Increase Flood, Earthquake & Tsunami : Must Need Home insurance

With the growing number of houses in the middle income &  high end segments, the house insurance segment is gradually gaining awareness Pan India.

Mr Mukesh Kumar, Head - Strategy, HDFC ERGO said, “The home insurance sector is at a nascent stage, as compared with other insurance sectors in India. Housing finance companies are playing an important role in evolving the home insurance companies in our country"

Mr. B. Subrahmanyam , Senior Vice-President & Head - Health, Commercial Lines & Reinsurance, Bharti AXA General Insurance said, “Natural calamities like floods, Earth quake have resulted in a growing need to protect houses. Also, increasing incidents of house burglary, better awareness, and higher disposable income are contributing to the growth of the home insurance segment”

 Mr T. A. Ramalingam, Chief Technical Officer, Bajaj Allianz General Insurance, ''The house insurance contributes to only about 1% of the total business written by general insurance companies today, which shows the huge untapped potential of this segment. Housing loans have led to growth in home insurance purely at the banks' insistence, and most customers leave the insurance decision to them. On a standalone basis, home insurance has few takers"

But what is heartening to know is that these companies are seeing a growth in this segment. For Bharti AXA, the segment has shown 100% growth in 2011, while for ICICI Lombard & Bajaj Allianz GI, growth is at 25%  & 20% respectively.

Much of this growth comes from metro cities.
Mr Neelesh Garg, Executive Director, ICICI Lombard GIC said, “Now, home insurance is doing well in metros & Class-A cities. The segment is gradually growing in the Class-B &  C cities. The increase in the rate of occurrence of natural calamities, such as flood, earthquake and tsunami, has resulted in a growing need to protect homes. So, home insurance is picking up in areas prone to natural calamities and among the HNIs (high net worth individuals) segment where there is potential for greater loss"

The finance companies making home insurance mandatory for home loans has contributed to a 25% growth in home insurance in the last financial year (2011-12)  when home insurance premium touched Rs. 150 crore.
There are no intermediaries not focusing specifically on this home insurance segment, as premiums and insurance agent commissions are very low.

Home insurance policy also called House Holders' policy or House owners policy
The policy covers house and assets from fire and related dangers, burglary and theft, breakdown of domestic appliances, electronic equipments and baggage. In this policy, separately issued rider polices for Flood, (per lakh rupee additional premium Rs. 5)Earthquake, per lakh rupee additional premium Rs. 5)Terrorism (per lakh rupee additional premium Rs. 30). For one lakh rupee coverage for  house and major assets and Flood, Earthquake, Terrorism , total premium is about Rs.75 to Rs. 100 only.  
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