Indian insurance industry to witness huge increase in new products

New Delhi: The Indian insurance space is about to witness an exponential increase in "unique and unheard" products covering a cross-section of people, livestock and situations, as companies test niche policies.

However, these products might be sometime away from actual introduction into the market space, since the insurance regulator is yet to give its ascent, industry insiders told.

"Ever since IRDAI allowed pilot testing of policies, companies have been implementing these on a select group of people to see whether or not these will work in real life situations," a person related to a private insurance firm told.

"Many outcomes cannot be left to probability."

Other market observers pointed out that testing of unique products also began to make policies eligible to become part of government-backed programmes for livestock welfare like those meant for cattle.

"We are currently testing few products that include lifestyle related diseases that affect Cattle like stress," a senior executive with a state-run insurance major told.

"We have recently entered into a MoU with various state government's Livestock welfare boards. These will become our main clients if and when we are able to get these policies out in the market. Already a variant is running in Uttar Pradesh and another has been finalised in Himachal Pradesh," a senior executive of public sector general insurer told.

Besides livestock, other products related to health risks to specific job categories like drivers, front office staff and air crew and non-health cover for damage via freak accidents or reimbursement of missed flights due to traffic jams are being tested.

In August, IRDAI, the "Regulatory Sandbox Approach" can be used to carve out a safe and conducive environment to experiment with innovative approaches, and where the consequences of failure, if any, can be contained.

"In light of the same, the Insurance regulatory and Development Authority of India has created a Regulatory Sandbox whose objective is to use innovative ideas to foster growth and increase the pace of most innovative companies, in a way that provides flexibility in dealing with regulatory requirements and at the same time focussing on policyholder protection."

The authority had invited applications for the 'Regulatory Sandbox' within a window from September 15 till October 14, 2019.

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