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NEW DELHI, Nov. 18, (Agency)- Uncertainty is constant and is increasing at a rapid rate. While the losses due to various hazards are increasing across the country and causing massive financial impact, the popularity of insurance products (which reduces the financial impact of these hazards) have not significantly grown over the years. Furthermore, the buyers of insurance products generally do not fully appreciate the utility of these products and most of them have bought the products due to some obligations such as requirement of law or lenders. For example, the millennium city of Gurgaon sits on an interaction of seven different fault lines, increasing the possibility of large damage in case of a high intensity earthquake. Thus, it is not the ideal place for high rise buildings. However, the penetration of home insurance to protect individual customers from financial losses in case of an earthquake is extremely low. This contradiction between increasing risks and low penetration of insurance products among the buyers has multiple reasons including poor suitability analysis, low awareness and human behavior.

Every human being is different with his/her unique needs for insurance products. Accordingly, insurance products should also be sold as per the needs and risk profile of the customer. While the products do offer various options, there is no tool / formal mechanism to calculate the risk appetite of the consumer which is the starting point for any suitability analysis. Further limited knowledge of the buyers regarding the risks and insurance products, add complications to the buying process. Hence, the most suitable products for the buyer are not always sold, resulting in dissatisfied consumers.
Vikas Anand, Founder and CEO of Safetree, an emerging Insuretech, says that in order to fulfill this gap, his Company has developed a simple tool called Risk Janampatri. This tool calculates the risk profile of the customer in a few minutes and thereby helps the customer to identify the most suitable insurance product/ option. The consumers can now purchase insurance products based on their risk profile, resulting in a happy and satisfied customer.

He illustrated the advantage of risk assessment through a simple motor insurance product. A person having a low risk appetite (with limited ability to absorb losses/uncertainty) should ideally buy motor insurance with higher Insured Declared Value (IDV) along with add on options like zero depreciation, etc. This will ensure that he/she does not incurs any material amount/damage in case of any accidental claim or total loss. Similarly, an individual with a higher risk appetite can save money on insurance premium with lower IDV and nil or minimal add on options. Risk Janampatri helps customers to identify products in accordance with their risk appetite. Hence, a person with lower risk threshold will not complain that he paid slightly more for the risk cover and a person with higher appetite will be happy with his savings on insurance premium. Additionally, “he continued that no insurance is worth if it’s not optimal”. At the moment, customers find it difficult to identify appropriate sum insured for their insurance needs especially for health insurance. To combat this problem, Safetree has developed an easy tool which calculates sum insured for a health insurance in few seconds. This tool helps customers to know their ideal sum insured based on their risk profile, location, family size and other parameters. According to him, these tools can be used by the customer independently without any agent or adviser. He stated that the Company will be coming up with more easy and simple tools which will guide customers to identify the most suitable insurance products across all product segments.