The non-life, non-health segments of the industry are going to see a flurry of product launches that will provide cover against everything ranging from cyber risk to cyclone India's non-life insurance sector, though growing at 15-20 per cent annually mainly due to health insurance, has to become innovative and dynamic to spread rapidly in non-health segment and may even have to think of insuring pets as in industrialized nations. .
Pet insurance: Keeping a pet at home is a normal practice now a days, however, when for pet insurance, not many options are available. In most developed insurance markets, specially the US, pet insurance is very popular.
Motor insurance forms a huge portion of the overall retail portfolio for general insurance companies, and clearly, most of the innovations would be seen in this segment.
Motor insurance: Some of the interesting product innovations that might be seen in the next two to five years include new motor insurance policies where premium will be charged based actual usage of vehicle. In countries like the UK, Norway, Sweden and other Scandinavian countries 'pay as you go motor insurance' are quite popular. This basically requires monitoring the actual extent of usage of vehicle and charging premium according to that. For this, insurers need to install global positioning system on the insured vehicle to monitor its usage and then charge higher premium for higher usage and lower premium for vehicle that are sparingly used.
Charging premium according to characteristic of driver is another innovative step by general insurers. In this model, premium may vary depending on age, profession and work timings. In this, higher premium may be charged to specific age groups for whom the perceived risk is higher, like in case of youngsters below the age of 25, while discounted premium rates for more safe drivers who are less prone to accident.
In countries like the US, the UK and Germany where leasing of vehicles is quite popular, residual value motor insurance is also in demand. In this insurance policy, the future sale price of the insured vehicle is fixed, and if the vehicle fails to fetch that value, insurer pays the deficit. Leasing of vehicle is predominantly practiced in higher segment vehicles and insurance company generally has tie-up with the manufacturer.
Another innovation that might take sometime to come to India is where insurance premium depends on the driver, rather than on vehicle itself. In the US for instance, motor insurance premiums depend on the driver's track record and risk profile.
Catastrophe insurance: In the wake of recent cyclones in the US and in Tamil Nadu, fire and allied perils insurance becomes all the more important. Although the true extent of loss in such situation is beyond the coverage of any policy, insurance cover may help in starting over.
Cyber liability: As the e-commerce gains momentum up in India, insurance for frauds or online malware might also pick up. In most developed countries, insurance plans are provided against cyber risks to cover websites and e-commerce companies.
Director's and officer's liability: This insurance plan protects chief of organizations against any fraudulent practice or legal liability arising out of routine duties. Insurers might extend basic protection to cover legal expenses for the UK and the US Bribery Act. This cover would protect Indian directors or other important officials in case they are charged of any attempt of bribery to government.
Home and property insurance: Although cover is available from insurance companies for fire, earthquake and flood, it provides bare minimum protection at present. In developed markets like Japan and the US, it is mandatory for home owners to have insurance if they are mortgaging the property or living in a high risk area. In India, we might soon see plans with wider coverage to protect expensive electronic items as well as jewellery. In these developed countries, insuring expensive artifacts is also popular.