8/3/2019 Business Standard 13-10

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ARIJIT BARMAN

& NILADRI BHATTACHARYA 

Mumbai, 12 October

The ghosts of 2008 are crawlingback on the job street, with thetelecom and the investmentbanking sectors already seeing

cuts across the board. However, manyinsurance companies have sensed an op-portunity in this uncertainty and areplanning customised and stand alone 'jobloss covers'. Such products are popularin developed economies, but now on a

standalone basis, the product is set tomake its debut in Indian, and the num-ber of enquiries for such products hasseen a spurt over the last few months.

Such products that would allow ex-tra financial cushion, without touchingone's long-term savings, would help pro-fessionals like Ankur Vohra, who was,till recently, a wealth manager in a lead-ing Swiss Bank in Mumbai. Ankur,along with many of his colleagues, was

asked to quit, as the organisation de-cided to re-orient its focus, three yearsafter the team had been put in place.

Currently, job-loss covers in the mar-ket are mostly sold as add-on covers withcritical illness policies, bundled withhome loans or individual loans. Undersuch covers, insurers would pay threeequated monthly installments on any in-dividual loan in case of a job-loss.

Now, however, involuntary job loss-

es due to the slowdown would also be cov-ered under a comprehensive policy, inwhich payouts would be linked to gross

monthly salaries. Even if a company de-clares insolvency, its employees can in-dividually seek help under a redundan-cy cover, at least for a few months.

In such a scenario, an insurer can getup to 45-60 per cent of the gross month-ly salary, or up to 75 per cent of the netmonthly salary, for a period of six months.

Like Ankur, Biswajeet Das has a sim-

ilar story to share. A Delhi-based tele-com-professional, he too, had to quit his

 job after his organisation decided to

merge its mobile, satellite television,fixed line and broadband businesses in-to a single entity. With a mortgage, a carloan and a new-born to look after, the sit-uation came as a major setback for

Biswajeet. “You may get a severancepackage for three-six months, but it's theuncertainty that kills you,” he quips.

“Over the last six months, queriesregarding comprehensive job lossescovers have increased,” says T A Ra-malingam, head (underwriting), BajajAllianz General Insurance.

The company is not only planning anindependent cover, but is also explor-ing ways to widen the scope of its exist-

ing cover, currently being offered as anad-on with home loan products of itschannel partners.

“Depending on the customer re-quirements and the product feasibility,we may consider offering this cover as

part of a package policy for other cus-tomer segments that have financial re-lationships with financial institutions.It can cover a certain percentage of thegross monthly salary of the insured per-son, in case of a covered contingency”Ramalingam adds.

Sanjay Datta, head, customer serv-ice (health and motor), ICICI LombardGIC, says, “The ticket size has in-creased over the last few months. The

queries have also gone up...We are nowselling such products, bundled withothers. But we are closely watchingthe market. If the situation demands,we may offer a stand-alone job-losscover as well.”

Standalone job-loss covers are notuncommon in the West. Such policies—short-term income protection, unem-ployment cover, full-income protec-tion, mortgage payment protection in-

surance and payment protection in-surance—are based on different needsof the customers.

According to an underwriting headof a private general insurance compa-ny, the rise in demand for such policiesis predominantly coming from mid-sizedcompanies. Even though he does notfavour introducing such a stand-aloneproduct right now, he does not want tomiss out on any new business potential.

(Some names have been changed to protect identities)

EVEN IF A COMPANY DECLARESinsolvency, its employees canindividually seek help under aredundancy cover, at leastfor a few months

INSURERS KEEN ON JOB-LOSS COVERSInvoluntary job losses due to the slowdown would be covered under a comprehensive policy