General insurers hopeful of a revival in motor policy sales post lockdown

Surabhi Mumbai | Updated on May 22, 2020

Launch innovative products to cater to demands

Hoping for a pick-up in demand for motor insurance once the lockdown is lifted, general insurers are rolling out innovative products for customers who may worry about cash flows amid the economic slowdown.

Regulatory sandbox

Edelweiss General Insurance has launched an app-based Motor Own Damage floater policy under the regulatory sandbox of IRDAI, which allows vehicle owners to ‘switch’ their motor insurance on and off, based on usage, and covers multiple vehicles under a single policy.

“Our new product- Edelweiss SWITCH, is an on-demand multi-vehicle floater motor premium policy. The need of the hour is demand, if a customer is not using a product, they shouldn’t have to pay for it. We are addressing it,” said Shanai Ghosh, ED and CEO, Edelweiss General Insurance, pointing out that the product has become more relevant today as people are staying at home following the nation-wide lockdown.

Under the regulatory sandbox, nine general insurers had got approval for products under the ‘Pay as you use’ model.

Shriram General Insurance has tied up with Hyundai Motor India for the ‘Hyundai EMI Assurance’ programme under which the auto manufacturer will pay car loan EMIs for upto three months in case a customer working with a private company loses his or her job.

Neeraj Prakash, Managing Director and CEO, Shriram General Insurance, said the offering with Hyundai Motors is the first such product in the market. “The fear in the minds of customers when they go to buy cars is that they might lose their job. Since there is no data available in the market, we did some actuarial analysis with our foreign partner Sanlam for pricing. Customers can claim insurance if they lose their job for certain reasons,” he said, adding that the product will not come into play if the customer resigns from the job.

During the lockdown, it has also allowed customers, whose motor insurance has expired, to upload pictures of the vehicle without waiting for the surveyor. With some relaxation in lockdown and expectations of a new normal in the post-Covid-19 world, general insurers are upbeat that auto sales will revive and boost sales of motor insurance cover.

IRDAI data had revealed that in April, the gross direct premium income under-written for motor insurance fell by 49 per cent.

“There is close to 40 to 50 per cent underinsurance in the country of vehicles on road. We can recover some of the lost premium by ensuring these vehicles are insured,” Ghosh said, adding that once the lockdown is lifted, people may prefer to use their own vehicles and avoid public transport.

“The usage of cars and two-wheelers may increase in the near term. In China, there has been evidence of that in the two-wheelers and cycles category,” she said.

Published on May 21, 2020

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