General insurance firms offer value-added products

After waiting for over three months, eight companies -- National Insurance, United India, ICICI Lombard, Tata AIG, Royal Sundaram, HDFC Ergo, Bharti AXA General Insurance and Iffco Tokio General Insurance -- have finally received the go-ahead from the Insurance Regulatory and Development Authority (Irda) to launch these products.

From January this year, while asking insurers to ensure that the basic elements of motor, fire and engineering policies were covered, Irda had granted them flexibility in selling policies with add-on features. But the regulator has taken three months to understand the products and approve them.

Irda blamed the delay on the insurers, saying they did not follow the correct pricing method. "We had sought clarifications on the pricing and informed them about the charging mechanism that they are supposed to follow," said a senior Irda official.

While add-ons have been filed and approved, some of the insurers have said that they need some time to launch them.

They say that, unlike commercial products which can be launched straight away, products meant for retail consumers need a certain level of preparation before they are ready for sale.

"We have to train our agents to spread awareness about the additional covers and their benefits. We look forward to launching them in the coming week," said Tata AIG General Insurance Managing Director and CEO Gaurav Garg.

Tata AIG had applied for approval of 12 add-ons in the motor segment, but only eight of them were approved. In addition, it had applied for approval of 111 products on the commercial side of which 95 have been approved.

Similarly, Iffco Tokio had filed over 20 products for approval, of which one has been approved and already launched. Called 'on-road protector,' the product is an additional cover to its existing motor insurance policy.

Oriental Insurance has a similar service called 'emergency roadside assistance' for which the insurer had tied up with MyTVS, but as a value-added service.

The products that have been approved in the motor segment are depreciation reimbursement, return to invoice, daily allowance, no claim bonus protection, key replacement, repair of glass, fibre and emergency transport and hotel expenses. However, most insurers are yet to disclose the premiums. Iffco Tokio charges Rs 900 for its 'on-road protector' policy.

On the commercial side, add-ons like leak search -- a product that covers the cost for locating and accessing a point of leakage -- has been approved.

"We had filed add-on covers in the standard fire and special perils policy and approval is expected shortly. The add-on covers are framed as the existing terms and conditions were inadequate compared with the changing preferences of our customers and their demands," Bajaj Allianz General Insurance's head for underwriting, T A Ramalingam, said.

Insurers such as Bharti AXA General Insurance and ICICI Lombard are not planning to launch the products in the near future.