‘Long-term policies, awareness to help penetration of motor insurance’

In the general insurance industry, we deal with large number of transactions, and that is one of the reasons we, as an industry, have been going digital at a faster pace.

The pandemic has hampered normal functioning as well as the use of vehicles.
The pandemic has hampered normal functioning as well as the use of vehicles.

Long-term motor policies announced by the insurance regulator in 2018, along with increased awareness and simplification of the buying process, will help penetration of motor insurance, Parthanil Ghosh, president, motor business at HDFC ERGO General Insurance, tells Chirag Madia in an interview. Excerpts:

Motor insurance is one of the important segments for non-life insurance industry, but this year it has seen negative growth. When will the growth come back?

The penetration of motor insurance is much higher than the other lines of business as it is mandatory to have at least a third party insurance while purchasing a new vehicle. However, new vehicle sales are in negative territory this fiscal due to the pandemic. Nevertheless, in the last three-four months, they are showing signs of recovery. But, at HDFC ERGO, we have been able to increase of market share in this financial year; even our motor insurance renewal rates have come back to pre-COVID times. I believe motor insurance is coming back to normalcy and it will enter the growth zone as soon as the situation stabilises further.

What more can be done for expansion of motor insurance?

As far as motor insurance is concerned, significant steps were taken by the insurance regulator by introducing long-term policies in 2018. We have a problem that around 47% of the vehicles plying on the road in 2018 were uninsured with a large proportion of the same being two-wheelers. With the introduction of the long-term motor policy, all the new two-wheelers since September 2018 are having five years of third-party insurance policy and this is three years for four-wheelers. I believe that long-term policies, along with increased awareness and simplification of the buying process, will help insuring a larger motor population in the next few years.

What innovative solutions will you be bringing in the motor insurance space?

In retail insurance, we must ensure how fast and quickly we can issue the policy. At present, 96% of our policies are issued digital, without any human interventions. Even after issuance, most of the retail policies do not need any interventions, unless it is a claim. Around 75% of all the motor claims are intimated digitally by policyholders. Secondly, if we look at renewals, around 40% of the private car insurance and 80% of private two-wheelers are renewed digitally. Even 75% of our claims are digital surveyed.

The pandemic has hampered normal functioning as well as the use of vehicles. We have identified challenges around the same and come forward to offer additional benefits to policyholders and boost adoption of motor insurance. We introduced a bunch of offerings which ensured customers’ smooth navigation through challenges they faced, especially during the lockdown. One such offering is: Fast Track Theft Settlement, which enhances quick and seamless theft claim settlement. Here the settlement is done within a record period of 9 days on an average, compared with 70 days earlier. Lastly, I would say that innovation is not something that we have started now, it is where we make our policyholder’s journey very smooth, accessible and easy.

HDFC ERGO had recently launched AI tool IDEAS for motor claim settlement. Can you elaborate how this tool can help policyholders?

In the general insurance industry, we deal with large number of transactions, and that is one of the reasons we, as an industry, have been going digital at a faster pace. At HDFC ERGO, we have adopted ‘digital first’ approach a few years back in our entire service architecture for both policy issuance as well as claims servicing. At one end, we have large number of transactions, and on the other, we need to settle claims efficiently. So, we have launched AI-powered IDEAS (Intelligent Damage detection Estimation and Assessment Solution) which will help policyholders.

IDEAS consistently provides right assessments irrespective of geographies and claims estimate in an extremely fast manner. This new tool uses neural network image processing and analytics, machine learning and natural language that supports instant damage detection as well as calculation of the claims estimate for surveyors. With this tool, surveyors will be able to check the accurateness of their assessment and there will be smaller number of conflicts with policyholders. At the same time, claims will be settled in a very expeditious manner.

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