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-   -   No claims during the Covid-19 days, can insurance companies share the benefit with customers? (https://www.team-bhp.com/forum/indian-car-loans-insurance/221836-no-claims-during-covid-19-days-can-insurance-companies-share-benefit-customers.html)

I am assuming Accidents, thefts and insurance claims will be next to Zero during the lock-down period. Automobile insurance companies should be benefited big time during this period with no payouts on the active policies. Can we expect some benefits to be passed to the customers through a discount on the next policy (probably as a stickiness bonus) or in some form.

Even for Health insurance, scenario can be similar with people keeping away from hospitals unless for a real emergency

I agree that new business will be also Zero during this period, but just a thought

I think insurance companies will have to think about survival first, with new sales precipitating and health insurance claims certainly rising exponentially, I don't think insurance companies will be able to share any benefits (if they get some, that is).

Warren Buffett’s Geico offers $2.5 billion in credits as coronavirus cuts driving
https://www.cnbc.com/2020/04/08/warr...s-driving.html

I wonder if Indian insurance companies will think on similar lines. Relieved that my proposal was not fully idiotic and out of mind :)

It's not idiotic. My team mates in Canada have already started receiving rebates for their car insurance policy.

But in India, I don't really expect us to get our money back to be honest. Happy to be proved wrong though.

My car's insurance expired today. I renewed it couple of days back (my policy is with Acko). I got a Rs.1800 extra discount over and above the NCB as "Lockdown discount". This was for a policy on which renewal premium was about Rs.12,000 for comprehensive coverage.

Agreed that a cash back may never happen in our country. It can be discount during renewal if you stick to the same provider. That can be a win-win situation, but not sure if that is allowed legally

Would customers pay more during a crisis month where the claims went up? I don't think so :). It would be nice to have, but I don't expect Indian insurance companies to offer any sort of benefit.

I would have thought there should be no change. To my mind, insurance premiums work as follows: Regardless of the time the car spends on the road, your next year insurance premium / NCB depends on whether or not you make a claim in the previous year. I guess if you don't make a claim you will get your NCB. And even if your car was on the road only for 3 months of the year, and in that period if you made a claim you would lose NCB. Isn't that the only way to look at it?

Insurance premium I understand is paid for transferring our risk to the insurer. In other words, it is calculated based on the risk an insurer is taking on your behalf. Certain risk components has reduced globally during the current period and this can result in a reduced risk and hence premium. This can be passed to customer if the company wishes to use that as an incentive to attract business (not enforced by a regulatory authority)

Agreed to GTO that we didn't pay more during a crisis situation like flood. But are not these elements factored in to the policy premium. Moreover, such events are generally limited to a region and will be neutralized to a large extent against the larger community.

In the Netherlands : We have a few insurance companies who have started giving rebates on their car insurances to their customers. Less traffic/Driving less accidents and they show it in their premiums right away!

Wasn't there was a 2 month extension offered for policies expiring during the lockdown, if I am not mistaken?

Insurance is tricky business. When the companies like Tata AIG can refuse to renew insurance after a claim, I don't think they will pass on any sort of benefit to the consumers.

A part of that is also to do with the amount involved. In the UK for example, a 19 year old can pay amounts like 5000 pounds a year for a used hatchback. Assuming even a 10 percent rebate on that premium is 500 pounds, which is a lot of money. In India on the other hand, a basic car like that would probably cost 10 to 20 thousand rupees. A 10 percent discount on that is negligible.

That was my point, and it can be done here as well

Did you read it somewhere? I don't remember hearing anything similar.


Size of the amount shouldn't matter, and it may not be small in all cases

It does. When you charge 10K for insurance, 1K is a lot to refund for the company, but miniscule for the owner to receive. On the other hand when you charge 5L then 50K is big for the owner but not so bad for the company. It basically comes down to high volume low margin vs low volume high margin