Page 28 - Life Insurance Today January-June 2020

and beneficial for public surveillance, crowd monitoring and challenges faced by the India non-life market. "Key factors
even for delivery of essentials like medicines. Moreover, the underpinning the negative outlook include the competitive
use of drones may also become central to various functions market conditions in core lines of business along with poor
of different businesses in future where humans may be pricing discipline." "Furthermore, there is an unhealthy
unable to perform the tasks. reliance on unrealized and realized gains from investment
holdings, particularly emanating from typically high-risk
The insurance plan offers commercial drone owners and investment strategies. In addition, a more recent dynamic
operators third-party-liability claims cover for property is that of the global COVID-19 pandemic, which is expected
damage and bodily injuries. This policy is the first-of-its-kind to result in a level of volatility in top-line and bottom-line
in the non-life insurance segment in India which will be results of Indian non-life insurance."
offered on-demand to customers on 'pay-as-you-fly' concept.
Despite the advantages that drones offer to commercial The market has been loss-making on the writing side. "So
users, the safety of third-party assets remains unanswered. the insurance companies in this market have been relying
on investment returns to generate overall positive
Addressing this need, the new insurance policy provides operating earnings. The companies have been quite
commercial drone owners/operators third-party-liability aggressive investing in high-risk asset classes such as equity,
claims cover which may be incurred while conducting low-quality fixed income and real estate assets.
activities like survey, mapping, monitoring, disaster relief
initiatives, civil administration services, use during festivals "Those asset classes have been generating quite good
and events, property management and travel and tourism returns over the last years. However, during the pandemic,
purposes among others. This cover will be offered to the stock market has fallen by over 20% in the first quarter.
registered drone owners and operators holding a This has impacted the capital position and earnings of non-
commercial drone pilot's certificate or a license issued by life insurers." Arguably the biggest benefit will come in the
certified training schools in India. claims management and customer service areas in the form
of increased digitalisation. The need for social distancing
Pricing & investment challenges: has forced consumers to become comfortable with virtual
Competition, poor pricing discipline and investments are interaction.

28 January - June 2020 Life Insurance Today