MUMBAI: Tata AIG General Insurance is planning to launch AIG’s lifestyle products in India, as it is witnessing a sea change in the manner in which consumers look at insurance covers these days. Some of the lifestyle products include the ‘wallet card policy’ and other niche covers such as a ‘golfer’s card’.
“We have mapped expected change in consumer behaviour for the next five years and drawn our plans accordingly,” said Tata AIG General managing director and CEO Gaurav Garg.
According to Mr Garg, considering the Indian market’s success is moving from a tariff regime to a deregulated regime, it is expected to achieve the status of a mature market much faster compared with other emerging markets. Although motor insurance and health are expected to account for close to 70% of the insurance industry portfolio this year, Tata AIG is following a different strategy to move ahead.
“Both motor and bank-financed properties require a market share. We also expect the entry of specialised monoline insurance companies in the motor and health insurance sector,” said Mr Garg. Given this, he expects retail and SME businesses to drive the growth factor in the market.
Tata AIG’s strategy, when it comes to mass retail markets, is to target products that are pre-underwritten. This, they think, will enable the distributor to offer a quote and at times, even issue a policy on the spot. The wallet card, for instance, is a policy which covers the insured against the loss of his wallet — not just the financial loss but even the consequential loss such as misuse of credit/debit card or any other important identity card. “The policy even covers assaults and robberies following ATM cash withdrawals,” said Mr Garg.
The golf card is another lifestyle product which is targeting a small segment. If the insured golf player scores a ‘hole in one’ — a feat rarely achieved in this sport — the policy provides for a payout, in addition to covering the liability to other players. Although, ‘a hole in one’ is considered as a major victory, the player ends up spending a lot of money on celebrations and gratuitous payments, which also includes the cost of treating his partners. The policy covers all these costs.
‘Exotic covers’ is not a completely novel concept. Before liberalisation, state-owned insurers had around 150 niche insurance products. But most of these did not reach to people since companies lacked appropriate marketing skills or did not know how to adjust the claims made by people. Mr Garg expects the buyer behaviour to change, when it realises the kind of potential the private sector has.
Currently, Tata AIG is a market leader in terms of travel insurance, liability insurance, covering personal accidents and loses reported in marine cargo. All these businesses are profitable except for marine cargo, which just manages to break-even. According to figures released by the insurance regulator, the company has recorded Rs 813.4 crore net profit, up from Rs 741.6 crore, thus posting a growth of nearly 10%.
Source: Economic Times/ 9 May, 2008
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