Written by Vaidyanathan Ramani
Recent outbreak of diseases like COVID-19 has led to more awareness among people towards insurance and a majority of them are now considering it as a necessity to be ready (at least for future) for such unforeseen situations. Before the outbreak of coronavirus pandemic in India, only 10 per cent of people were interested in buying insurance to cover healthcare emergencies including infectious and pandemic diseases, but now 71 per cent people consider health insurance as a necessity to fight unforeseen pandemics like COVID-19.
The insurance companies too have now started to create products for a world where such virus outbreaks could become the new normal after many businesses were left out in the cold during the COVID-19 crisis. While these new pandemic-proof policies might not be cheap, they offer businesses the chance to insure against disruptions and losses should another pandemic strike. Both existing providers, as well as new niche players, are targeting this opportunity by either adding this coverage to existing products or by creating something new to cater to such risks.
Corona specific health insurance products
In order to tackle the ongoing COVID crisis and to make sure that maximum people are covered under some kind of health insurance cover against COVID-19, on the directions of IRDAI, general and health insurers have started offering two standard products – the Corona Kavach – an indemnity based health plan and Corona Rakshak – a fixed benefit health insurance policy – for covering the treatment costs of COVID-19.
These Individual Health Policies are targeted to address the basic health insurance needs of the larger public for COVID-19 by offering a common set of policy wordings. Customers can either buy these policies through the insurer’s websites, online web aggregators or directly approach the branch offices or agents of the insurance companies. These policies can be bought for as low as Rs 100 – Rs 200 per month.
Since most companies have adopted work-from-home policy due to the ongoing COVID-19 pandemic, there has been a drastic nationwide reduction in the number of kilometres we drive. From mid-March through August first week, the total number of kilometres driven is down by more than 50 per cent countrywide.
Expecting this, usage-based motor insurance policies were introduced a few weeks ago and have been increasingly adopted. This new type of car insurance policy, launched by different insurers, allows car owners to insure their vehicles for kilometres they tend to drive instead of the average that everyone is supposed to drive for, in a full year.
This is hence very useful for those who see a reduced usage for their car this year and would like to avail discounts consequent to the lower usage. The insurers too see this as a win-win outcome as cars that are used less also tend to show a lower chance of a claim.
At a larger scale, the introduction of pay-as-you-use is probably a significant shift in the history of motor insurance in India as it seeks to become more responsive to the usage (and consequently) needs of the customers. The shift has been anchored by the uncertain times we live in when unnecessary journeys are being discouraged by the government and organizations & employees alike are discovering the benefits of working from home.
The ‘Pay as You Drive Model’ will undoubtedly enhance insurance penetration in the overall sector by bringing more and more vehicles under the insurance umbrella.
Insurance through telemedical
COVID-19 crises have underlined the role that technology can play in underwriting of both life and health insurance policies. Telemedicine has now emerged as a faster, safer and most secured way to clear issuance of insurance policies for the consumers in the current environment. No doubt, telemedical assessment is therefore increasingly becoming the norm and it will only become easier and more widely accepted in the coming years.
While taking health insurance policy through telemedical assessment, one will be required to make a declaration about their health condition on a call with a doctor appointed by the insurer who will ask simple questions regarding one’s health conditions as well as lifestyle habits. Under this method, one can buy a Health Insurance cover of up to Rs 1 crore.
On the other hand, under life insurance, under the telemedical setup, a cover of up to Rs 2 crore can now be bought. Customers are advised to provide appropriate and correct information to doctors over the phone so their families face no challenge during the claim settlement process. The telemedical process is completely regulated by the IRDAI and is reliable from the customer’s point of view.
Digital transformation in insurance sector
Over the last few months, digital technologies have been transforming the insurance industry globally. While the recent engagement of insurers on digital platforms through apps and social media has allowed them to reach and engage customers directly, a significant revolution has happened in the background through the adoption of e-KYC and cloud infrastructure that has enabled the insurers to service the customer like never before.
Today, insurers are giving utmost importance to the digitalisation of the core business processes. There is hence a large interest in advanced analytics, data and digital technologies that are promising to help the insurers serve as well as understand their customers better. Even as these changes were being spoken about a few months ago, the pandemic has ensured that they are already on their way to turning into reality and this means that the digital customer has only better choices to expect in the coming months.
The author is the Head of Product and Innovations at Policybazaar.com. Views expressed are that of the author.
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