Within the event insurance categories, insurers say that fire and weather riders have become most important for customers
Nikhil Dave, a 52 year old teaching professional recently took a wedding insurance with a private life insurer. More than the insurance, he ensured that he took a weather and fire rider on the insurance. Since, he had witnessed a situation where his nephew's wedding had to be postponed due to incessant rains, he did not want to take a chance.
Event insurance, which is a popular category among general insurance, has witnessed a trend wherein the fire and weather rider have gained prominence in the segment. Though it is offered as a rider on a product and is optional for the customer, companies say that almost all customers have started taking the fire and weather rider coupled with the insurance. According to industry estimates, there is atleast a 30 to 40 per cent growth in the number of individuals taking such covers with riders. Weather rider, itself, say general insurers, has seen a 25 per cent growth year-on-year.
Suresh Nair, Head-Speciality Lines, Bajaj Allianz General Insurance said, "Event insurance has been a popular segment in the industry. We have noticed that since there is a threat of cancellation of an event due to adverse weather, requests for riders like adverse weather condition which includes floods, cyclone and unseasonal rain are often received from event organisers."
With average premium at Rs 6 lakh for a Rs 3.5 crore sum assured event insurance, Nair expects the trend to continue. "We get about 15-20 requests in a month and I believe that the demand will only be on the rise," he said.
Sanjay Datta, Chief-Underwriting and Claims, ICICI Lombard shares a similar viewpoint. He explained that in terms of event insurance (that includes weddings), riders like fire have assumed great significance. Other focus areas according to him include burglary. "This is slowly growing as a segment. The bundling of this product (with riders) will help it generate brisk business and help it to gain attraction among the customers," said Datta.
In the Indian insurance industry, event insurance is offered, both by state-owned general insurance companies and private general insurers. However, events like weddings fall under a niche category wherein only a handful of insurers like ICICI Lombard, United India Assurance and Bajaj Allianz General Insurance provide a cover.
Industry experts said that riders like weather are very important for events, as the losses caused due to these incidents may be higher than expected. "Earlier, designer settings for events were unheard of. Now, with more sophistication being added-on to events, an unpredicted rainfall may wipe off lakhs of rupees spent on the decorations. Unless they are insured, the event organiser would end up paying all the money," said the head of an insurance broking firm.
He added that though claim incidents were comparatively lower, in the past few quarters, there have been claims based on weather riders being handled by companies. "This year, overall, there have been quite a few cases of weather playing havoc and some claims ranging from Rs 6 to 10 lakh have been paid," he said.
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