Rising toll sparks big rush to buy covid-19 insurance2 min read . Updated: 28 Sep 2020, 05:40 AM IST
In Apr-Aug, 6 mn people bought health policies for a sum assured of at least ₹2 tn
Mounting covid-19 deaths are causing a rush for insurance cover, making health policies against the virus the highest sellers in Indian insurance history, according to figures made available to Mint.
In the April-August period, around 6 million people bought covid-19 health insurance policies—Corona Rakshak and Corona Kavach—for a total sum assured of at least ₹2 trillion.
All other health products together recorded less than a third in sales at 1.78 million policies, while their total sum assured was less than half at ₹87,856 crore during the same period, according to industry estimates and regulatory records.
Covid-19 insurance recorded the highest ever sales, at the fastest ever pace, for a health insurance product in these five months. The figures are multiple times higher than the total new retail sales of all health policies together in any given full financial year in the history of insurance.
According to data shared exclusively with Mint by a large insurance firm, during April 2018-March 2019, fresh retail business of health insurance saw 2.8 million policy sales for a total sum assured of ₹1.2 trillion. During fiscal 2020, these numbers increased to 3 million policy sales for a total sum assured of ₹1.35 trillion.
“Health insurance cover for covid-19 will always find takers owing to the simplicity of product design and affordability and flexibility associated with these products," said Sanjay Datta, chief-underwritings, claims and reinsurance at ICICI Lombard General Insurance Co. Ltd, the largest private-sector insurer. “The fact that we are in the midst of a pandemic also leads to an element of panic buying, which cannot be ignored."
The government’s efforts to educate the masses about covid-19 has boosted sales, and covid-19 products conceptually have been remarkable, which is why they are gaining in popularity, said Datta.
Amit Chhabra, head of health business at Policybazaar.com., said, “The growth has been unprecedented."
“The way it has driven the adoption of insurance among people is something happening for the first time. Every year, we typically see a 15-30% growth, but this year we see a 70-80% growth in terms of enquiries and customers showing interest in buying health insurance. That shows both the fear as well as the awareness. In the voluntary space, this has certainly staged the fastest growth among all products," said Chhabra.
With the number of covid-19 cases still rising, the monthly growth in covid-19 policy sales and the sum assured could reach around 30 million and ₹10 trillion, respectively, in a year’s time, according to the chairman and managing director of a large state-run general insurance firm.