October , 2019
New age customers and their needs
16:16 pm

Aritra Mitra

A strong growth has been witnessed in India’s non-life insurance segment over the last few years. The market share of private companies has increased to 50.40% from 13.12% in the last 15 years. Rising internet penetration has improved aware-ness and accessibility, thereby accelerating de- mand for insurance products. Leading insurance companies are going for an Initial Public Offering (IPO), signifying a step towards improving disclosure standards and periodicity by making the companies answerable to investors and the society in general.

Public sector insurance giant, Life Insurance Corporation of India (LIC), is facing tough competition from private players that are using new-age digital marketing technologies. According to Insurance Regulatory and Develop-ment Authority of India (IRDAI), the market share of LIC in terms of first year premium up to May 31, 2019 slipped to 66.08% from 67.40% up to May 31, 2018.

Emerging trends

Health, motor and crop insurance have emerged among the top non-life insurance seg-ments. While these three have been witnessing steady growth, they have also gained momen-tum from regulatory changes and positive government initiatives. Samir Gupta, a financial analyst and consultant, told BE, “Majority of the modifications have come under various medical insurance schemes. Earlier, there was only one national mediclaim policy, now several other schemes have been introduced with enhanced benefits.” Gupta said that earlier there were cappings in case of health insurance. He added, “However, under the National Mediclaim Plus Policy, there is no such capping and one can enjoy unlimited benefits.”

Health insurance has also seen a rise in customer base due to government initiatives such as Ayushman Bharat. It provides cover of up to Rs 5 lakh to more than 100 million vulnerable Indian families. Similar opportunities have also emerged in the domain of crop insurance. The government provided cover to over 50 million farmers in 2017-18 under the Pradhan Mantri Fasal Bima Yojana.

Motor insurance saw regulatory changes as long-term third-party insurance was made compulsory for three years for new cars and for five years for new two-wheelers. This will significantly augment the insured vehicle number which is stagnating at around 50% at present.

While talking about event insurance, Gupta said, “Earlier there was only fire insurance but now during the Durga Puja and other festivals, there has been a rising trend for pandal insurance.” Mumbaiʼs richest Ganesh pandal put up by the Goud Saraswat Brahmin (GSB) Seva Mandal at the King's Circle neighbourhood took an insurance cover of Rs 266.65 crore this year. The comprehensive cover included the idol and the jewellery adorning it and the pandal itself.  The insurance also covered the volunteers and workers.

Technology-driven trends

Rakesh Goyal, Director, Probus Insurance, while talking about the emerging trends in the insurance sector, told BE, “Technology has made insurance paperless, convenient and quick. Insurers provide their apps to help customers on each step of their journey – buying, renewal, claims and support. An AI-based chatbot is often used to resolve queries, get claims settled and recommend plans as per individual needs. This is where insurance is shifting.”

He added, “Using image processing to settle motor claims and video chat to initiate the claims process for home insurance are the new trends. Insurance products are being more customised and contextualised.” Many insurance companies are coming up with bite-size and sachet-size insurance products which are related to daily commute and other daily activities. These insurance products are also often associated with on-demand insurance needs.

Film insurance – a new trend

The insurance sector is witnessing a spurt of diversification with film insurance gaining popularity. While it started in India with the movie Taal in 1999, it has come to the forefront again with Baahubali 2: The Conclusion in 2017. The movie was insured for Rs 200 crore. Future Generali, being one of the few players in the market that offers film insurance, bagged the ‘Baahubali’ deal. K.G. Krishnamoorthy Rao, the then MD and CEO of Future Generali India Insurance Company Limited said in an interview, “An unforeseen circumstance which causes damage to the sets or the postponement of the shooting schedule makes it eligible for the producer to claim insurance.”

According to Rao, while the usage of film insurance in Bollywood is 10-15% and in the regional film industries it stands at around 5%. Rao added, “The trend of financing films in a more transparent manner has taken off only in the past few years. Film insurance can be claimed only when the losses are substantiated and the financing has been done through legal payment modes. This is the reason why it wasn’t pretty popular earlier.” He also informed that if the shooting is for a longer period of time, the risk factor is high. Foreign locations for shooting also involve high risks.

How are the emerging trends beneficial?

According to Goyal, “Today’s insurance schemes are more focused on new-age customers and their needs, which may or may not cater to their long term financial needs and risks. For instance, you will find insurance products for your cab rides, bus travel, domestic flight travel, staying in a hotel, bicycling, and so on.” He said that at present, the customer wants more contextualised insurance products and so bite-size products are emerging. These products are pocket-friendly, instantly available and comprehensive.


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