There’s a great market opportunity for new-age products, such as cyber insurance, especially in tier-II and tier-III cities, according to an online survey conducted by Policybazaar on the occasion of National Insurance Day 2022.
The aim of the survey was to closely analyse consumer awareness levels and uptake of emerging protection products in India. For the survey, Policybazaar spoke to 4,500 of its customers and app/website visitors regarding relatively lesser-known products, including cyber insurance, mental health insurance, home insurance, and pet insurance.
Findings revealed that around 23 per cent of respondents have a cyber insurance policy in place. Another trend observed was that nearly 48 per cent of respondents in tier-II and tier-III cities had bought or showed willingness to buy insurance, as opposed to 36 per cent in tier-I cities.
The results clearly draw a parallel between growing Internet consumption in smaller cities of India and starkly similar awareness levels to safeguard that consumption.
Cyber Insurance: A Sizable Opportunity To Seize
Though still in its nascent stage, cyber insurance seems to be the next big opportunity for the insurance industry, according to the findings of the survey.
At 31 per cent and 29 per cent, respectively, the highest number of respondents from tier-II and tier-III cities indicated their willingness to buy cyber insurance, as opposed to 16 per cent from tier-I cities.
That said, out of those who had actually purchased a policy, 20 per cent belonged to tier-I cities, while 17 per cent belonged to tier-II and tier-III cities. According to the survey, the findings represented a growing level of awareness towards effectively combatting intangible threats to crucial digital assets across India.
Aside from the potential opportunity in smaller cities, another interesting trend that emerged was the inclination towards buying family cyber protection plans.
About 45 per cent customers purchased family plans, whereas 35 per cent purchased individual plans, while 20 per cent were covered under corporate plans. Among non-purchasers, 53 per cent showed an interest in buying family plans, which was the highest among all. This implied an apparent preference for overall comprehensive protection, not just for individual cybersecurity, but also for the entire family.
About 20 per cent of respondents claimed they had suffered a financial loss due to cybercrime. However, only 24 per cent out of this 20 per cent ever bought a policy, while 39 per cent neither purchased one nor even considered buying one, the survey revealed. Financial loss due to unauthorised transactions emerged to be the threat most respondents (57 per cent) wanted to cover through cyber insurance.
Mental Health: A Growing Scope Of Awareness And Coverage
Even though mental health conversation is shifting away from the stigma and taboo that it used to face earlier, the survey reveals that it still has a long way to go.
The survey revealed that 60 per cent of the respondents were covered under health insurance, which by default covered mental health, while only 26 per cent out of those insured were actually aware of this coverage.
According to the findings, only 27 per cent of the total surveyed were aware of mental health being covered under a comprehensive health insurance policy.
“With similar findings across all tiers, this points towards a passive coverage for mental health, rather than a proactive approach. The awareness seemed lowest at 15 per cent for the 31-40 age group. However, one notable finding here is that 80 per cent of those who were aware of the mental health inclusion, came to know about it after the Covid-19 pandemic,” the survey said.
Home Insurance: Varying Needs For Protection Across Geographies
The survey found a lower level of awareness and purchase propensity when it came to home insurance. Only 10 per cent of the respondents were aware that home insurance could also be purchased by tenants, and not just home owners.
Out of those surveyed, 74 per cent did not have a home insurance policy, and merely 25 per cent had considered buying one. Those who purchased or considered buying a policy showed varying preference for coverage. Respondents in tier-II and tier-III cities wished to protect their homes against burglary/theft the most (39 per cent and 44 per cent, respectively), while 34 per cent in tier-I cities saw damages caused by fires as the top threat they wanted to cover.
Protection against natural calamities was the second most important aspect for respondents, pan-India.
Pet Insurance: Stark Contrast Between Consideration And Purchase
The fourth segment in Policybazaar’s Insurance Awareness Day survey was pet insurance, where a stark disparity was evident between purchase consideration and actual purchase.
Even as 70 per cent of the pet owners considered buying a policy, only 10 per cent actually bought one. While pet insurance penetration was significantly low overall, among buyers, tier-II respondents ranked the highest at 10 per cent. The number stood at just 3 per cent for both tier-1 and tier-III towns. Analysing the potential hazards, cover for surgery cost was seen as the most preferred aspect by 40 per cent of respondents followed by OPD cost and death of the pet.