Indians rely heavily on bikes for their day-to-day commuting. Two-wheelers are affordable, as well as suitable for Indian roads. This makes the country one of the largest markets for two-wheelers in the world. Two-wheeler sales in India saw the biggest rise in 2019. As the law mandates third-party insurance for all two-wheelers, the bike insurance industry also saw a lot of growth. Even comprehensive bike insurance policies found many takers.
The risk of road mishaps in the country remains high. Fortunately, insurance coverage adds a lot of protection, both to the bike and to the owner.
Challenges faced by the bike insurance industry due to COVID-19
2020 has been a very unpredictable year. The COVID-19 pandemic and the resulting lockdowns kept people at home. With businesses shut, the economy also saw a decline. The automobile industry was one of the worst affected. New vehicles contribute to a major portion of the sale of bike insurance. With bike sales witnessing a constant downfall, the insurance market also took a hit. There was a fall in bike insurance renewals as well since vehicles were scarce on the roads. With job losses and salary cuts frequenting the private sector, people started cutting down on expenses, and thus bike insurance renewals were put on hold. Reduced traffic and a low rate of mishaps also became contributing factors to this economic lull.
Another challenge that the bike insurance industry came across was concerning claim surveying. When the estimated claim values run high, insurers have to deploy independent surveyors. Finding surveyors during the lockdown proved to be a difficult task. But the lockdown also meant a decrease in accidents. Thus, the volume of claims also declined. For the industry, this was a bright spot between the gloom.
Reopening of the economy and a silver lining for bike insurance offerings
The country is now slowly opening up. Even as the pandemic shows no signs of respite, the government is trying to bring back normalcy. Businesses are back into operation, and people are out and about again. However, not everything is going to resemble the pre-COVID-19 situation. People might be heading back to their workplaces now, but the masks and social distancing have become the new norm. The fear of contracting the virus is making people wary.
In cities and metropolitan areas, public transport serves lakhs of people every day. City buses, local trains, and metros are now gradually restarting operations. However, the crowd is expected to be a lot less than usual. This is because people are making a conscious effort to stay away from public spaces. In such a scenario, they have turned to a more personal mode of transport. This might be causing bikes to reappear on Indian roads again.
This increased sense of awareness to avoid crowds could be a silver lining for the bike industry. Even those who previously took a train or bus to work are now looking for private transport options.
Current trends and future prospects in the bike insurance industry
As the year enters the fourth quarter, the bike insurance industry is ready for recovery. New bikes are likely to drive bike insurance sales. Bike insurance prices are now being slashed. Policy renewals might also see a boost as insurance providers offer flexible and affordable coverage. The decline in the renewal cost of bike insurance is expected to get people to renew their two-wheeler policies. Moreover, online bike insurance renewal options have made the process convenient. More and more customers are now relying on online renewals since it allows them to get their work done while also following the social distancing norms.
Though it might be long before the bike insurance industry could get its pre-COVID numbers back, the process of recovery has already begun. In the quest to get back on track, insurers are offering attractive customization options. Discounts have also become a significant attraction. Apart from this, insurers are looking to form strategic partnerships with other businesses in the aftermarket segment. This allows them to offer more comprehensive solutions to their existing customer base and acquire new clientele.
To sum it up
COVID-19 has changed the spending habits of people, and some of these trends are here to stay. Understanding consumer behaviour and market perception towards the insurance industry and drawing actionable insights will go a long way in formulating solutions that provide value for money. With several options available to the consumer at the click of a button, businesses are rethinking their approach to position themselves in the market uniquely. These business decisions act as a point of differentiation for insurers and give them the much-needed competitive advantage to attain market leadership.
For customers who are planning to invest in two-wheelers, it is an excellent time to shop for bike insurance policies. Getting a comprehensive coverage plan now might cost customers less as premiums are more competitive than ever. By providing holistic protection, a comprehensive plan transfers most of the risk to the insurers. When customers get to access such foolproof protection at reasonable rates, it is a win-win situation.