loud first, then reveal the model answer and example. Mark each one practised when you can answer it without looking.
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What is insurance, and how does an insurer make money?
- Risk transfer: many pay a small certain premium, the few with losses are paid.
- Underwriting profit when the combined ratio is under 100%.
- Investment income on the float (premium held before claims are paid).
Explain the principles of insurance with a system example for each.
- Utmost good faith → proposal declarations and moratorium rules.
- Insurable interest → RC owner must be the proposer for motor.
- Indemnity → IDV and depreciation cap the payout.
- Contribution → CPA waiver when another PA cover exists.
- Subrogation → insurer recovers from the at-fault party.
- Proximate cause → claim admissibility rules.
Difference between life, general and standalone health insurers?
- Life: long-term protection and savings, mortality-based.
- General: motor, property, liability, mostly annual.
- Standalone health: health only; general insurers also sell health.
- The composite licence idea was dropped from the 2025 amendment, so these stay separate.
What are loss ratio and combined ratio, and why do they matter to a BA?
- Loss ratio = claims incurred ÷ earned premium.
- Combined ratio = (claims + expenses) ÷ earned premium.
- Features that cut leakage (fraud rules, STP) or expenses (digital journeys) show up directly in these numbers, so they make strong success metrics.
Who are the intermediaries in Indian insurance?
- Individual agents and corporate agents (banks as bancassurance).
- Brokers (represent the customer), web aggregators, POSP, Insurance Marketing Firms.
- Motor dealers act as corporate agents or POSPs; IRDAI's 2026 proposal would let qualifying dealers register as distribution entities.
What is reinsurance and why would it affect a system you build?
- Insurance for insurers: treaty or facultative, proportional or excess of loss.
- Systems must capture cession, retention limits and recoveries per policy or claim.
- Obligatory cession to GIC Re applies.
Explain OD, TP, add-ons and CPA. Which are mandatory?
- OD covers damage to your own vehicle; optional.
- TP covers liability to others; mandatory under the Motor Vehicles Act.
- CPA (₹15 lakh) is mandatory for an individual owner-driver unless they have no licence, another CPA, or a standalone PA of ₹15 lakh+.
- Add-ons extend OD and are optional.
How is IDV calculated for a 26-month-old car with an ex-showroom price of ₹8 lakh?
- 26 months falls in the 2–3 year band → 30% depreciation.
- IDV = 8,00,000 × 0.70 = ₹5,60,000.
- Customer can move it ±15%: ₹4,76,000 to ₹6,44,000 without referral.
Walk me through the premium calculation from IDV to the final amount.
- Basic OD = IDV × tariff rate × (1 − de-tariff discount).
- Add accessories and CNG → subtotal OD; add loadings, subtract discounts.
- Apply NCB on OD before NCB.
- Add TP slab, CNG ₹60, PA passengers, legal liability, CPA; add add-ons.
- Net premium + 18% GST (goods-carriage TP 5%).
What are the current third-party premiums for cars and two-wheelers?
- 2022 Rules, in force since 1 June 2022: car ₹2,094 / ₹3,416 / ₹7,897 for ≤1,000 / ≤1,500 / >1,500 cc.
- Two-wheeler ₹538 / ₹714 / ₹1,366 / ₹2,804.
- A 10–25% hike has been under review but was not gazetted as of October 2026, so rates must be effective-dated in systems.
What happens to NCB on a claim, a break-in, or a change of vehicle?
- Claim → NCB resets to 0 unless NCB protect was bought.
- Break of more than 90 days → NCB lost.
- Selling the vehicle → NCB stays with the owner; an NCB reserving letter transfers it to the new vehicle.
- NCB slabs: 20, 25, 35, 45, 50%.
When is vehicle inspection required?
- Break-in cases.
- Ownership transfer / used vehicle.
- Adding add-ons or a CNG kit not on the previous policy.
- Policy issues only after a Recommended inspection report.
Why must a new car have a 3-year TP and a new two-wheeler a 5-year TP?
- Supreme Court direction in 2018 to raise TP coverage on new vehicles.
- Leads to bundled (1 OD + 3/5 TP) and long-term TP variants, and later SAOD for the OD renewal.
- Systems must check TP validity before selling standalone OD.
How are EVs and hybrids treated in motor rating?
- TP uses kW slabs for EVs (car ≤30 kW ₹1,780).
- Hybrids get 7.5% off TP.
- The old OD tariff has no kW slabs, so insurers file their own EV OD rates; EV add-ons cover battery and charger.
- Goods-carriage EVs have their own GVW TP table.
How is a goods carrying vehicle priced differently from a private car?
- Zones A, B, C (C = rest of India).
- TP by gross vehicle weight: ₹16,049 up to 7.5 t to ₹44,242 above 40 t.
- OD adds ₹27 per 100 kg above 12,000 kg.
- GST: 5% on the TP portion, 18% on the rest since 22 Sep 2025.
What is Pay As You Drive and what data does it need?
- IRDAI allowed PAYD and Pay How You Drive OD add-ons in July 2022.
- Needs odometer or telematics data, driving behaviour scores, consent under DPDP.
- BA work: new rating factors, data ingestion APIs, renewal re-rating logic.
Describe the motor OD claims process.
- FNOL via app or call centre → claim number.
- Surveyor appointed for larger losses; photo-based assessment for small ones.
- Cashless at network garage or reimbursement.
- Depreciation applied unless zero-dep; compulsory deductible deducted.
- Total loss when repair cost exceeds about 75% of IDV; salvage handled by insurer.
How are TP injury and death claims settled, and what changed in 2026?
- Filed at the Motor Accident Claims Tribunal; liability unlimited for bodily injury.
- Insurer pays the award and may recover from the owner if policy conditions were breached.
- A June 2026 Supreme Court ruling recognised the economic value of homemakers' work, raising compensation and TP claim costs without a premium revision.
Individual vs family floater: when would you recommend each?
- Floater: one shared SI, cheaper for young families.
- Individual: each member has own SI; better when ages differ widely or a member has PED.
- Floater premium is driven by the eldest member.
What factors drive a health premium?
- Age, sum insured, zone, medical history, lifestyle, BMI.
- Deductible and co-pay reduce it; multi-year tenure gets a discount.
- Add-ons (room rent waiver, maternity, CI) increase it.
STP vs NSTP in health. What can the underwriter decide?
- STP: under 45, SI up to ₹10 lakh, no PED, BMI in range.
- NSTP: pre-policy medical check-up and underwriter review.
- Decisions: accept, accept with loading, special conditions, counter offer, reject.
What are the current IRDAI timelines for cashless claims?
- Pre-authorisation decided within 1 hour.
- Final discharge authorisation within 3 hours of the request.
- System need: timers, auto-escalation, TAT reporting.
What is the moratorium period and why was it cut to 5 years?
- After 5 continuous years, claims cannot be contested for non-disclosure except fraud (was 8).
- Protects long-standing customers; insurers must underwrite properly at entry.
- BA impact: continuous-coverage tracking, including ported years.
Explain waiting periods.
- Initial 30 days (accidents excluded).
- Specific illnesses (cataract, hernia, joint replacement) usually 2 years, capped at 3.
- PED at most 3 years (was 4).
- Maternity often 2–4 years. Portability carries served waiting periods.
What is NHCX and how would you approach an integration?
- National Health Claims Exchange under ABDM; FHIR-based eligibility, pre-auth, claim and payment messages.
- Advised by IRDAI, not legally mandated.
- Approach: map internal claim fields to FHIR profiles, handle async status, reconcile with TPA systems, test with sandbox.
What changed for senior citizens and entry age?
- No upper entry-age limit for buying health insurance.
- Senior renewal increases capped at 10% a year without IRDAI approval.
- Insurers must offer products for seniors.
Why are health claims rejected, and how would you reduce wrongful rejections?
- Waiting period, non-disclosure, exclusions, documentation gaps, room-rent proportionate deduction.
- Fixes: clear CIS at sale, rule transparency in claim decisions, checklist-driven document upload, second-level review before rejection.
Term vs endowment vs ULIP?
- Term: pure protection, cheapest.
- Endowment: savings plus protection, guaranteed or bonus-based.
- ULIP: market-linked, 5-year lock-in, charges disclosed.
- Individual life premiums are GST-free since 22 Sep 2025.
What is persistency and why do insurers track it?
- Share of policies still paying at the 13th, 25th, 37th, 49th, 61st month.
- Low persistency signals mis-selling, which IRDAI flagged as a significant concern.
- BA angle: renewal reminders, auto-debit mandates, early-lapse analytics.
Name the main commercial lines.
- Fire and property (Bharat Sookshma and Laghu Udyam), marine, engineering.
- Liability (public, product, D&O, professional indemnity), cyber.
- Group health and group term (still 18% GST).
What did the Insurance Laws Amendment Act 2025 change?
- Passed 17 Dec 2025 as Sabka Bima Sabki Raksha.
- 100% FDI in insurers; IRDAI can cap commissions and order disgorgement.
- Lower net owned funds for foreign reinsurers; policyholder education and protection fund.
- Composite licence dropped.
What is Bima Sugam and where is it now?
- IRDAI's digital insurance marketplace, launched 17 Sep 2025.
- Phase 1 live: compare, buy, renew, e-insurance account; phase 2: claims, hospital and TPA integration, portability.
- Full transactional go-live guided for about November 2026.
- Bima Pehchaan gives each person a lifelong insurance ID.
How does the DPDP Act affect insurance journeys?
- Rules notified 13 Nov 2025; consent managers from Nov 2026; core obligations from May 2027.
- Need purpose-specific consent, notices, erasure and correction flows.
- Breach: notify affected people and the Board without delay, detailed report within 72 hours; penalties up to ₹200 crore.
What is Ind AS 117 / IFRS 17 and why would a BA care?
- Insurers adopt Ind AS from 1 Apr 2026, with relief and up to 2 years of parallel reporting.
- Profit recognised over the contract's life using groups of contracts.
- Needs granular policy, cash flow and claims data with lineage: big data and reporting projects.
What did IRDAI propose for motor distribution in 2026?
- Motor policies available on Bima Sugam; dealers must show a QR code for the digital option.
- Qualifying dealers register as distribution entities and can sell multiple insurers.
- No denial of cashless repair because the policy was bought elsewhere.
- Lower commissions on TP, which rose from 4.3% (FY23) to 22% (FY25).
What is 'Insurance for All by 2047'?
- IRDAI's mission to cover every citizen and business.
- Pillars: Bima Sugam, Bima Vistaar (bundled life, health, accident, property), Bima Vahak (women-led rural distribution), state insurance plans.
- Context: penetration stuck at 3.7% of GDP in FY25.
How did GST on insurance change in September 2025?
- From 22 Sep 2025, individual health (including floater and senior) and individual life went from 18% to 0%.
- Group health and group life stay at 18%.
- Goods-carriage TP cut from 12% to 5%; motor otherwise 18%.
You own a GST module built in 2022. What would you change?
- Add a rate rule by product and cover type before the state rule (CGST + SGST / UTGST vs IGST).
- Split goods-carriage invoices: TP at 5%, OD and add-ons at 18%.
- Zero-rate individual health and life; keep group at 18%.
- Effective-date by premium payment date; regression-test endorsements and credit notes.
How is the health insurance tax deduction claimed now?
- Income-tax Act 2025 from 1 Apr 2026: section 126 replaces 80D.
- ₹25,000 for self and family, ₹50,000 if senior; separate limit for parents.
- Old regime only; cash premiums not allowed (except preventive check-ups).
Explain the GSTIN validation rule.
- 15 characters: 2-digit state code, 10-character PAN, entity number, a character, check digit.
- Same state as sourcing branch → CGST + SGST; union territory → CGST + UTGST; different → IGST.
- No GSTIN → use customer postal code against branch.
What artefacts would you produce on an insurance project?
- BRD / FRD, product configuration and rating specs.
- Process maps, user stories with Gherkin criteria, decision tables.
- Data mapping for APIs, UAT scenarios with expected premiums, traceability matrix.
Write acceptance criteria for an IDV deviation rule.
- Given system IDV ₹5,00,000, when the user enters ₹5,60,000 (+12%), then the quote proceeds.
- When the user enters ₹6,00,000 (+20%), then the proposal is referred to an underwriter and cannot be issued without approval.
- Boundary tests at exactly −15% and +15%.
How do you run impact analysis on a new IRDAI circular?
- Read and summarise obligations with the compliance team.
- Map to products, journeys, systems, documents, communications and regulatory returns.
- Size changes, effective-date rules, plan regression, get sign-off, track to closure.
Why must rate tables be effective-dated?
- Rates change by notification (TP slabs, GST).
- Quotes, endorsements and renewals must use the rate valid on the relevant date.
- Never overwrite: add a new row with a start date and close the old row.
What KPIs would you track for a digital motor renewal journey?
- Renewal conversion, drop-off by step, STP rate.
- Time to renew, payment failure rate, NCB carry-forward accuracy.
- Complaints and call-centre deflection.
How do you validate a rating engine during UAT?
- Build expected-result sheets from the rating spec, for example a spreadsheet that works each quote out step by step.
- Cover every slab boundary, zone, age band, discount cap and NCB slab.
- Compare engine output line by line, not just totals; log differences with the formula.
The rating engine shows a premium ₹150 lower than the actuarial sheet. How do you investigate?
- Compare line by line: OD, loadings, discounts, NCB, TP, add-ons, GST.
- Check rounding (per line vs total), effective dates, rate versions, discount caps.
- Reproduce with one test case, document root cause, add a regression test.
Design an AI-assisted motor claims flow. Where is the human in the loop?
- Customer uploads photos → AI damage detection and repair estimate.
- Auto-approve under a value and confidence threshold; refer otherwise.
- Fraud score and policy checks run in parallel.
- Human surveyor for high value, low confidence, or fraud flags; every decision logged for audit.
How would you gather requirements for a Bima Sugam integration?
- Study the published API and standard forms; identify insurer-side gaps.
- Workshops with product, IT, compliance, finance.
- Define product catalogue mapping, quote and issuance APIs, payment and policy status callbacks, e-insurance account linkage.
- Plan sandbox testing and reconciliation.
A customer's renewal shows 0% NCB but they claim 3 claim-free years. What do you check?
- Gap between expiry and renewal (over 90 days → lost).
- Any claim on the expiring policy, ownership change, previous insurer confirmation.
- Data migration or rollover capture errors; NCB declaration and verification process.
Business wants straight-through issuance for health up to ₹25 lakh SI. How do you respond?
- Clarify the goal (conversion vs risk).
- Bring loss data: higher SI drives anti-selection.
- Propose tiered STP with digital medical questionnaires, tele-underwriting, data-based risk scores, and monitor claim ratios after launch.
The TP revision is notified with 15 days' notice. What is your plan?
- Load new slabs as new effective-dated rows; keep old rows for back-dated quotes.
- Check long-term TP and bundled variants, EV and hybrid logic, commission impact.
- Update portals, aggregator APIs and premium tables in communications.
- Regression on all business types; go-live checklist with rollback.
Where can GenAI add value in insurance today?
- Customer service agents for quotes, renewals, claim status.
- Document extraction for claims and underwriting.
- Copilots for agents and underwriters; summarising medical records.
- Always with guardrails, human review for decisions, and DPDP-compliant data use.
What core systems do insurers run?
- Policy admin (Guidewire, Duck Creek, Majesco, TCS BaNCS), rating engine, claims, billing.
- Distribution portals and APIs, CRM, data warehouse.
- Trend: cloud PAS, low-code product configuration, microservices.
How would you control bias and errors in an AI underwriting model?
- Define permitted features; exclude protected attributes and proxies.
- Explainability for every decision; monitoring of approval rates by segment.
- Human override and appeal path; periodic validation with actuarial and compliance teams.
Why do you want to work in insurance?
- Insurance is rule-heavy and data-rich, so precise requirements save real money and protect customers.
- Link your past work to an insurance problem: automation to STP, analytics to fraud or pricing, product work to digital journeys.
- Show you have done the homework: mention one recent change, such as the 2025 GST exemption or Bima Sugam.
Example'In my last role I automated approval rules for loan applications. Insurance underwriting is the same problem with more regulation, and the recent IRDAI push for faster cashless claims is exactly the kind of rule-driven change I enjoy delivering.'Tell me about a defect you found in a calculation.
- Situation and task: what you were testing and why it mattered.
- Action: how you designed boundary and negative tests, and how you proved the root cause.
- Result: the fix, the money or customers protected, and the test you added so it cannot recur.
ExampleSituation: UAT of a motor IDV screen. Task: validate the ±15% IDV rule. Action: entered values just inside, at and beyond the limit, and found ₹6,90,000 accepted on a ₹5,95,000 system IDV (16% over). Result: the limit was being checked against the ex-showroom price instead of the system IDV; fixed, with boundary tests added to the regression pack.Describe working with stakeholders who had conflicting requirements.
- Make the trade-off visible: impact on customers, revenue, risk and cost.
- Bring data rather than opinions, and find the decision owner.
- Close with the outcome and what you learned.
ExampleSales wanted no inspection for policies renewed up to 15 days late; underwriting wanted an inspection for any gap. I pulled 12 months of break-in claims, showed most fraud came after day 7, and we agreed self-video inspection after 7 days. Renewal conversion rose and break-in claims did not.Tell me about delivering a change against a regulatory deadline.
- Show how you broke the regulation into requirements quickly.
- Explain how you prioritised: what must be live on the date versus what can follow.
- Mention compliance sign-off, regression and communication.
ExampleWhen individual health GST became 0% from 22 September 2025, the team had about two weeks. I listed every product, document and report affected, split must-have (rating, invoice, receipts) from follow-up (MIS), ran regression on 150 saved quotes and got compliance sign-off two days before the date.How do you learn a new domain quickly?
- Start with the money: who pays whom, and how the business makes a profit.
- Learn the core process end to end and draw it.
- Read the regulator's key circulars, then test your understanding with the actual systems and data.
ExampleFor insurance: study the quote-to-policy journey, work a premium by hand, read IRDAI's health master circular and shadow a claims team for a day.A customer wants to renew standalone OD, but their long-term TP expired yesterday. What should the system do?
- Standalone OD can only be sold when a valid TP policy exists, so the sale must be blocked.
- Offer a comprehensive policy (OD + TP) instead, and explain why.
- Check TP validity from the previous policy or VAHAN data before showing the SAOD price, not at payment.
ExampleAcceptance criterion: Given TP end date 25 October 2026 and policy start 26 October 2026, When the user selects standalone OD, Then show 'Third-party cover has expired; choose a comprehensive policy' and hide the SAOD option.Two insurers quote very different OD premiums for the same car. Why?
- Each insurer sets its own de-tariff discount on the old tariff rate, based on its claims experience.
- IDV choice differs: one may default to the lowest allowed IDV.
- Add-ons are priced differently, and some bundle them.
- TP is identical everywhere because it is fixed by the 2022 Rules.
ExampleOn the default car, changing the de-tariff discount from 55% to 40% raises basic OD from about ₹8,790 to ₹11,720, while TP stays at ₹3,416.A customer ported after 2 years on ₹5 lakh to a ₹15 lakh policy. In year 2 of the new policy they claim ₹8 lakh for a declared pre-existing disease (3-year wait). What is paid?
- Waiting periods served carry over only up to the previous sum insured.
- On the first ₹5 lakh: 2 + 2 = 4 years served, so the PED wait is over.
- On the extra ₹10 lakh: only 2 years served, so the PED is still excluded.
- Pay ₹5 lakh; the remaining ₹3 lakh is not covered this year.
ExampleNext year (year 3 on the new policy) the extra ₹10 lakh has served 3 years, so the full ₹8 lakh would be payable.The business wants a 25% renewal increase for senior citizens. What do you say?
- Increases above 10% a year for senior citizens need IRDAI approval first.
- Ask for the claims data that justifies it and the filing plan.
- Plan customer communication, portability options and the system change for renewal notices.
- Model the impact on retention and complaints.
A term policyholder dies in year 2. The insurer finds undisclosed smoking. Can it reject the claim?
- Under section 45 of the Insurance Act, within 3 years of the policy the insurer can repudiate for material misstatement or fraud, with reasons in writing.
- If the misstatement was not fraudulent, premiums collected are refunded to the nominee.
- After 3 years the policy cannot be questioned on any ground.
- BA angle: underwriting evidence, claim investigation workflow and communication templates.
Explain the free-look period and its system impact.
- 30 days from receipt of a new life or health policy to return it.
- Refund = premium − proportionate risk premium − medical costs − stamp duty (for ULIPs, based on fund value).
- Systems need the policy receipt date, a refund calculator, commission clawback and GST reversal.
A customer withdraws marketing consent under DPDP and asks you to delete their data. They hold an active health policy. What happens?
- Stop marketing immediately: consent for marketing is separate from the contract.
- Data needed to perform the contract, pay claims and meet legal retention rules can be kept.
- Delete what has no other lawful basis, and record the request and the outcome.
- Tell the customer clearly what was kept and why.
Production defect: for 3 weeks, 2,000 car policies were issued with NCB applied to third-party premium. What do you do?
- Contain: stop the defect (hotfix or rule switch) and confirm no new policies are affected.
- Quantify: list the policies and the TP shortfall per policy.
- Decide with compliance and finance: TP is a statutory premium, so the shortfall must be handled; agree whether the insurer absorbs it or collects it.
- Fix root cause, add regression tests, and report what happened.
ExampleRoot cause: the NCB rule was applied to 'subtotal' after a refactor instead of 'OD before NCB'. New test: NCB line must never change when only TP inputs change.Estimate how many private car policies come up for renewal in India each month.
- State the method before the numbers: interviewers judge structure, not the exact answer.
- Cars on the road × share with active insurance ÷ 12, since most policies are annual.
- Adjust for new cars on 3-year TP (their OD still renews yearly) and policies that lapse.
- Sense-check against a source if one is available.
ExampleAssume 5 crore cars and 60% insured: 3 crore policies ÷ 12 ≈ 25 lakh renewals a month. These are assumptions for the method, not market data.Claim turnaround in health has slipped from 2 hours to 5 hours for discharge. How do you find the cause?
- Break the time into stages: hospital request, TPA receipt, document check, decision, communication.
- Use timestamps from the claim system to find which stage grew.
- Check volume, staffing, rule changes and integration failures for that period.
- Remember the 3-hour rule: late approvals cost the insurer money, so quantify that too.
Design a motor quote API for aggregators. What goes in it?
- Request: registration number or make/model/variant, city, registration date, previous policy and NCB, claim history, cover choice, add-ons.
- Response: quote ID, validity, IDV range, premium lines (OD, TP, CPA, add-ons, GST), and any referral reasons.
- Errors: invalid vehicle, TP still active (for comprehensive), break-in needing inspection.
- Non-functional: response time, idempotency, versioning, consent and logging.
Work out the premium: IDV ₹5,95,000, policy OD rate 1.477%, NCB 25%, 1,197 cc car, CPA ₹330, zero depreciation 0.35% of IDV, roadside assistance ₹199.
- Basic OD = 5,95,000 × 1.477% = ₹8,790.
- NCB 25% = −₹2,198, so OD = ₹6,593.
- TP for 1,000–1,500 cc = ₹3,416; CPA ₹330.
- Add-ons = 2,083 + 199 = ₹2,282.
- Net ₹12,620 + GST 18% ₹2,272 = ₹14,892.
Room-rent limit ₹5,000 a day; the patient chose an ₹8,000 room for 4 days. Bill: room ₹32,000, other room-linked charges ₹88,000, medicines ₹80,000. What does the insurer pay?
- Proportion = 5,000 ÷ 8,000 = 62.5%.
- Room: 4 × ₹5,000 = ₹20,000.
- Other room-linked charges: 88,000 × 62.5% = ₹55,000.
- Medicines are not cut: ₹80,000.
- Insurer pays ₹1,55,000; customer pays ₹45,000 of a ₹2,00,000 bill.
ExampleLesson for customers and BAs: a ₹3,000 room upgrade cost this patient ₹45,000.Base policy ₹5 lakh plus either a top-up or a super top-up of ₹10 lakh with a ₹5 lakh deductible. Claims in the year: ₹3 lakh, ₹4 lakh, ₹6 lakh. Who pays what?
- Base pays ₹3 lakh, then ₹2 lakh of the second claim; it is now exhausted.
- Top-up (deductible per claim): claim 2 is below ₹5 lakh, so it pays nothing; claim 3 pays ₹1 lakh. Customer bears ₹7 lakh.
- Super top-up (deductible on the year's total): the total passed ₹5 lakh during claim 2, so it pays ₹2 lakh of claim 2 and all ₹6 lakh of claim 3. Customer bears nothing.
- That is why super top-ups are usually better value.
Earned premium ₹500 crore, claims paid ₹320 crore, outstanding claim reserves up from ₹100 crore to ₹140 crore, expenses ₹160 crore. Find the loss, expense and combined ratios.
- Claims incurred = paid + change in reserves = 320 + 40 = ₹360 crore.
- Loss ratio = 360 ÷ 500 = 72%.
- Expense ratio = 160 ÷ 500 = 32%.
- Combined ratio = 104%: an underwriting loss of ₹20 crore, covered only if investment income exceeds it.
A ₹50 crore fire risk has a 40% quota share. The insurer's retained share is protected by excess of loss of ₹20 crore xs ₹5 crore. A ₹30 crore loss occurs. Who pays?
- Quota share reinsurer: 40% × 30 = ₹12 crore.
- Insurer's retained share: ₹18 crore.
- Excess of loss pays above ₹5 crore: 18 − 5 = ₹13 crore (within the ₹20 crore limit).
- Insurer's net cost: ₹5 crore.
A customer had 35% NCB, renewed 120 days late, then had a claim-free year, then a claim. What NCB applies at each renewal?
- Renewed 120 days late: more than 90 days, so NCB drops to 0%.
- After the next claim-free year: 20%.
- After the year with a claim: 0% again (unless they bought NCB protection).
A car has an ex-showroom price of ₹12 lakh, is 40 months old and the repair estimate is ₹6 lakh. Is it a total loss?
- 40 months is 3–4 years: 40% depreciation, IDV = ₹7,20,000.
- 75% of IDV = ₹5,40,000.
- The ₹6 lakh estimate is higher, so it is a constructive total loss.
- Insurer pays the IDV less the compulsory deductible and takes the salvage (or pays less if the customer keeps the wreck).
A ₹36,500 annual policy starts on 1 January 2026. How much is earned by 31 March 2026, and what is the unearned premium reserve?
- Days of cover given: 31 + 28 + 31 = 90 of 365.
- Earned = 36,500 × 90 ÷ 365 = ₹9,000.
- Unearned premium reserve = ₹27,500.
Draw the quote-to-policy process for an online motor policy.
- Quote → client creation (KYC) → risk details → proposal → payment → underwriting rules → issue → dispatch.
- Show the STP / NSTP split and what happens on referral.
- Name the system at each step.
Draw a cashless health claim and show where system timers are needed.
- Lanes: patient, hospital, insurer or TPA.
- Timers: pre-auth decision within 1 hour, discharge authorisation within 3 hours.
- Add enhancement requests and escalation when a timer is about to breach.
Map the motor own damage claim and point out where leakage or delay happens.
- Lanes: customer, insurer, surveyor, garage.
- Delay: waiting for survey, parts approval, document gaps.
- Leakage: inflated estimates, missed depreciation, unrecovered salvage or subrogation.
Sketch the data model for a motor policy system.
- Customer 1–N policy; intermediary 1–N policy.
- Policy 1–N insured risk; insured risk 1–N cover.
- Policy 1–N endorsement, payment; insured risk 1–N claim.
- Effective dates on policy, cover and endorsement.
Draw the policy lifecycle as a state diagram.
- Quote → proposal → underwriting → in force (or declined).
- While in force: endorsements and claims.
- End states: renewed, cancelled, expired or lapsed; each with its own refund and document rules.
Draw a system context diagram for launching a new motor product through aggregators.
- Centre: policy administration system.
- Around it: aggregator and Bima Sugam APIs, rating engine, payment gateway, VAHAN and CKYC, billing and commission, claims, data warehouse.
- Label each connection with the data exchanged and mark the new or changed ones.
Write SQL to list motor policies expiring in the next 30 days that have no renewal quote yet.
- Filter active motor policies by end date between today and today + 30.
- Exclude policies that already have a renewal quote, using NOT EXISTS.
- Return what the renewal team needs: policy, customer, end date, NCB.
Example querySELECT p.policy_no, p.customer_id, p.end_date, p.ncb_pct FROM policy p WHERE p.lob = 'MOTOR' AND p.status = 'IN_FORCE' AND p.end_date BETWEEN CURRENT_DATE AND CURRENT_DATE + 30 AND NOT EXISTS ( SELECT 1 FROM quote q WHERE q.prev_policy_no = p.policy_no AND q.type = 'RENEWAL' );Write SQL for the loss ratio by product for a financial year.
- Join earned premium and claims incurred by product for the same period.
- Claims incurred = paid + closing reserve − opening reserve.
- Aggregate separately first, then join, to avoid double counting.
Example queryWITH ep AS ( SELECT product, SUM(earned_premium) AS ep FROM premium_earned WHERE fy = '2025-26' GROUP BY product ), ci AS ( SELECT product, SUM(paid + closing_reserve - opening_reserve) AS ci FROM claims_fy WHERE fy = '2025-26' GROUP BY product ) SELECT ep.product, ROUND(100.0 * COALESCE(ci.ci, 0) / ep.ep, 1) AS loss_ratio_pct FROM ep LEFT JOIN ci ON ci.product = ep.product;What data quality checks would you run when migrating policies to a new system?
- Counts and premium totals reconcile by product, status and branch.
- Mandatory fields present; dates consistent (start before end, endorsement inside term).
- Reference data valid (product codes, RTO codes, intermediary codes).
- Sample policies re-rated in the new system match the old premium.
- Open claims and outstanding reserves carried over exactly.
How would you report on the 1-hour and 3-hour cashless time limits?
- Capture timestamps for request received, each query raised and answered, and decision sent.
- Measure the time the insurer controls, pausing the clock while waiting for the hospital.
- Report % within limit by TPA, hospital and day, plus breaches with their extra cost.
- Alert before breach, not after.