Authored by Ajay Shah
Given that the country’s individual health insurance penetration is only around 3 percent, COVID-19 helped health insurance become a priority for the common man. The surge in these policies began in end-April and the beginning of May 2020, fuelled by rising COVID-19 cases.
Coverage Gains Momentum
The rise in the cover amount was mainly propelled by the realization that the cost of treating COVID-19 could be extremely high. The directive from IRDAI (Insurance Regulatory and Development Authority of India) for insurers to mandatorily provide a standard coverage for COVID-19 through Corona Kavach and Corona Rakshak policies also helped their cause.
Given the urgency of Covid 19, these products addressed the immediate need of the consumers. However, buying a comprehensive cover remains a smart choice because it provides wider coverage against diseases or accidents and not just Covid-19. Further, comprehensive policies see better renewals for long term coverage and hence lesser incidence of dropouts.
The General Insurance Council’s data reveals that in July, health insurance premiums accounted for 32.7 percent of the general insurance market. Thanks to these tailwinds, research reveals that in the months ahead, health insurance will keep picking up due to pandemic pressures on the public.
The pandemic also had significant impact on the sector’s way of operating. Health Insurance organizations were quick to move to technology-enabled servicing solutions that on the overall were beneficial for customers as they could avail services from the comfort of their home.
With consistent investment in technology, the presence of adequate security protocols etc. organizations could empower their employees to operate and manage company’s data seamlessly in a work-from-home environment. All departments like underwriting, operations, claims and customer-service were rendered fully functional on an almost immediate basis.
In addition, having clear business continuity plans ensured employees were aware of the immediate steps they had to adopt in the given situation and this led to a smooth transition across teams. Since physical meetings and interactions were not possible or restricted; digital platforms helped in keeping communication channels open.
Meanwhile, despite the arrival of vaccines, apprehensions of contracting COVID-19 will continue nudging people towards health insurance in 2021 too. The health insurance penetration rate that was slow paced for years is expected to gain further momentum in 2021.
A noticeable trend concerns people taking the trouble of learning more about insurance policies and evaluating the options to ensure they get more value for their money.
Lockdown restrictions meant facilitating medical examinations was no longer easy or possible in many cases. To overcome the barrier, insurers began issuing policies through Tele-MER – recorded phone interviews conducted by proposers in gathering risk-related data and the medical history of applicants.
Another interesting trend was the change in the attitude of millennials towards health insurance. This segment was reluctant to put down money for health insurance, believing they did not require it since they were young and healthy. But as coronavirus began infecting both old and young, almost overnight, millennials realised that health insurance was a necessity even for them. Within weeks after the outbreak, millennials began buying health insurance. Their motive was twofold – to protect their financial stability if they required expensive hospitalisation and ensure economic security for families in case of an unwanted eventuality.
Although the majority of working millennials have a corporate health insurance cover provided by their employers, it is often inadequate in covering the entire family. This is particularly true because of rising healthcare costs and the growing number of infectious diseases. The other advantage of these first-time insurance purchasers – a significant section prefers comprehensive health insurance coverage; a prudent purchase by all accounts.
In 2021 too, the health insurance industry expects the tailwinds from the pandemic to sustain the shift towards greater penetration among untapped segments. Simultaneously, data-driven innovations and digital tools like AI, IoT, RPA (robotic process automation), machine learning and blockchain, among others, will help in speeding up administrative tasks such as underwriting, processing of claims and managing customer queries. All of which are expected to facilitate faster growth, benefitting both health insurers and the insured.
Ajay Shah is Director and Head – Retail Sales at Care Health Insurance
(Formerly Religare Health Insurance). Views are personal
First Published: IST