Weekly Insurance Round-up Tuesday, July 12, 2022

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We're back with the latest edition of Beshak’s Weekly News Round-up, an analysis of all Insurance News & Updates from our in-house research team. 

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✴️ IRDAI to investigate Covid-19 Claims 🔍

✴️ Year-on-year new business premium of life insurers rises by 39.73% 📈

✴️ Edelweiss General launches ‘SWITCH’ - mobile telematics-based comprehensive motor plan 🛡️

✴️ IRDAI sets 5 years target for greater penetration of insurance 🎯

✴️ IRDAI permits general insurers to issue sophisticated add-ons for motor insurance 🚗

• IRDAI has agreed to look into the covid-related claims that the insurance companies had earlier rejected.
• This decision was taken after a Public Interest Litigation was filed by Manav Seva Dham, a social service trust, against various insurers before the Bombay High Court.
• The petition stated that several insurers- 
  • Were engaged in several offenses, misused the policyholder’s funds, rerouted them through additional business, and paid hefty commissions to banks and their agents.
  • Have caused wrongful losses to the policyholders.
  • Rejected the claims without giving any solid valid reason.
• The trust has asked the court to pass an order to make sure that the insurance companies do not reject covid-related claims based on any unjustifiable reason.

Source: LiveMint

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• As per the Business Figures - Life report released by IRDAI, the collective new business income for life insurance companies saw a 39.73% year-on-year increase.
• The premium income increased to ₹73.674.53 Cr for the first quarter of this financial year, from ₹52,725.26 Cr. for the same period in the last financial year.
• The new business premium for the first quarter of this financial year of all the private life insurers grew by 48.75%. The premium income grew to ₹25,473.53 Cr. from ₹17,124.58 Cr.
• LIC saw a growth of 35.39%, where the premium income increased to ₹48,201 Cr. from ₹35,600.68 Cr.
• However, the premium income of LIC for June 2022 declined by 5.29%. The premium income decreased to ₹20643.67 Cr. from ₹21796.28 Cr.
• Private insurers saw an increase of 29.19% in their new business premium income for June 2022, where the premium income increased to ₹10,610.89 Cr. from ₹8,213.20 Cr.
• The cumulative new business premium of life insurers for June 2022 increased by 4.15%, to ₹31,254.55/- Cr. from ₹30.009.48/- Cr.

Source: Financial Express

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• Under the IRDAI’s Sandbox initiative, Edelweiss General Insurance launched a mobile telematics-based comprehensive motor insurance policy.
• When the app detects motion while the car is being driven, the insurance instantly gets activated, making it convenient and hassle-free for the consumers.
• SWITCH is a usage-based model that assesses both quantity and quality, and the premium is determined accordingly.
• Customers may purchase SWITCH online and download the SWITCH app afterward to view their insurance policy.
• Features of SWITCH include - 
  • Everything is digital, from purchase to claim settlement.
  • After the initial payment is made to activate the policy, customers can pay the remaining premiums in monthly installments.
  • The policy covers accidental damages only while in motion and when switched on.
  • The vehicle will have 24/7/365 protection against fire and theft.
• Add-ons available with this policy include - 
  • Depreciation protect 
  • Engine protect
  • NCB protect
  • Roadside assistance
  • Invoice Value Protect
  • Key and Locks Protect
  • Consumable Expenses Protect
  • Mandatory Deduction Protect
  • Personal Belongings Protect
  • Tyre Protect
  • EMI Protect
• The policy comes in two modes - 
  • Max Mode: 
    • This is a comprehensive cover and comes with in-built add-ons like, personal accident cover, Mandatory Deduction Protect, Depreciation Protect, Road Side Assistance, and Consumable Expenses Protect.
    • One can also customize the plan and opt for more add-ons according to their choice.
  • Cruise Mode:
    • This is a comprehensive cover, too, but this mode does not provide an option to buy any extra add-ons with the policy.
    • It only covers loss or damage to the insured vehicle, third-party damage, personal accident cover, and passenger cover.
• Switch goes by the motto ‘Drive less, pay less; Drive better, pay less’.
• Customers will be given a driving score based on various parameters like overspeeding, distracted driving, and sudden brake, among others.

Source: LiveMint

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• IRDAI has set a 5 years growth target for general and life insurance companies to ensure that their products reach maximum people.
• A committee of state-level bankers and insurance companies (SLBIC) is also proposed for a regular review.
• As per the report, the targets set by IRDAI are - 
  • To double the insurance penetration to 6% from 3% by the year 2027.
  • General insurers must increase their premium target to 11 Lakh Cr. from 2 Lakh Cr.
  • The share of GDP achieved should be 2.5% instead of 1%.
• Additionally, according to the regulator, every state will now have a lead insurance company.

Source: Zee Business

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• IRDAI has allowed general insurance companies to offer innovative add-ons for own-damage of vehicles depending on the driving history of the owners and the usage of the vehicle.
• As per IRDAI, general insurers can introduce own-damage cover for motor insurance in three categories - 
  • Pay as you drive: 
    • This will allow the customers to pay the premium based on their usage.
    • The more one uses their vehicle higher the premium they pay.
  • Pay how you drive:
    • This will depend on the driving behavior of the owner.
    • Vehicles with more accidents and fines will have to pay a higher premium.
  • Floater policy: 
    • With this policy, customers can buy just one single policy for covering multiple vehicles including two-wheelers.
• According to IRDAI, the introduction of the above options will give a much-needed push to motor own damage insurance and help in enhancing its penetration.

Source: The Economic Times

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