Online insurance marketplace Policybazaar has launched a new job-loss insurance vertical through which customers will be able to directly buy covers to protect against financial uncertainties associated with job loss.
In an interaction with Moneycontrol, Sarbvir Singh, CEO, Policybazaar.com said job/income loss covers are the need of the hour and the platform will offer a slew of novel products in this space.
“In India, there is no safety net beyond a point. We wanted to help the middle class. Hence, we worked with the insurers and modified the plans to offer job loss covers,” said Singh. This will be the first-of-its-kind offering in the Indian market.
Policybazaar has partnered with SBI General, Shriram General, Universal Sompo, Future Generali India Insurance and Bajaj Allianz General Insurance for offering products. Currently, income-loss insurance plans are offered as an add-on, meaning that you need to have a base insurance policy to purchase this benefit.
Singh said with the new vertical, a customer will be able to compare and purchase job loss insurance products directly without being made to buy a base cover. In the first phase, Policybazaar will offer products that will provide up to three-months EMI as a benefit in case of job loss.
“The cover will be affordable. For example, if you have a Rs 20,000 monthly EMI, you need to pay less than Rs 2,000 for a job-loss cover that will offer three-months-EMI benefit. Going forward, we could extend the benefit depending on customer demand,” he added.
Singh said this mode of distribution is more cost-effective for insurance companies as well. He explained that the traditional distribution model of an agency channel wouldn’t find it viable considering the low premiums.
“We have 6-7 million people buying insurance from us every year. Hence, sales via this channel make economic sense for insurers,” he added.
Policybazaar is currently seeing a 30-35 percent growth in business. For the platform, the growth rate moderated in Q2 from 45-50 percent in Q1. Exact numbers for Q2 are yet to be released. Singh said the demand for insurance soared in the first quarter as Indians became aware of the need to buy insurance amidst the coronavirus outbreak.
As the job-loss vertical picks up, Singh said Policybazaar will be ready to experiment with newer concepts like fixed compensation for job loss. These benefits are available in the Western markets as part of the unemployment insurance where temporary financial assistance is provided to individuals who have lost their job.
In the near future, the platform is also looking to build solutions that make insurance purchase a win-win for customers and insurance companies.
"We could have health products with small deductibles of say Rs 10,000. This will ensure that customers don't make frivolous claims while insurers can offer products at a reduced premium," he added.
Deductibles in health insurance refer to a fixed sum that has to be paid by a customer in case of an insurance claim. For examples, if there is a Rs 1 lakh deductible, then it means that the policyholder will have to pay the initial Rs 1 lakh of a claim while the rest is borne by the insurer.