Over 50 percent of vehicles on-road have no insurance cover

Motor vehicle insurance is a mandatory requirement for vehicles plying on the Indian roads, and yet, almost half of them are uninsured, as per the latest data published by regulatory authority IRDAI. While stiff penalties can certainly improve compliance, industry experts believe that rationalising insurance services can help contribute as well. “In some sense, risk has to get customised and if it is handled in a way a consumer understands, the adoption will shoot up,” Rakesh Jain, Executive Director and CEO, Reliance General Insurance, told Autocar India in the inaugural episode of Brobot Dialogues – a series of discussions on the auto industry.  

• Floater policies can combine insurance for multiple vehicles
• Physical signature of customer no longer required for policy issuance 
• Artificial intelligence to help with analysing data

Customise policies for combining different risks

Rakesh Jain, Executive Director and CEO, Reliance General Insurance: Insurance companies survive on risk awareness, but then, almost half the vehicles running on the roads do not have an insurance.

Jain mentioned that as an insurer, the company has to “marry multiple types of risks”. “For instance, in motor insurance, we also build a risk for paying the customer’s EMIs in case their car is stranded at a garage for more than 30 days,” he added.

Companies can further simplify the insurance process by reducing the customer’s burden of handling multiple policies. “We also realise that there are many people who have multiple cars, or sometimes a car and a two-wheeler. Such people have often been chased to buy a separate policy for every vehicle. So we thought to experiment with a floater product – a single product which floats across multiple types of vehicles.” The idea of floater policies for motor insurance was first approved by the IRDAI early last year.

Digitalisation to improve ease of managing insurance

The company head commented that digitalisation has helped the insurance industry come a long way since the days when it was “besieged with a lot of paperwork and procedures”. These days, policies can be renewed online in just a few clicks, however, there is still scope of taking more things digital. “Even the regulator dispensing away with the wet signatures only happened because of COVID,” he said.

“I think the main value creation will happen in the actual product, which includes claims and customer engagement. There is a huge amount of effort we're all putting towards creating speech bots, including video assistance to the customer,” said Jain. He added that customer’s distress management at the time of processing a claim is also crucial. “So there is clearly a need to engage with the customer perhaps on a real time basis.”

Jain mentioned that further improvements can happen by analysing data using artificial intelligence and machine learning. “For claims where we have sufficient data – say 10,000 instances of a particular type of claim – we can, on the spot, go for immediate and real-time claim settlement. These kinds of mechanisms will grow with the size of the industry and digitalization,” he said.