India’s mortality protection gap is 83 per cent and 72 per cent of the households underestimate the need for protection. Digitalization will allow insurers to rethink their approach in pricing, distribution, and managing the value chain, said Hadi Riachi,CEO, Swiss Re India .
Pune:
The insurance regulator IRDAI has proposed to the government to provide parametric catastrophic cover on a pilot basis in certain part of the country which is affected by natural disasters.
In insurance parlance, the term `parametric insurance’ describes a type of insurance contract that insures a policyholder against the occurrence of a specific event by paying a set amount based on the magnitude of the event, as opposed to the magnitude of the losses in a traditional indemnity policy.
“We have proposed to the government that it should launch a parametric catastrophic cover scheme on a pilot basis to facilitate a higher penetration of catastrophic covers in the country,’’ said TL Alamelu, member (Non-Life), IRDAI in her keynote address at a seminar organised by National Insurance Academy (NIA) in collaboration Swiss Re on “ Mitigating Emerging Risks through Innovative Risk Solutions” on Thursday.
She said to some extent, natural calamities can be addressed by the recently launched Bharat Griha Raksha, Bharat Sookshma Udyam Suraksha and Bharat Laghu Udyam Suraksha standardized policies.
Hadi Riachi,CEO, Swiss Re India in his address focused on the 3 D’s: Divergence, Digitalization & Decarbonization.
India’s mortality protection gap is 83 per cent and 72 per cent of the households underestimate the need for protection. Digitalization will allow insurers to rethink their approach in pricing, distribution, and managing the value chain, he said.
Talking about Climate change, he said it remained the top risk for all of the insurance industry
According to Riachi,the year 2021 was the fourth costliest year since 1970, with more climate events happening. The temperature may increase by 3.2 degrees by the mid of century, which could result into reduction in India’s GDP by 35%.
“As climate change is a systemic risk, insurers and reinsurers can be a part of a solution for this problem,’’ he said.
G. Srinivasan, Director, National Insurance Academy, in said that today the world is going through a lot of changes, and is facing serious challenges from Climate Risk, Pandemic Risk & Cyber Risk.
He said that more than 80 percent of the Indian population lives in Hydrometeorological disaster-prone areas. Himalayan glaciers are melting, and the sea level will rise by ½ meters by the end of the century.
“Western parts of the country are also encountering cyclones regularly, which was not the case earlier. We have a huge protection Gap of 90% and this is the area where Insurance Industry has to design innovative products and procedures to reduce the gap.
He said that the increased usage of technology has also enhanced the cyber risk and today both institutions and individuals are more prone to cyber-attacks. The cyberattacks can result in multiple claims in the same event.