With general insurers being given greater freedom by IRDA to design products, we are likely to see a slew of launches this year. Neelesh Garg, director-retail, ICICI Lombard General Insurance, spoke to Suneeti Ahuja about the products his company plans to launch.

•What is in store for retail customers in 2009?

Health and motor continue to be the prime areas in case of the retail segment. Both segments are expected to come up with a lot of innovative products this year. In motor, one product that might come in is zero depreciation. Today whenever there is a claim, certain amount is deducted first and the remaining is paid to the insured. Insurance companies deduct a percentage according to the tariff. With new products coming in, a person can pay higher premium and get zero depreciation clause entered into the contract.

•What are the other innovations you are looking at in motor insurance?

Today we have standardised products for everybody. So whether it is a taxi driver, who drives his vehicle a lot, or a conservative driver, who drives cautiously and mostly within the city, both pay the same amount of premium. We might see products that charge you different premiums depending on your usage.

We are also looking at products such as pay-as-you-drive. This will require a GPRS (global positioning radio system) device to be fitted in every car. This device will provide an insurance company with details like: average speed at which the driver drives; whether the car runs more in the city or on a highway; and so on. The insurance company will have data on the quality and quantity of drive and decide the premium accordingly. Companies in the US are already doing this. We are studying those models. Installation of these devices is also expected to bring down theft. This product is still on the drawing board. There is a cost attached with the device. Right now we are working out the economics between the manufacturer, financier, customer and insurer. Although this pay-per-mile kind of plan is still at the drawing board stage, we expect it to be launched within the next 12-18 months.

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