Many of the insurance companies have been facing severe underwriting losses in the health segment and there are chances there would be some price correction especially in the group health insurance.
Even as India along with other countries in the world struggle to come out of the Covid-19 pandemic and its aftermath. Non-life insurance companies have an option to turn this crisis into an opportunity and expand their wings across the country. Even now a large Indian population in India does not have any health insurance and this is the right time for the Indian insurers to hit the ground running.
Currently, it is estimated that around 30-35 per cent of the population of India is covered under any health insurance and insurers should aspire to take it up to 50 per cent in this year itself because there is a lot of demand for health insurance from the policyholders. Additionally, things might get difficult once the lock-down 2.0 is lifted, but non-life insurance companies should aim to turn this crisis into an opportunity. In the past few weeks, there has been a surge in demand for health insurance after the breakout of the Novel Coronavirus.
Even the government and regulators have said that companies should provide mandatory medical insurance coverage to workers as part of the National Directives of Ministry of Home Affairs (MHA), GOI. Recently Insurance Regulatory and Development Authority of India (Irdai) said that all industrial and commercial establishments, workplaces, offices, etc. should put in place arrangements for the implementation of Standard Operating Procedure (SOP) before starting their functioning and as per clause no. 5 of Annexure-II of the said SOP for social distancing for offices, workplaces, factories and establishments, medical insurance for the workers to be made mandatory.
“In light of the above, all General and Health Insurance companies may offer comprehensive health insurance policies either to individuals or groups in order to enable the listed organizations to comply with the above-referred directions,” said IRDAI.
The insurers are also advised to devise comprehensive Health insurance products with simple wordings, conditions, and at an affordable cost to be offered to the stated organizations. Organizations should be able to continue the Medical Insurance Policy offered by insurers not only for the present situation but for all time.
In the recent past, we have seen insurers launching a standard health insurance policy called Arogya Sanjeevni with a minimum sum insured of Rs 1 lakh to Rs 5 lakh. This move will help to create more awareness about health insurance. Irdai had also asked insurers to launch this policy in order to simplify the wordings of general clauses in the policy contracts and ensure uniformity and greater transparency. This product will encourage people to buy health insurance as this policy is simple to understand.
Many of the insurance companies have been facing severe underwriting losses in the health segment and there are chances there would be some price correction especially in the group health insurance. With over 70 per cent ‘out-of-pocket’ expense burden on the consumers, the market is ripe for health insurance entities including global players to open their shops in India. However, insurers must focus on cost, access, and quality to get successful in this market as there are several challenges in Indian markets.
by, Rakesh Goyal, Director at Probus Insurance