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Largest general insurer New India Assurance today said it has come up with a combination product for lower income groups that will have life, medical and accident covers among others.
"We are launching a product for the lower income population, like domestic helps, with an annual premium of Rs 800. This plan will offer life cover of Rs 1 lakh to the family in case of death, critical illness and other hospitalisation costs under Rs 20,000-30,000. The plan also offers accident cover," New India Assurance Company chairman and managing director G Srinivasan told an industry summit organised by the IMC here.
This combination policy which has been launched on pilot basis today, will be rolled out in the retail market soon, he added.
India is the 10th largest life insurance market globally and 19th in the general insurance space.
Addressing the summit, Irda chairman T S Vijayan supported the idea and said combination products are the key and are the way to go forward.
"Combination products are the key. This is the way to go forward. However, as regulator we also have to look at it as to whether these products are is lessening the problems or not," Vijayan said.
Srinivasan further said insurance in the country was a major challenge, especially the non-life sector.
"Since last three years, the non-life sector has grown by 20% and is growing by 15% so far this year. About 25% people are covered under non-life, of which only 14-15% are covered under health, mostly because government is paying for it and the 60-70% are under motor cover," he said.
Insurance awareness is also a big challenge as the financial literacy is very low in the country, Srinivasan said, adding "we need a multi-pronged strategy to create awareness."
Talking about claim settlement, he said, there is a lack of trust in the sector among people to negative publicity through word of mouth, which the insurance player have to address.
Srinivasan is also of the view that products should be designed very simply. "The products should be very simple and standard," he added.
