The on-going coronavirus pandemic changed the landscape of the Indian insurance coverage market in a large way. The adjustments are anticipated to not only raise the insurance coverage penetration price in the nation but also bring a conscious shift in the insurance coverage item-mix. Over the final 10 months, the quantity of business enterprise that has occurred via the protection portfolio has improved by leaps and bounds. Insurance is steadily becoming witnessed as a pull item from becoming a push item all this although. For the 1st time, buyers are asking insurers about the suitable protection goods that would meet their demands aptly. Overall the awareness about insurance coverage, as properly as the demand for protection goods, has witnessed an uptick.
Throughout the year, digitisation was the crucial pillar that accelerated the development of the whole insurance coverage ecosystem from advertising and marketing and digital policy issuance to claim submission. Also, the way folks accepted and adopted digital processes was commendable and a driving element in the immense development of the insurance coverage market. Digitalisation drastically helped insurers – specifically life and well being – to develop and distribute simplified, digital-native options in a expense-efficient manner.
A huge credit for this considerable shift in the consumer’s acquiring behaviour goes to the Insurance Regulatory and Development Authority of India. The regulator, ever given that the onset of the COVID-19 pandemic, has been leaving no stone unturned to make insurance coverage goods and services inside the maximum attain of the shoppers in the most handy way achievable. IRDAI even announced quite a few relaxations for buyers in 2020 in view of the unprecedented predicament prevailing in the nation.
Let us have a rapid appear at the crucial adjustments that changed the face of the insurance coverage market this year.
Life Insurance Industry
Within a handful of weeks of the onset of the COVID-19 pandemic, as the nation reported more than a dozen deaths due to coronavirus infection, there was a sense of worry and anxiousness amongst the folks if death due to the pandemic will be covered below life insurance coverage policy. To clear the air, insurers on the suggestions of the IRDAI came forward and clarified that death due to COVID-19 will be treated as a common death and the claim will be admissible if the coronavirus was diagnosed post-policy issuance. The step ensured policyholders are at peace in the time of panic. The pandemic certainly produced folks realise the significance of insurance coverage and specifically term and well being insurance coverage plans. Within a month of the COVID-19 pandemic, the term life insurance coverage business enterprise began gaining traction. In order to make confident that folks are capable to purchase insurance coverage from the comfort of their residences, insurers began issuing policies via tele-healthcare in spot of a mandatory physical healthcare. This ensured that although folks followed lock-down guidelines and stayed at property, they nevertheless had access to sufficient coverage.
To assistance insurers, the regulator – IRDAI – permitted insurers to take approval of buyers via e-KYC and video KYC to problem them a policy in spot of submitting physical documents, which was not achievable for the duration of the many phases of lockdown. One of the most significant regulations by IRDAI in the year 2020 was directing life insurers to come up with a common term life insurance coverage item – Saral Jeevan Bima from January 1st 2021. Saral Jeevan Bima is believed to be the suitable step in the path of standardizing term insurance coverage plans. The strategy will provide decent coverage to the shoppers with no any restrictions on age, gender, revenue, occupation and geographical place. As the characteristics and policy wording will be identical across all insurers, comparing and acquiring a term insurance coverage strategy would develop into a lot simpler and handy for the buyers. The common term strategy is an effective step of IRDAI towards rising the life insurance coverage penetration price in India.
Health Insurance Industry
The year 2020 was a year of total transformation for the well being insurance coverage market as properly, as it also went via a pool of transformations to make well being insurance coverage inside the attain of one particular and all. Usually, most insurers did not cover hospitalisation due to pandemic below well being insurance coverage policy, this developed a lot of nervousness amongst the buyers. However, with timely intervention of the IRDAI, all common and specialised well being insurers have been directed to cover hospitalisation due to COVID-19 below a standard well being insurance coverage policy and provide cashless remedy to the buyers. While all current well being insurance coverage policies began covering the pandemic from day 1, buyers acquiring a new well being insurance coverage cover had to serve a waiting period of 15-days. Just like term life insurance coverage, the business enterprise of well being insurance coverage also began gaining traction inside a month of the onset of the COVID-19 pandemic with most insurers reporting a rise in the business enterprise by 35 – 40 per cent. In the well being insurance coverage market also, the regulator permitted insurers to problem policy via telemedical, e-KYC and video KYC to limit the movement of folks. At the identical time, claims are becoming processed digitally with no any want to submit physical documents.
During the pandemic, the regulator wanted to bring maximum folks below the insurance coverage umbrella so that they can take the finest achievable remedy for coronavirus infection. To make it achievable, the regulator advised insurers to come up with coronavirus particular insurance coverage plans at the earliest. Adhering to IRDAI recommendations, in the month of July, insurance coverage providers launched two common COVID-19 well being insurance coverage policies – Corona Kavach and Corona Rakshak. Both these policies cover the expense of remedy of COVID-19 and co-morbid situations, which includes pre-current situations with the tenure ranging from 3.5 months to 9.5 months. Within a handful of months, more than 3 million policies have been purchased by shoppers to remain financially safe. Some other crucial developments in the well being insurance coverage segment include things like permitting shoppers to spend their well being insurance coverage premiums in simple month-to-month instalments. This helped in rising affordability, as buyers are now capable to purchase well being covers with higher sum insured. Inclusion of telemedicine below well being insurance coverage cover and coverage for uncovered ailments like mental illness, strain or psychological disorder and age-associated problems below standardisation of well being goods are some other prominent developments.
Motor Insurance Industry
Just like life and well being insurance coverage market, the Indian motor insurance coverage market as properly went via a handful of however considerable adjustments in the year 2020. The insurance coverage regulatory authority decided to scrap the lengthy-term motor complete insurance coverage packages for 3 years for 4-wheelers, and 5 years for two-wheelers from August 1st. The step was taken post taking feedback on the way the lengthy term package goods have been priced and the manner in which they used to function. For buyers, the move indicates deduction in expense of 1st-year insurance coverage when acquiring a new 4-wheeler and two-wheeler. The step also guarantees that the buyers do not have to necessarily continue with the identical insurer for 4-years if not happy with the services supplied.
The year 2020 also witnessed the introduction of “Switch On-Switch Off” insurance coverage in motor insurance coverage sector. The strategy enables folks to spend the premium only at the time they want the insurance coverage cover rather than getting the insurance coverage for one particular total year. Some prominent insurers which came with sand-box goods in the category include things like Edelweiss General Insurance (EGI) – Edelweiss SWITCH and Bharti AXA General Insurance – Pay-As-You-Drive.
(By Amit Chhabra, Head-Health & Travel Insurance, Policybazaar.com)