At a time when the government is pushing for cashless transactions and for use of digital payment platforms, the general insurance industry is exploring ways of developing products that will insure such transactions.
According to a top insurance industry executive, there have been preliminary talks on the process of insuring digital transactions and whether mobile wallets could be covered.
“There have been talks on protecting the loss when something happens on digital payments, whether there can be an insurance,” said R Chandrasekaran, secretary general of General Insurance Council, an industry association of insurance companies. You will find more and more insurance products to look at the financial loss, for instance, if a payment made via a mobile wallet doesn’t go through, it’s basically a financial loss,” he added.
A few days ago, mobile wallet company Freecharge launched a wallet protection plan for its users, in tie-up with Reliance General Insurance. Under this arrangement, the wallet balance of all the customers will be insured up to a limit of Rs 20,000, as long as the user is transacting at least once a month.
“Over the course of operations, we have realised that consumer perception of wallet safety is critical to drive both adoption and retention of our customers and hence we are offering this plan to our consumers free of cost,” said Govind Rajan, chief executive officer, Freecharge.
Rival Paytm is also insuring the last transaction conducted by a wallet user up to Rs 20,000, which is currently being underwritten internally.
“The original traditional lines of business like fire insurance, marine insurance, they continue to grow but their market share has gone down. The non-life insurance industry is moving from a traditional insurance to personal insurance to the next level of providing coverage for financial loss,” said Chandrasekaran.
For instance, the market share of fire insurance policies has gone down from 30% earlier to only 10% now as other products have grown.
For the year ending March 2017, premiums in the general insurance industry are expected to touch Rs 1.25 lakh crore, up 30% from Rs 96,000 crore last financial year. Between April-November, premiums had already touched Rs 81,000 crore.
The growth is also being driven by the government pushing schemes like the Prime Minister’s Fasal Bima Yojana (PMFBY), or crop protection scheme, which is expected to contribute around Rs 18,000 crore in premiums this financial year, and the Indian Railways insurance scheme for passengers.
The IRCTC launched optional insurance scheme from September this year, which allowed travelling passengers to get insurance cover up to Rs 10 lakh on booking train ticket online for 92 paise. Since earlier this month, this accident insurance cover is being given for free in the wake of the government’s drive to promote cashless transactions.