Among all odds, the health insurance sector is one of the few industries that is well poised to experience growth. The atmosphere of fear and uncertainty regarding the general health issues of people are forcing every conscious individual to have a backup plan, an option to safeguard from money drain or financial stress, in case one gets caught up by Covid-19 infection.
The huge rise in the number of infections per day in every state & UTs of India and now the small towns and cities joining the count, has established an inevitable fact that the pandemic may strike anyone, at any time, age no bar, time no bar and status no bar. In the initial months, we have seen the phases of lockdown in the country, but we know that the lockdown cannot last forever, neither it can stop the virus spread significantly, nor it can allow the people to get engaged in their livelihood, to do their jobs which is essential to earn a living.
Without means of earning, without a job, or with no money in hand, the misery of people can only increase. Hence every govt around the globe including our country has decided to lift the lockdown in different phases. It was well anticipated that the unlock phases would see a high spike in the number of new infections and adequate measures are being adopted by our health authorities and the Govt. to curb the growth. The high number of tests pan India has also contributed to the daily positive case count.
Among all the misery and the ongoing tough situation, the only glimmer of hope is that people are getting treated and people are recovering in huge numbers every day, thanks to the precautionary measures taken by the people, on-time testing and detection of the virus and process of isolation, making the treatment available in the hospitals for advance cases, though still a small percentage is getting admitted in hospitals.
The other silver lining in dark clouds is the wide choice of several health care policies now available in India after the IRDAI regulation and their mandate to cover more citizens under protective health programs to be relieved from the financial stress. However, the benefit of the upsurge in demand for health care policies (both life and non-life policies) providing Covid-19 cover can be reaped by both the Insurance companies and the insured.
In an interview published in a leading newspaper of India, the executive VP of TATA AIG health insurance company has mentioned that the growth of the health insurance sector is a ray of light towards the revival of the industry. It is now witnessed that the customers have finally understood the importance of health insurance after the unprecedented Covid-19 crisis. In the non-life insurance industry, the health insurance sector alone has a market share of 26 to 28%, and the sector is set for a fast track growth. Eying the growth graph TATA AIG health insurance company has decided to shift in-house the management of its health insurance indemnity claims which was outsourced prior, to third-party entities. The company is now on an expansion mode and planning to centralize its health management division in Hyderabad.
As the health insurance sector is set for a growth the average claim size has also witnessed growth because of the rising costs due to Covid-19. Disputes are also on the rise between the insuring companies and the hospitals due to an increase in costs, and a mechanism is being sought after by the industry including the insurance regulators and the council, to find a solution. The increase in costs of policies by the insurance providers might be one solution but it won’t help in the growth factor. If the policies are unaffordable people won’t be inclined to purchase, hence the coverage facilities and the cost should have the right balance considering the masses.
The non-life insurance sector has always been driven by motor vehicle insurance but due to the pandemic and the lockdown scenario, vehicular movement was restricted. This resulted in a slump in the rate of renewals of existing motor insurance policies and a drastic fall in the purchase of new policies due to the slump in the sale of new vehicles and the govt extending the tenure of the insurance period. The overall growth of the health insurance sector has been a boon for the industry revival. It is yet to see how far the rise of health insurance demand can fuel the growth and stabilize the slump in other sectors, it is very unlikely to see any significant recovery.