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The fear surrounding covid-19 has resulted in increased awareness about health insurance. While health insurers have seen a part of this awareness leading to higher demand, the long-term impact remains to be seen. In an interview for Mint’s Pivot and Perish series, Mayank Bathwal, chief executive officer, Aditya Birla Health Insurance Co. Ltd, shared his views on the impact of the pandemic on the industry. Edited excerpts:

Awareness for health insurance has gone up due to covid-19, but standalone health insurers have reported 31.12% sequential decline in the June quarter. What could be the reasons?

We saw 71% growth in June compared to the same time last year. But the drop from March to June quarter is something that happens every year because of seasonality, as more people buy towards the end of the financial year. Due to this, renewals also take place in the March quarter, resulting in total premium growth. So, going by this, the premiums in the June quarter were lower despite the demand spurred by covid-19.

But on all counts, awareness for health insurance has gone up and the real opportunity is to reach out to customers with relevant offerings.

What challenges did covid-19 bring for health insurance, and how are you dealing with them?

The first challenge was to prepare ourselves to work from home. While most organizations would have had a business continuity plan and a disaster recovery plan from a technology standpoint, I don’t think any organization globally would have been ready for a 100% work-from-home situation. More than fresh sales, getting ready to adjudicate claims was important. Claims, especially cashless claims, is a sensitive matter and if it’s for covid-19 then the customer is more anxious. Digital readiness became a big area of focus. For reimbursement claims, where we typically require original documents, we had to quickly communicate with our customers and provide for the flexibility to send scanned documents online. But this also gives way to fraud and abuse, so for suspected cases we requested physical documents.

The other challenge was to prepare the sales force. We had to quickly train our agents and other partners to sell insurance virtually, which most agents were not used to. For our wellness programme benefits, we had to provide the flexibility of a home activity-based incentive model because people couldn’t leave their homes. Finally, maintaining employee safety and morale was another area of focus.

Will the regulator-mandated covid-specific policies help spur long-term demand?

There are two categories of customers; one who already has some health insurance and others who don’t. The role of covid-19 products is different for both categories. Someone with a 20 lakh cover may give covid-19 policy a miss, but someone with a 5 lakh cover may look to buy the covid product to bump up coverage. While it is advisable to buy a comprehensive health product because there are a host of diseases today, in case there’s a liquidity problem then some people may want to go for the covid-19 products which are low-cost. Sometimes it’s a question of experiencing. So, for someone who is apprehensive and does not want to commit to a long-term product, they could experience health insurance through these short-term policies, and then switch to a comprehensive policy. I think moments like these do leave a long-term impression. So, while the awareness may not continue in entirety in the long run, some part of it will stay.

More disputes between hospitals and insurers are emerging, affecting policyholders. The General Insurance Council prescribed standard rates for covid treatment. Will it lower disputes?

In times like this, there’s a journey that you have to travel before you get the optimal solution. There’s a lot of research and method that went into the rates that the GI Council has prescribed, so these are not arbitrary numbers. Data points, such as claim size and period of hospitalization across the last few months, were looked at to arrive at these rates. Treatment protocols, too, are constantly changing and things will keep evolving as we get more data. Conversations have moved forward in most cases, while in others, dialogues are still underway. In the interest of the policyholders, I do hope this gets closed quickly.

How has the pandemic affected health insurers in terms of business and operations? How does the new normal look?

With the shift to work from home, I think organizations will look at roles that don’t require employees to come to work every day. This will also allow organizations to lower costs, such as real estate and travel. Digital is becoming a way of life and, personally, I am a big fan of virtual, because of the prospect of scalability. Ours is a heavy-engagement model, so I think digital will redefine all operating processes. This also means that a newer kind of talent pool will have to come into organizations, people who are more digitally savvy and agile, and therefore, investment in both talent and technology will become imperative. Newer opportunities for partnerships with digital platforms will come up and with the Insurance Regulatory and Development Authority of India now allowing sandbox, more product innovations to sell contextual insurance through digital platforms has emerged as an opportunity for health insurers.

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