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Bad ICICI Lombard Experience


I want to mention on this blog about a bad ICICI Lombard health insurance experience. Our company has a group policy that covers health of all individuals, and we have always had a maternity cover also.

Before my child was born I had our HR executive called up the executive that sold us this insurance and confirmed that maternity was covered, and he said it was. Still not convinced I read through the policy which had it in the “endorsements” section. Assuming that yes, this endorsement is in our policy, we went ahead with the room selection etc. for the hospital.

When my son was born I submitted the form for a “cashless” claim, and the Third Party Adminstrator (TPA) rejected the claim, saying maternity was not covered. I then called up the ICICI Lombard executive who still maintained that it was. Angry with the TPA, I called and gave them a piece of my mind. To their credit they listened to me patiently and told me that the policy did not have the maternity endorsement.

I then paid up at the hospital and a few days later when I reached the office, checked the copy of the policy document. Guess what. The front page is a printed cover that mentions our office name, address and number of employees covered. There’s a section for “endorsements” which was empty. Then there was a pre-printed set of terms and conditions which specifically rules out maternity unless endorsement E2 is applicable. Endorsement E2 – the maternity endorsement – is also printed later.

Well, it turns out that “Endorsement E2 is applicable” must be printed on the front page, otherwise the endorsement is not valid. This is weird. If I have a policy document in which the endorsement is present, it is not enough. The fact that the endorsement is VALID should be printed somewhere else? How is anyone supposed to know this? Even in my LIC policy only those endorsements are listed which apply to me! Why can’t ICICI Lombard give us a group policy document that contains only those endorsements that apply to us, especially when we pay a ton more of premium?

Of course, their stand is all legal. And it is my stupidity that I did not get a court approval before I went to the hospital. But I think this was a way to trick us, because the document is worded in a way that makes me believe that the endorsement is applicable, but when you try to claim it is not. Further the maternity benefit was there in earlier years, and during renewal they removed it and we were dumb for trusting them. Still, that is a standard trick and now I am smarter, and I hope you are too.

What is inexcusable was ICICI Lombard’s procedure to handle the claim. I didn’t hear one apology from anyone; everyone we called insisted that the maternity claim was valid and that they would call us back but they never did. And the TPA was actually more helpful than ICICI’s executives. Even to the end, there was just a blame game going on at ICICI and then I gave up.

ICICI Lombard executives came to my office yesterday to renew our building insurance. I have cancelled every single insurance we hold with them and am getting quotes from others. It is unlikely that I will ever use their services again.

And today, doing a search for other such experiences, I have found a number of other people that have had problems. Not with ICICI lombard per se but with ICICI banks divisions in general – ICICI bank is a promoter of ICICI Lombard.

This page starts off with ICICI bank’s bad services, and other people come in and pour their views.

Arjun Prabhu then posts a blog entry and gets 594 comments, spewing vitriol over practically every aspect of ICICI Bank’s services, including credit cards, loans, insurance, and NRI offerings. Some berate the lack of service, others complain about executive apathy. When an ICICI bank executive presumably came in to stem the damage, and responded to one customer, that customer immediately replied and provided evidence to which there was no further response.

More posts follow: Whoisdeep, Arjarapu, Ankur Raheja, Neha Vishwanathan and Deepak K

Mouthshut’s ICICI bank review page seems to have a huge number of bad experiences, out of 474 reviews.

Most woes are not about bad experiences per se, but about ICICI Bank’s lack of empathy with their customers. Some of their PR executives have tried to enter the fray and solve issues by providing email ids in the comments.

But why am I posting this in my Investor blog? Because this kind of massive customer reaction is usually an indicator for the ICICI Bank stock as well. Any publicity is good publicity but the kind of venom spewed by customers is definitely not a good sign. I personally think they have some fantastic people at the top: I have immense respect for KV Kamath and his team. But perhaps, in the furious pace of growth, they have had issues with training their middle management, and eventually, their customer facing executives. In the long run, this kind of attitude is very difficult to reverse – and in my experience, it will only be addressed after the shit hits the fan.

From an investor perspective, this is a touch-me-not. Very few customers have staunchly supported the bank in any of these posts. Almost all reviews are negative. A retail business can’t survive for too long like this, can it? If you own ICICI bank shares, you might want to seriously evaluate its future.

And in the same vein, I encourage you to look at all your stocks, and talk to the customers of these companies. It might help you understand whether you own a gold mine or a minefield.

Note: You may see some ads regarding ICICI in this page. I haven’t blocked them from advertising here, and I hope they will respond to some of these issues too.


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