Page 23 - Insurance Times December 2020

leading position with GDPI of Rs 69,208 crore and which and uninsured losses or economic losses. This term is
contributed 39.21% share in GDPI of Industry in FY20 lost generally remembered following a catastrophe to recollect
its top position to Health Insurance Segment when its share that properties and economies with low insurance
shrink to 32.28% of GDPI. penetration takes much longer time and require more
government support to recover after a natural disaster.
Covid-19, on the other hand increased awareness for health
insurance and contribution of health insurance in GDPI The challenge of under-penetration and protection gap is
increased from 27.67% in FY20 to 33.22 up to August 2020. equally relevant during this pandemic to realize that social
Retail Health Insurance registered a significant growth of and economic cost of being uninsured or underinsured is
32.88% in this period to achieve overall growth of 12.97% massive and serious pushing individuals to the vicious trap
in Health Insurance space. Thanks to newly launched Corona of poverty. Duration of illness for Covid positive patients is
specific health insurance products that contributed a lot for much longer and social distancing and isolation protocol
this impressive growth. For the first time seven Standalone raises the treatment cost exponent. The economic progress
Health Insurers (SAHI) prominently generated more health and hard earned savings of individuals over decades may get
insurance business than 24 general insurers. wiped out in meeting uninsured medical expenses out of
pocket.
While the demand for health insurance has picked up
considerably its utilization has also dropped drastically as The protection gap as reflected by the level of insurance
policyholders avoided elective treatments. Combined effect claims during this pandemic to actual number of corona
of both will provide ample opportunities to forward looking positive cases expose a serious cause of concern for us. In
insurers to make health vertical an'aatmanirbhar (self- FICCI conference, Member Non-Life shared vital information
sustaining) profitable vertical.' that while the number of COVID-19 positive cases in India
was more than 27.7 lacs, the insurance claims intimated up
Planned surgeries will eventually happen and claims costs to August 18, 2020 were only about 1.25 lacs. In other
could go up. The insurers should keep this factor in mind words 96% of the COVID-19 affected population was not
especially while rating tailor made products that may covered by commercial insurers.
produce decreased combined ratios for a shorter term. Year
2020 will also be remembered in time zone as a period when This reminds that health insurance penetration is still low in
Health Insurance occupied the position of top contributing India and those insured are also largely under-insured. This
segment in GDPI of General Insurance sector. Health number is proportional and reflect that about 4% of Indian
insurance seems amidst an exciting journey. population is covered by commercial insurers. Larger part
of covered population is through government health
Table- 1 insurance schemes. This protection gap is becoming more
INDIAN GENERAL INSURANCE MARKET pronounced with time when COVID-19 is spreading more to
- August 2020 Tier-2 and Tier-3 cities and even to villages as the
penetration of health insurance is so minimal to population
Motor Health Total residing in these locations.
August, 2020 22254 22903 68939
Trends of claim arising from novel COVID-19 has kept its
Segment share 32.28 33.22 100.00 upward momentum in past few months, however, the
March,2020 69208 51638 189302 protection gap has dipped by 1% in past few months after
Segment share 36.56 27.28 100.00 booster sale of COVID-specific health insurance products. A
March,2019 64523 45532 164559 Report suggests that as on 30th September 2020 3.18 lac
Segment share 39.21 27.67 100.00 Covid related claims amounting to Rs 4,880 crore were
intimated to the insurers.
(Source: GI Council segment wise data report)
On that date India had 62.25 lacs Covid positive cases and
Protection Gap between ailment and so the claimed ratio to ailment improves to 5% from 4% in
a month. If the population covered under Ayushman Bharat
claims: (PMJAY), CGHS & other schemes is included the percentage

The protection gap is a difference between insured losses of protection gap may improve slightly better but still there
The Insurance Times, December 2020