Changes galore in insurance sector in '08Insurance buyers can expect more mature, custom-made products and better services this year.
Apnainsurance.com Research Bureau
21 Jan 2008
Insurance buyers can expect more mature, custom-made products and better services this year. For instance, a key reform on the anvil is altering the wording of policies, permitted from April '08. This reform, aided by free pricing and de-tariffing introduced at the beginning of '07, means the end of cross-subsidies. That is, earlier when the rates were the same, a policyholder with a good track record was actually subsidizing a policyholder with a bad one. With free pricing and policy-wording, the insurer will be able to charge more from a high-risk policyholder, resulting in greater policy customization.
According to industry sources, in the future, even the car manufacturer will influence insurance premium as repair costs are different for different manufacturers. Right now, motor insurance premium is calculated taking into account only
the engine capacity of the vehicle.
In addition, the geographical location of use, usage levels, and owner profile could decide premium amounts for a car.In this era of customization, in order to avoid confusion in definitions and terminology among various insurers, the General Insurance Council (GIC) has drafted standard wordings for fire, engineering, and motor insurance.