BackWill covid plans spur long-term demand for health insurance?
With covid-19 cases rising with each passing day, the Irdai is pushing insurance companies to offer short-term covid-19-specific health policies with an aim to bring the uninsured population within the insurance net. Will these policies spur long-term demand for health insurance? Disha Sanghvi asks experts
PremiumWith covid-19 cases rising with each passing day, the Insurance Regulatory and Development Authority of India (Irdai) is pushing insurance companies to offer short-term covid-19-specific health policies with an aim to bring the uninsured population within the insurance net. Other than the regulator-mandated standard indemnity policy, insurers are allowed to design their own short-term policies as well. While these policies may provide some immediate relief to the uninsured and vulnerable sections, will it spur long-term demand for health insurance? Disha Sanghvi asks experts
Anuj Gulati
Managing director and CEO, Religare Health Insurance
There’s a shift in mindset about health insurance
Covid-19 has been a wake-up call to those who do not have a health insurance cover, which explains the shift in health insurance from a good-to-have to a must-have product. Given the relatively higher cost of treatment, we’re witnessing an increase in the number of people opting for health insurance plans.
For instance, Corona Rakshak is an apt option that can address this need in the short term. What is convenient is that covid plans come with significantly lesser cost than a conventional health plan and, hence, lower barriers to entry, thus enabling the uninsured to experience health insurance. Even those who don’t have an immediate plan to buy health insurance can choose these products while assessing options for further coverage.
We expect a significant number of these customers will continue their coverage by moving to a conventional cover for the long term, creating a shift in consumer mindset in favour of health insurance.
Joydeep K Roy
Partner and leader, insurance, PwC India
Rise in demand may tighten underwriting, push up prices
Natural disasters spur the demand for insurance. But they also harden rates, underwriting standards and reinsurance benchmarks. Hence, a direct proportionality cannot be easily achieved. On the retail side, heightened interest should lead to shorter time for conversion and an increase in demand for those who are already sensitized for insurance. But the vast majority needs to be made aware.
Regarding employee benefits offered by corporates, a mandate from the government for all companies to offer it will drive the numbers. However, that should also see pressure on rates through concentration of risks of infectious diseases and, therefore, managed healthcare would be a key component to keep it controllable.
The government healthcare covers a vast swathe of the population who cannot afford insurance, and that should be sharpened for process and case management. Rising healthcare costs and ageing of the insured population will need to be managed by insurers.
Krishnan Ramachandran
Managing director and CEO, Max Bupa Health Insurance
Demand for comprehensive health policies has increased
Rising covid-19 cases have made people realize the significance of health insurance. This is the time to channelize heightened awareness to bring more people under the ambit of health insurance. However, it is important to understand that health insurance is a long-term product that needs to be renewed year after year.
To offer maximum value to customers, a comprehensive health plan that provides protection against a wide range of illnesses, including covid-19, will be more suitable. At the industry level, we are seeing increasing demand for comprehensive products. Hence, people should be encouraged to buy comprehensive health plans that provide holistic benefits.
Moreover, for first-time buyers who are looking at affordable solutions, Arogya Sanjeevani can be a good starting point.
An alternate plan could be to opt for a covid-19 benefit-based rider with a regular health insurance policy as it would be more beneficial in the short as well as long term.
Sanjeev Mantri
Executive director, ICICI Lombard General Insurance
Insurers need to embrace change, give more options
As cases continue to rise, we are seeing heightened awareness on the subject of health and protection. As consumers realize the high costs and complexities associated with the treatment coupled with rising medical inflation, the immediate uptick in demand for health insurance policies is natural.
We believe this current push for covid-19 policies as well as an upward trend for health insurance is a precursor to rising demand over the long term.
This shift in perception is the reason consumers are reconsidering their financial portfolio and channelizing savings to safeguard themselves against risks. This is likely to encourage people to look beyond corporate coverage and also opt for individual policies.
Insurers need to be well equipped to stay in sync with the changing times and offer solutions that are aligned to the new normal.
We need to be well-positioned to embrace this scenario by introducing timely and relevant solutions that are backed by technology and product innovation.
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