India’s unparalleled fascination with jewellery, particularly gold, which is considered a cultural hallmark and a traditional investment tool, underscores the immense sentimental and financial value this precious metal holds for individuals and businesses alike. India is the second-largest consumer of gold jewellery in the world, making insuring this segment a significant opportunity for the insurance sector and imperative for the security of both consumers and gold jewellers.
While consumers can avail jewellery insurance through insurance companies directly or through embedded insurance, B2B jewellery insurance is a significant but often overlooked segment in India. The most standard insurance policy in this segment is jewellers block insurance, offering comprehensive coverage protecting jewellers from theft, burglary, robbery, dishonesty, mishaps, fire, flood, etc. In addition to the standard jeweller’s block, jewellery insurance can also be topped up to cover Point of Sale (B2C), Keyman Insurance, Group Medical Coverage (GMC) for employees, Global Medical Covers, Personal Insurance Covers, and Credit Insurance covers in case of bankruptcy or wilful default.
Gems and jewellery contribute to 7% of the country’s GDP and 15.71% of India’s total merchandise exports. Consequently, this segment brings in a huge amount of foreign exchange and provides employment to over 5 million workers in both organized and unorganized sectors. The overall size of the jewellery insurance market is estimated to be around Rs.250 crores, and this segment needs B2B insurance to safeguard the Rs.4,70,000 crore (approx.) market size.
Despite jewellery being a significant category in insurance, the biggest challenge is the lack of awareness among jewellers about the importance of this insurance. The market is growing at 5-7% per year; however, penetration is very low, particularly in Tier 2 and 3 cities and towns, where smaller jewellers run the ecosystem. There is an increasing need for insurance companies to come to the forefront and educate jewellers about the end-to-end benefits of jewellery insurance. The introduction of tech in this industry will help reach out to more jewellers, thereby increasing penetration. Moreover, the jewellery market in this country is very emotionally driven, providing ample scope for jewellers to grow and cover their risks more effectively.
Usually, the jewellery insurance market witnesses its peak during the festive and wedding seasons, and it is always suggested that jewellers insure their assets adequately during these times, as the chances of theft and burglary increase. Also, most common claims arise around acts of dishonesty by internal employees. When it comes to choosing the right insurance provider, one must ensure that they choose insurers with a good claim settlement history, timely support, the right solvency ratio of the insurer, and customized coverage options. Claim settlement usually takes around 30-60 days.
Associate Director
Alliance Insurance Brokers
Jewellers should also be aware that wilful acts or gross negligence, losses arising outside specified territorial limits in the schedule, destruction caused by own fermentation, natural heating, or spontaneous combustion, war, and nuclear group of perils are usually not covered in jewellery insurance. The insurance premiums can fluctuate based on policy type, jewellery value, and jeweller’s risk assessment; the premiums are usually higher than other insurance policies considering the risk that the cover holds.
One of the most important factors that the jewellery sector should take into consideration is the importance of understanding insurance for jewellery. Unlike health, motor, and life, losses from jewellery insurance can be huge and take years for people to recoup. Today, with technology, insurance companies are trying to make jewellery insurance more inclusive for business owners. The end-to-end process for insurance, from buying to servicing and claim settlements, is becoming more streamlined so that jewellers can be encouraged to invest in jewellery insurance and safeguard their assets worth millions. Jewellery insurance is an essential part of any jeweller’s risk management, offering financial protection in cases of theft, fire, or damage, and there is a tremendous need for jewellers to make insurance a part of their asset portfolio considering insurance as an investment and not an expense.
