Niche medical insurance for cattle, women-specific life insurance are being tested as part of the insurance sandbox method by companies
Cows are a means of livelihood for millions in India and often treated as a part of the family. So it is only natural to expect they get the best medical treatment just like other members of the family. So why not the right medical cover too?
Not to worry. Cow owners may soon have an insurance product catering to their specific needs. As part of a new pilot testing project initiated by the insurance regulator, insurance for cattle to protect against lifestyle diseases is one such cover under consideration.
Insurance companies are being allowed to test products in a closed group to check the necessity and popularity of the products. Rather than launching them in the market directly, the idea is to let insurers test them with a select population to reduce product failure.
The idea is to allow insurers to ideate freely and create products that go against conventional norms as far as products as concerned.
Take the cattle product for instance. At present, cattle insurance covers accidental death of the animal due to road accident, fire, earthquake or snake bite among others. However, with the change in feeding habits of the cattle, lifestyle diseases like diabetes are not uncommon. This is excluded from insurance coverage as of now.
Cattle being the livelihood for many rural families in India, hospitalisation and medical treatment is a significant expense. Rural families use cows for dairy products as well for agricultural production.
“Because we have a niche audience, we are able to test the product better,” said the chief product officer of a mid-sized general insurer. This insurer which has a larger presence in smaller towns/villages is testing the product in specific regions.
Here the sum insured will be mutually decided by the insurer depending on the cattle breed and medical conditions. A veterinarian will help the insurer identify the medical risks and price the product appropriately.
Pet insurance also covers animals like dogs, cats and birds among others. However, this also provides protection only against accidental death.
Insurance against flight cancellation
Another interesting product that is being tested is no-restriction flight ticket cancellation insurance. At present, trip cancellation covers have exclusions like political unrest or visa delay that make the products less attractive.
A few private sector general insurers are experimenting with new forms of travel insurance that will pay even if your flight ticket has been cancelled due to visa rejection or delay in getting a visa. Similarly, hand baggage damage, as well as fragile product damage, could be made part of these covers.
“After one to two months, we will finalise the pricing and send the product for approval to the regulator,” said the head of underwriting of a large private insurer.
Device-based insurance is also being experimented. For instance, three insurers are conducting tests with closed groups on offering an insurance cover for one-time replacement of devices like smartphones, tablets and laptops for screen damage.
Life insurance products
Industry sources said a larger set of innovation is being done among non-life insurers than life insurers.
When it comes to life insurance, experiments are being done in the area of profession-led insurance or gender insurance. For instance, a life insurer is testing a life insurance plan which will have tweaks in coverage based on the life-stage of the woman be it, young adult, working professional, marriage, childbirth as well as retirement.
Similarly, for risky jobs like transporters a higher life insurance cover with added benefits of illnesses like HIV/AIDS, heart disease is being looked at.
At present, about 780 life insurance and over 1,000 general insurance products are being sold in the market for individuals and groups.
This method is expected to help companies have a better success rate with their products. According to industry estimates, for every 10 new products that are filed, two fail to make the mark at present.
The insurance regulator will allow testing of relevant products and services for six months before they are commercially launched in the market. Insurers can use digital platforms like smartphones, Internet of Things (IoT), telematics, and artificial intelligence to launch relevant products.It is likely that the regulator will start giving approvals for these products to be launched from April 2020 onwards. The need for the product and pricing mechanism will be looked at, prior to the approval.