India is one of the top worst-hit countries by the COVID-19 pandemic. We can see that COVID-19 has impacted many sectors in India, especially the health insurance sector.
Demand for health insurance has increased exponentially, and certain positive changes are being seen in the health insurance industry over the past 2 years, along with some challenges.
The insurance providers are adjusting to the current insurance requirements and making changes accordingly in order to fit insurance aid to cover the implications of COVID-19. This has resulted in the inclusion of COVID-19 specific health insurance plans with the regular health insurance plans by the insurers for the policyholders.
With digitalization in the health insurance sector, one can simply purchase or renew their health insurance policy using the official website of the insurer. Due to the widespread COVID-19 pandemic, health insurance providers are facing varied challenges, but the health insurance sector is making its way out and is trying to fulfill the requirements of the customers and changes in the world.
The following points indicate how COVID-19 is impacting Health Insurance Sector:
- Product development:
- Increased Sales:
At one point, the COVID-19 became one of the biggest health risks on the planet, and people started to realise the significance of having a financial backup for medical emergencies. Therefore, more and more people started investing in health insurance policies for themselves as well as their loved ones. Additionally, when health insurance providers started to develop exclusive health plans for COVID-19 related implications, the demand for health insurance policies skyrocketed and is still increasing. The importance of health insurance is not restricted to the pandemic but extends to any point of time in life since it provides you with a financial cushion in times of unforeseen medical emergencies.
- Claim Payouts:
The COVID-19 impacted the health insurance sector in a good way as well as put a few challenges in front of the insurers. IRDAI mandated and instructed the health insurance providers to include COVID-19 covers in their regular health insurance plans for all the policyholders. Since the treatment for COVID-19 has not been included under the active products, claims made by the customers are additional burdens on the insurers, especially when treated at private hospitals. The claims from people suffering from critical diseases like diabetes, respiratory disorder, etc. along with the threat of COVID-19 have increased, resulting in financial recalibration from the insurer’s side. Considering the country-wide business disruption owing to the pandemic, the IRDAI has advised insurance companies to extend the grace or delay period by 30 days in case of policy lapse or renewal. This might pose some immediate liquidity challenges for insurance companies.
The global pandemic has transformed and brought a lot of changes in the health insurance sector. The health insurance sector is impacted positively in most aspects, but at the same time has also faced some challenges.
Buying health insurance and securing yourself and your family against any unforeseen emergency is one of the most crucial things you can do.
This article is authored by Mehul Shah, Senior Executive Vice President & Appointed Actuary at Kotak General Insurance, and the views expressed in this article are the author’s personal views.