General Insurance Industry in India is going through an evolution. The Business in India took baby steps during the era of British India, when it went through phases of Nationalisation and then opening of market for Private sector in Y2K.
The period of Nationalisation was of controlled offerings with Tariff Covers where Underwriting was primarily Tariff Interpretation and Client had little to choose from except Insurance Companies. Even after opening up the market for Private Sector the policies remained Tariffed and only leeway provided was deregulation of Rates in Property, Engineering and Motor departments. Being tailor made covers, Health Group Mediclaim policies were allowed to be individually rated. However, Retail Health policies are as per filed wordings and no change is allowed.
Insurance Industry took up with Regulator to allow product innovation so that client’s can get options. However regulator in order to avoid miss-selling agreed for same basic covers for all Insurance Companies but approved add-on covers as filed by various insurance companies.
These add-on covers provide options to Insured to choose from and make own bouquet rather than have a package with various non-required elements. This initiative is well received by discerning clients.
Add-ons in Motor Insurance
Motor Insurance have been available for the last couple of years and clients are now increasingly taking these as per their requirements. For example –
Nil Depreciation Cover – This cover if taken ensures that no depreciation is deducted at the time of claim settlement. If a client does not take this cover then deduction even more than 50% can happen from claim depending on years of use of the car. It makes a major impact to a client and hence this add on cover is very popular especially in high-end vehicles.
Other add –ons like Consumables cover, Return to Invoice cover, Tyre cover etc. are also sought after by clients.
Add – on covers in Fire Insurance are recently launched and not many Insurance Companies have spread the message of availability in the market.
We at Reliance General Insurance have launched various Fire Add-on covers like 72 Hour clause, Acquired Companies Clause, Additional Insured's cover, Contamination and or co-mingling of Stock cover, Deliberate Damage cover, Demolition and Increased cost of construction, Expediting Expenses cover, Immediate Repairs cover, Multiple Insured Clause, Property not on Insured's Premises cover, Restoration of record, plan, documents, Shut down startup expenses cover, Technological advancement cover etc.
The clients have well received these add-on covers, especially 72 Hour Clause for AOG perils, Technological advancement cover for equipment.
More interaction, presentations and Seminars need to be organized for Clients/ Brokers to showcase RGICL innovations in Add-on covers and taking these nearer to clients and intermediaries. The future of general insurance Industry is product Innovation as per client needs; Launching of Add-on products is a step towards the right direction.