Insurance cos to curate policies with flexibility in wordings

economictimes.indiatimes.com:

Insurance companies are working to provide customers with greater choice and flexibility to tailor coverage, particularly benefiting mega-risk policies initially and later extending to retail products like motor own damage cover, following a recent notification from the regulator that allows them to change policy terms, conditions, clauses and wordings.

The changes could be evident from July or October renewals, as it will take some time for insurance companies to implement these and come up with new and innovative policies, said industry experts.

Insurance companies were previously not equipped to free up the policy wordings. By the second fiscal quarter, they will see curated policies coming into the marketplace. So far, insurers have followed a fixed format for their policies and couldn't make many changes, even though pricing had been freed up in 2006.

Now, with this new freedom, the Indian insurance market is catching up with global standards, allowing more flexibility in pricing and policy design, industry experts said.

The change will be first visible in mega policies including those with a sum assured of more than ₹1,000 crore.

«With the de-notification of tariffs, it opens up a lot of scope for innovation, even on the policy wordings front. Pricing will now be dependent on product coverages, innovative features and services offered,» said Tapan Singhel, managing director of Bajaj Allianz General Insurance. «Till now the variation had only been on the price. With this new move, the discussion moves to