Bharti AXA General Insurance, a joint venture between Bharti Enterprises, one of India's leading business groups, and AXA, one of the world's largest insurance companies, today said it has received approval from the Insurance Regulatory and Development Authority of India (IRDAI) for its two insurance proposals under the regulatory Sandbox project.
The company said its two proposed products - Usage-based Motor Insurance in the non-life category and Short term Health Insurance in the health segment - have been shortlisted by the regulator for its Sandbox project.
Notably, the IRDAI has selected only 33 out of 173 applications under health, non-life and distribution segments for the Sandbox project, which allows insurers and technology companies to collaboratively experiment with new products along with unique customer proposition on a live audience under the supervision of the regulator.
Mr. Sanjeev Srinivasan, Managing Director and CEO, Bharti AXA General Insurance, "As customers' needs are ever-evolving, there has always been a demand for flexible and 'Do It Yourself' coverages from partners and customers alike. We, at Bharti AXA General Insurance, are cognizant of this and always put their needs at the forefront of our innovations. Our proposed products for the Sandbox project cater to this requirement, and is a recent example of our commitment towards customer centricity. With the launch of Sandbox, we would like to congratulate the IRDAI for the commendable momentum demonstrated towards this initiative, which is a testimony of its commitment and understanding of consumers' requirements. It is a positive signal for the transformational phase for the domestic insurance industry and an exciting time for insurers, customers and partners," said Mr. Sanjeev Srinivasan, Managing Director and CEO, Bharti AXA General Insurance.
The proposed 'Usage-based Motor Insurance' product charges premium based on pre-declared or promised vehicle usage distance along with the standard parameters, thus benefiting those who drive less. Currently, the product available in the marketplace, does not allow any personalization to customers based on their driving pattern. A customer who is driving 20,000 kms a year versus the one who is driving only 5,000 kms a year is offered the same product.
"Usage-based Motor Insurance is based on the 'pay as you go' model, which is differentiated from the traditional motor insurance. It is an ideal product for the customers who have multiple vehicles and may not use each vehicle as much and, hence, may not have to pay a large premium amount. Through this innovative offering, we expect increased penetration of motor insurance by covering the customers who drive less and generally may not have a preference for own damage covers," said Mr. Srinivasan.
This is useful for people who commute using cabs or public transport on day-to-day basis and rarely use their personal vehicle. It would also benefit the customers who frequently travel beyond city limits and hence would seldom use their vehicles.
The proposed 'Short Term Health Insurance' product shall provide short-term health insurance covers for the customers, covering customizable waiting periods, and includes both indemnity and benefit. While traditional health insurance is generally offered for the longer duration starting from a year, this product offers coverage for sachet (shorter) periods to the customers allowing them the flexibility they have always desired.
He said the customers may choose to adopt health insurance for a short period during the emergence of diseases to safeguard themselves from the financial repercussions of these health hazards. A short and finite period of health insurance cover would cater to the specific needs of the customers, covering particular events or perils basis the need. Such covers will also make health insurance reach out to a wider audience.
The insurance sandbox project has been launched mainly to help the regulator gauge and measure real-life acceptance of new customer propositions before giving them the regulatory nod for commercial launch. It also has immense potential to facilitate innovation and securely experiment with ideas to solve unmet customer expectations and raise efficiency levels in processes or manage risk better.