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Insurance Article

3 types of Insurances you didn’t think you’d need

June 15 2020
3 types of insurances 
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Every once in a while you’ll come across an article or piece of publication that will jolt you into action. Or so a writer wishes. If only wishes were like….well you know it! But what if the end result is not just desired but also needed? Like knowing and discovering types of insurance products you didn’t think you’d need. It’s also a fast track method of discovering innovations in the insurance industry. But before we take a look at the products themselves, let us first glance at the reasons old ways of the industry are being disrupted. By way of product innovation, insurers are now trying to come up with solutions and set up data pipelines that take care of the following:

  • Engage consumers
  • Like all good relationships, the one between an insurer and the consumer can no longer just be a transactional one. The onus on insurers to engage with customers has never been greater. Whether it be timely reminders for renewals, updating them on product benefits and coverages, telling them about other products that they may need or just ensuring that they have access to important information regarding health specialists and hospitals – the byword is communicate!

  • Simplify processes
  • Traditional insurance players are notorious for their lengthy and complicated processes reminiscent of ‘babudom’. That’s no longer the case. Customers want simplified, digitized processes, right from the point of purchase to claim, at their fingertips.

  • Expand coverage
  • It’s not enough to offer products that just cover traditional risks. Consumers are now looking for need-based solutions that are relevant to their lifestyles.

    Also read: How digital disruption is reshaping the insurance sector

The consultancy firm Deloitte, in its report, Four Defining Insurance Industry Trends 2020, states “The insurance industry stands at the precipice of profound change. And this disruption is not just digital. Demanding customers, new competitors and a changing set of challenges are transforming the insurance industry.”

There are several types of insurance products that you may miss out on if you’re not an industry watcher or specifically looking for it.

Cyber Insurance

The product has been around for a while but the insurance industry is now taking a more customer first approach. Initially the focus of the coverage in a cyber-policy used to be on recovering financial losses and backing legal routes. It has now broadened to encapsulate occurrences such as cyber bullying and threats too. Recognizing that incidences such as cyber bullying and cyber extortion have mental ramifications on the victim the scope of cover, in some cyber products, now also includes consultations with psychologists and cost of relocation in case of serious threats.

Why it’s needed – We are increasingly becoming more reliant on digital. Right from our financial transactions to social interactions; our personal information is resting on devices, servers and databases. This leaves us vulnerable to hackers, extortionists and others with criminal intent. Having a policy that covers all these incidents, goes a long way in ensuring that someone’s got your back in cyber space.

Telematics Insurance

Blanket premiums may be a thing of the past. A smart insurance solution now being offered to car owners is telematics based insurance. A more personalized form of insurance, the premium for a telematics based policy depends on how many kilometers you drive, how you drive and various other parameters as specified by the insurer. Here’s how it works – a telematics device is attached to your vehicle, (think of it as a black box but for your car) which records certain statistics like what speed you drive at, how you take corners, etc. The insurer then reviews the data received and states the premium accordingly.

Why it’s needed – No two people drive the same so it helps to have a product that determines price based on consumer behaviour. Aside from personalized premium, the consumer also receives regular updates regarding the health of the car. In case the vehicle is stolen, it can be tracked using the telematics device. For those drivers that abide by the law of the land and rule of the road this type of insurance spells *ka-ching*!

Income Insurance

When we mention insurance what’s the first thing you think of- health? Life? Most people only associate insurance with health or life policies. But we live in uncertain times and so we must be ready with firm measures to counter that uncertainty. Protecting your income with an insurance policy is sort of a safety net – should the ground be swept beneath your feet, there’s something to break the fall. Most income targeted insurance products will cover eventualities such as termination due to external economic factors, disability due to an accident etc.

Why it’s needed – Think of it as upping your financial planning to A-game status. If you’ve got responsibilities and bills to pay, insuring your income helps in alleviating some of the stress that economic turbulence brings.

COVID-19 Insurance

The pandemic has been challenging for one and all. For the insurance industry, it came as a challenge to its agility; for insurers to swiftly come up with a product that would answer their customer’s requirements. On the home front, we went full-steam ahead to ensure that our customers knew that hospitalisation expenses due to covid-19/pandemic was included in our health policy.. We set up certain measures to ensure that our customers would also have access to information such as covid-19 testing facilities and hospitals. We also set up processes to expedite COVID-19 claims. In record time, we came up with a group COVID-19 cover.

Why it’s needed – And by this we mean a health policy that offers wide coverage and prioritises customer engagement (remember our point about ‘engaging customers’ at the beginning)

Summing up…

As a recent publication pointed out, “the insurance industry has a critical role in helping the world navigate a range of powerful forces and megatrends from globalization and demographic shifts to climate change and cybercrime.”

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