Insurance companies in India are turning innovative. Be it insurance related to weather, political risks, clinical trials, errors and omissions, directors and officers insurance, commercial general liability? the last four years have seen a lot of innovation in store for insurance customers, both in the life and non-life segments through the introduction of speciality products, particularly on the liability segment.
With the increasing stress on corporate governnance by regulators such as Sebi and Irda, initiation of legal reforms, increasing awareness of shareholder rights and globalisation coupled with the competition arising out of the entry of foreign players, insurance companies have started introducing a number of speciality products that are ruling the roost in today?s insurance market place.
Not surprisingly then, the liability insurance premium in the country during the past four years have seen dramatic growth. As against Rs 360 crore in 2004-05, the liability insurance premium ended the 2007-08 fiscal with a growth of Rs 583 crore and is expected to close the current fiscal with around Rs 700 crore.
Industry insiders feel that risk is now firmly on India Inc?s corporate governance agenda. This, along with the integration of the Indian economy with global trends and practices resulting from increasing awareness overseas exposure, expansion and acquistion activities, has fueled the rise of these speciality products.
Industry insiders say today corporates are looking to insurers to shield them from the financial consequences of political turmoil around the world. With the IT boom in India and with companies crossing borders to conduct business, a host of new exposures due to foreign laws and regulations have arisen.
Moreover, following the US SEC?s initiative to introduce strict rules to watch the accounting scandals, the Sarbanes-Oxley Act of 2002 and the Clause 49 of Sebi regulations for listed companies, the director & officers insurance cover has attracted more attention in particular over the last few years, they said.
?Even as India?s insurance market is growing from strength to strength, let us expect a lot of new products and innovations along the way. A right combination of product innovation, enchanting customer service, quick claims settlement and investments in customer education will open up new frontiers for the insurance industry,? an insurance analyst said. This support by enabling regualations would be the perfect catalyst for sustaining such growth momentum over the next few critical years, he added.