After bringing out specialised insurance cover for the Covid-19 pandemic, the Insurance Regulatory and Development Authority of India (Irdai) is planning to come out with standardised insurance schemes for dwelling units and Covid-hit micro, small and medium enterprise (MSME) segment.
Irdai Chairman Subhash C Khuntia said two standard schemes are being worked out for MSMEs. One is for micro units and another one for small units. As of now, only 5 per cent of MSMEs are covered by insurance. India has 6.33 crore MSMEs, majority of which are micro-enterprises. “Another standard product is being worked out for dwelling units,” he said.
In India, only 0.9 per cent of the dwelling units are insured whereas in the US, it is around 90 per cent. People suffer huge economic losses when some catastrophe happens. This risk can be covered by insuring the property, as per the insurance regulator.
“Irdai is keen on a standard product for dwelling units as the same product will be sold by all the companies. It will become easier for policyholders to pick such products as they don’t have to go through voluminous policy documents to find out terms and conditions. Hopefully, more and more people will protect their homes,” Khuntia said at the CII Insurance and Pensions Summit.
According to Irdai data, insurance companies shelled out an average of Rs 96,621 per person on claims made by insured Covid-19 patients. Khuntia said that 2.38 lakh claims for coronavirus have been filed by the policyholders as of now. Of these, 1.48 lakh claims amounting to Rs 1,430 crore have been settled by the insurers.
The insurance watchdog had come out with standard health products called Arogya Sanjeevani and Covid-19 specific products — Corona Rakshak and Corona Kavach — two months ago. Under the Corona Kavach plan, around 28 lakh lives have been covered since its launch on July 10, 2020.
“We will consider extending the tenure for Covid policies from March 2021,” Khuntia said.
Irdai said standard products are launched by the regulator to further increase penetration of insurance in India, which is just 3.76 per cent of the gross domestic products (GDP) compared to the world average of around 7 per cent. The regulator is also looking to introduce risk-based solvency for insurance companies in the next three years and allow video-based KYC process. Irdai also wants insurers to improve the persistency ratio — or continuation of policies — for the 13th month and five years.