General insurance companies are gearing up to launch a handful of new services this year. On the cards are extended warranty covers with additional benefits, emergency road-side assistance in motor insurance, and return-to-invoice products.
Take, for instance, extended warranty cover plans, which typically allows one to extend the warranty of consumer durable products by 12 months. According to industry sources, the new policies would have options to extend the warranty by up to 24 months.
K G Krishnamoorthy Rao, managing director and CEO of Future Generali India Insurance, had recently told Business Standard that the company would be launching policies in this segment.
According to sources, general insurers are currently in talks with the manufacturers of consumer products to decide the premium structure for this plan. Once it is launched, the warranty of consumer goods, including electronic devices such as smartphones and cameras, would be extended by two years, subject to some pre-conditions.
"With the steep increase in smartphone sales, the number of faulty devices are also on the rise. This cover will ensure the consumer does not have to suffer from manufacturing defects or other conditions that seep in once the phone is one or two years old," says a senior official with a private general insurance company, who did not wish to be named.
Return-to-invoice cover is expected to gain prominence in the market, given the increasing number of new vehicles on the road. A standard insurance policy pays for the damages to a car after taking into account the depreciation in value. If the car is four-to-seven years old, the insurer will only pay a part of the vehicle's original value, because of depreciation. Return-to-invoice plans cover the gap between the insured value of the car and its invoice value (value of a new car). If there is total damage to the car, the policy will pay the entire amount that was paid originally by the policyholder.
Sanjay Datta, head of underwriting and claims at ICICI Lombard General Insurance, says this cover will attain importance this year. To avail this plan, however, a policyholder should pay 30-40 per cent more premiums depending on the car model, usage and value. High-end luxury cars and sports utility vehicles (SUVs) will attract much higher premium.
In the motor insurance segment, add-on products and riders are also expected to be launched this year. Road-side assistance covers will be part of every motor policy, upon payment of an additional charge. Insurers are also planning to use technology to assess the loss and physical damage. Here, a policyholder will click a picture of the damaged vehicle at the accident site and send it to the dealer/insurer, who, with the help of a software, will estimate the loss figure.
Insurers are also looking to tie up with petrol pumps and vehicle-servicing centres to assist policyholders with emergency fuel supply and repairs at deserted locations. While this, too, will be provided at an additional cost, insurers say the cost will be nominal.
Companies such as Bajaj Allianz General Insurance has already said that they would go beyond just servicing claims in 2014.
Tapan Singhel, managing director and CEO of Bajaj Allianz General Insurance, had recently said: "We have always wanted to bring a differentiated story to the market. And these initiatives are part of this. We want to go beyond just providing insurance claims. As of now, we have begun with health and motor; but we do plan to bring the home product also into it."
Under motor insurance, Bajaj Allianz provides 24x7 roadside assistance to all its women policyholders, by way of pick-up and delivery services, if the car is immobilised.
It covers instances such as flat tyre, dead battery, fuel assistance, spare keys, towing facility, etc. The insurer's health policyholders can display their health card and avail discounts at pharmacy, dental or optical outlets and diagnostic centres.
While only some insurers offer health cards along with health insurance policies, 2014 will see more insurers entering the fray. According to the senior official with a large general insurer, the sector is working towards a goal where all players will offer health cards with loaded discounts at medical institutions and gym / spa membership incentives.
Telematics is also expected to be a big area of research and development in 2014. This involves fitting a device in one's car, which will monitor the policy holder's driving behaviour and make changes in the premiums in the long-run. While Liberty Videocon General Insurance has already launched a pilot study in this field, the sector is looking into the cost aspect of the device before it can be fully implemented.