Shriram General Receives IRDAI Regulatory Sandbox approval for Fire Loss of Profit Insurance Cover

Shriram General Receives IRDAI Regulatory Sandbox approval for Fire Loss of Profit Insurance Cover

  • The application for the Fire Loss of Profit Insurance product provides coverage against all the 12 perils covered under standard Fire & Special Peril Policy
  • The Validity Period of the product as per sandbox approval is six months commencing from November 15, 2021 to May 14, 2022
  • The policy can be availed without any Material Damage (Fire) cover

Shriram General Insurance, part of the Shriram Group, has received the regulatory sandbox approval to launch an innovative concept, Fire Loss of Profit insurance cover. The product covers loss of gross profit or income, and/or increase in the cost of working due to reduction in business turnover/output caused by covered perils. Under Shriram General’s offering, liability will be admitted under the loss of profit policy when such loss is caused because of the mentioned perils without any compulsion of material damage policy.

Traditionally in India, Fire Loss of Profit Policy (FLOP) is contingent upon Material Damage (fire) Policy. This means that liability under FLOP can only be admitted if material damage policy is in force and material damage policy has been paid or admitted liability for the said property.

As a result, Loss of profit policies–also known as Business Interruption Insurance or Consequential Loss Insurance–are usually sold alongside Fire or Machinery Breakdown Insurance policies.

Insurance Regulatory and Development Authority of India launched the regulatory sandbox on Jul 26, 2019 under the IRDAI (Regulatory Sandbox) Regulations, 2019. Shriram General applied for the product under the second cohort, which was open for applications between September 15, 2020 and October 14, 2020.

Some Key Features Include the Following:

  1. The Standalone FLOP Insurance policy provides coverage against all the 12 perils covered under standard Fire & Special Peril Policy.
  2. The Validity Period of the product as per sandbox approval is six months commencing from November 15, 2021 to May 14, 2022.
  3. The policy can be availed without any Material Damage (Fire) cover.
  4. There is no such binding of first hand admission of liability under material damage Policy.
  5. This innovative product is specially designed for shopkeepers, hotels and restaurant, small scale manufacturing unit, automobile workshop, etc.

Mr. Anil Aggarwal, MD & CEO of Shriram General Insurance Company said, “The regulatory sandbox initiative has allowed us to create an innovative and compelling, yet simple product. The company is targeting 10,000 policies on a pan-India basis. Business enterprises, especially smaller business units, have withstood the COVID-19 pandemic despite several challenges. Our priority and endeavour has been to provide them with solutions that can offer contextual value and support their growth journey. We believe the non-binding, first-of-its-kind Fire Loss of Profit Policy will cement our relationship, and help us prove to be steadfast partners of the small business community.”

About Shriram General Insurance Company

Shriram General Insurance Company is a joint venture between Shriram Capital Ltd. the holding company for the financial services business of the Shriram Group and Sanlam Limited (South Africa), a leading Financial Services Group of South Africa. Shriram General Insurance a Jaipur- based 13-year-old company licensed with the IRDAI (Insurance Regulatory and Development Authority of India). The Company offers a complete range of general insurance products, ranging from Motor, Travel, Home and Personal Accident in the retail space and customized products like Fire, Engineering, Marine Insurance in the corporate space. The Company also offers a range of products for rural India. The company is the 7th largest private non-life Insurer in in Motor segment in India and manages assets worth INR 105.47 Billion with 40 lakh live policies. The company has 201 branches in 24 states and employee strength of 2800 as of 30 June 2021 pan India.

About Shriram Group

Shriram Group is India’s leading financial conglomerate with a dominant presence in commercial vehicle (CV) financing, retail financing, chit fund, equipment financing, housing finance, life insurance, general insurance, stockbroking, distribution of financial products, and wealth advisory services. The Group focuses on serving the underserved and is driven by its Financial Inclusion agenda of bringing finance to low-income families and small businesses. Shriram Capital Limited is the holding company for the Financial Services (Shriram City Union Finance Limited & Shriram Transport Finance Limited) and Insurance entities (Shriram General Insurance Company Limited & Shriram Life Insurance Company Limited) of the Shriram Group. Shriram Housing Finance Limited is a subsidiary of Shriram City Union Finance Limited. The lending and insurance companies were created with the primary objective of optimizing the synergies across the Group’s entities.

Shriram Group together has an overall customer base in excess of 21.5 Million, around 74,500 employees across 3,950 branches. Net profit of INR 49 billion with Assets Under Management (AUM) of over INR 1.75 trillion (FY21).