The Insurance Regulatory and Development Authority of India (Irdai) between September and October last year, invited applications for the regulatory Sandbox. A Sandbox is a workspace where tech-driven companies can ideate, experiment, test and innovate financial products. The regulator received 173 proposals of which it has approved 33. Of all the ideas, the proposal to introduce own damage motor floater policies stands out.

Three insurance companies— ICICI Lombard General Insurance Co. Ltd, Reliance General Insurance and Edelweiss General Insurance —plan to test this product soon. Shanai Ghosh, CEO and executive director, Edelweiss General Insurance Co Ltd. said their sandbox product is an innovative app-based floater policy that would allow policyholders to cover any damage to their vehicles based on usage. The policy would cover multiple vehicles in one, which saves time and any hassle involved in buying multiple policies for multiple vehicles.“Premiums will be charged as per usage. This simply means that the customer has the flexibility of adding and deleting vehicles as required on the app. The insurance cover can be switched on or off as per the requirement of the customer," added Ghosh.

A Reliance General Insurance spokespersonsaid that their sum insured based ‘floater policy’ would cover all the vehicles owned by a customer under one policy. It will be defined basis value of the highest sum insured vehicle and the customer will have the option to add vehicles even at a later stage.

By choosing this policy, one shall entail benefits like premium leverage as multiple policies are not required to be bought and sum insured is optimized. Other benefits include change of details for all policies at one go and continuous coverage. “All the benefits including no-claim bonus, cancellation and so on shall be made available to a customer like any typical motor insurance own damage product both at the time of entry and exit," said the Reliance General spokesperson.

Ghosh said the emerging era of shared mobility makes this a very relevant product for vehicle owners today because they can pay as per the usage of the vehicle and driving behavior. “As per the sandbox guidelines, the product can be launched only as a proof-of-concept pilot and the period for launch and completion is from 1 February, 2020 to 31 July, 2020 in line with the Irdai operational guidelines," said Ghosh.

While the outline of the product has been presented by the insurers, details about how exactly the premiums would be calculated and the benefits are yet to be finalized. Sanjay Datta, chief–underwriting, claims, reinsurance and actuarial, ICICI Lombard General Insurance said the insurer is looking at launching the pilot product over the next two months but didn’t reveal further information on premiums because the company is still working on that front. Datta, however, said that they may have to take a different approach at calculating premiums for this product because a single policy could cover a high-value Merc as well as a hatchback like Alto.

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