This year, the regulator's noteworthy initiatives include introduction of standard products with a view to enhance consumer confidence as well as easier Know Your Customer (KYC) norms.
From Corona Kavach to Corona Rakshak, insurance regulator IRDAI made intense efforts throughout the pandemic-disrupted 2020 to ensure adequate choice of insurance policies for individuals that cover treatment costs for coronavirus-related health issues.
This year, the regulator’s noteworthy initiatives include introduction of standard products with a view to enhance consumer confidence as well as easier Know Your Customer (KYC) norms.
As COVID-19 started spreading in March, the watchdog asked insurers to expeditiously settle hospitalisation claims concerning treatment related to coronavirus infections.
And the Insurance Regulatory and Development Authority of India (IRDAI) also directed insurance companies to design specific products to cover the cost of treatment related to coronavirus. Soon, short-term Corona Kavach policy was launched.
In the last six months, the regulator introduced several new insurance products, including Arogya Sanjeevani, Corona Rakshak and Corona Kavach.
“The insurance regulatory body maintains that introduction of standard insurance plans will make it easier for consumers to select services owing to the standardisation of the process and easy availability of offered services,” Tarun Mathur, Chief Business Officer of Policybazaar.com, said. Niraj Shah, Chief Financial Officer of HDFC Life said the regulator has been proactive and customer-centric, supporting the creation and distribution of products that offer relevant benefits to customers.
According to him, facilities such as alternatives to wet signature where OTP (One Time Password)-based consent can be obtained for insurance plans and introduction of video KYC were in the interest of customers as well as the industry.
“We remain optimistic about the medium to long term prospects of the insurance industry in India. We believe protection and retiral categories are multi-decade opportunities and will grow faster than savings. “We expect insurance demand to remain robust on the back of higher awareness and the need to accumulate savings for the long term and protecting one’s existing assets,” he said.
In an attempt to make insurance affordable and available for all sections of the society, Mathur said IRDAI issued a circular to all life insurers directing them to come up with a standard individual term life insurance product named ‘Saral Jeevan Bima’.
“The introduction of the Saral Jeevan Bima plan will be a revolutionary move in the life insurance sector as the plan is aimed at providing protection to citizens of Bharat who otherwise are left behind without any cover and financial protection,” he said.
The product will be launched on January 1, 2021. The COVID-19-specific products came out in July. Prior to that, there were a handful of such covers but those were mostly low sum-assured products.
There was also good growth in demand for traditional health products till July. “But after the standard COVID products were introduced, people, who earlier were not able to afford the comprehensive policies, started buying COVID-specific products,” Mathur said.
Anand Roy, Managing Director of Star Health and Allied Insurance, said the pandemic also forced insurers to hasten digital initiatives in both customer acquisition and also on the claims services front. This year also saw few health insurers launch unique initiatives like tele-medicine consultation and bring about products with enhanced focus on wellness of the mind and the body.
“From a customer service perspective there were many improvements wherein the regulator IRDAI standardised exclusions in health insurance policies and the number of non-covered items was reduced from 199 to 68 items. Further, the regulator made provisions for insurers to cover these 68 excluded items,” Roy said.
In the last financial year till October 2019, growth rate in health retail in the insurance sector was 10.95 per cent and the market share of retail segment was 36.26 per cent. Whereas, in this fiscal till October 2020, the growth rate in health retail segment is 33.64 per cent and the market share of retail segment is 42.30 per cent.
“In 2021, we expect IRDAI to continue the good work done in the past and bring about more customer friendly initiatives which will lead to increased penetration of health insurance in the Indian market,” Roy said.
Akash Anand, Managing Director of Bimakaro opined that norms for health insurance portability should be made simple and clear to insurers and the insured for ensuring proper implementation.
“Intent must be backed by clarity for eventual success and greater penetration of health insurance services across India,” he said. Bharti AXA Life Insurance MD and CEO Parag Raja said that 2020, which began on a grim note, led the insurance industry to embrace enhanced customer-focused solutions, pertinent cover for pandemics, improved digital access, speedy claims settlement and increased product and service options and benefits.
“As we look to a 2021 recovery from the pandemic and the subsequent economic fallout, we are confident of navigating the challenges around the COVID-19 and going back to the pre-COVID levels in the next fiscal,” he said.
IRDAI was quite prompt in announcing measures that made protection products easily available to all amid the pandemic. Industry expects the regulator will keep up the tempo in 2021 as well.