Page 22 - Insurance Times September 2020

In August-September 2019, motor in- ket has grown from 27 per cent to 30 an even smaller proportion. But there
surers saw sharp growth following the per cent in a very short period, that is, will be dent in profitability in the sec-
roll out of the new Motor Vehicles Act, between March and July. ond half of the year," he added.
which made purchase and renewal of
Irdai is also looking at mainstreaming "The loss ratio is expected to be higher
auto insurance mandatory. They saw the dedicated Covid-19 policies such as by 8-10 percentage points for the full
huge boost to their motor portfolio last Corona Kavach, as the virus is showing year if Covid-19 claims keep multiply-
year and, therefore, the growth this
no signs of receding. ing at the current pace," said Bhaskar
year will not exceed that of last year," Nerurkar, head-health claims, Bajaj
said Chhabra. Alamelu said, mostly consumers have
opted to buy the policy for the nine- Allianz General Insurance.
anda-half-month period, indicating the Digestive system-related ailments con-
Digital health plan may cut
fact that policyholders think the virus stitute 15 per cent of health claims,
insurance cost will not go away quickly. infections make up for 13 per cent,
The National Digital Health Mission - Insurers face double potential health hazards are another
which aims to create digital health 13 per cent, and then there are other
profiles of citizens - will not only be a whammy from Covid, non- injuries and surgeries. In the initial
boon for policyholders but also prove Covid claims months of the pandemic, the fear of
to be equally beneficial for insurers in contracting the virus had resulted in
General insurers and standalone
better pricing of products. Chances are people deferring their planned surger-
health insurers are facing a double
that prices of health insurance prod- ies and hospital visits, resulting in gen-
ucts could come down, after the adop- whammy. With exponential rise in eral and health insurers receiving far
coronavirus-positive cases, reported
tion of the mission. lower claims. But that trend has re-
Covid claims have topped 200,000, versed. And, so has the trend for
In an address during Assocham's Na- worth over Rs 3,000 crore, and are set Covid-related claims. At the end of July
tional E-summit on Health Insurance, to rise further as cases explode. Fur- 31, insurers had received only 81,000
T L Alamelu, member non-life, Insur- thermore, non-Covid claims, which claims. But as of September 8, the re-
ance Regulatory and were muted in the initial months of the ported claims reached 193,000, indi-
Development Authority (Irdai), said, pandemic, have also picked up pace cating doubling of claims in just a
"The government has recently an- and are more or less at pre-Covid lev- month's time.
nounced the National Digital Health els.
"The absolute numbers look scary as
Mission and the insurers need to take Although insurers feel loss ratios in the far as claims from Covid and non-Covid
advantage of this. They must encour- health segment may get impacted, ailments are concerned. But insurers
age people to share health records on and profitability will take a hit, capital are also selling more health insurance
this platform." erosion will not take place, at least for policies now. So, business, too, has in-
Currently, the pricing of health insur- the large entities. creased. And Covid claims constitute
ance products is done mainly on past "Non-Covid health claims are more or only 10 per cent of total claims for in-
experiences. All actuarial calculations less reaching pre-Covid levels. The surers," said Amit Chhabra, business
are based on historical data. And, in- Covid-19 claims were unanticipated. head-health, PolicyBazaar.
surers do not always have all the data We have to see how the entire year The share of health insurance business
readily available while pricing prod- plays out. There was some benefit of in the Indian market has grown from
ucts. This often leads to higher loss discretionary claims not taking place in 27 per cent to 30 per cent in a very
ratios for insurers. the first three-four months of the pan- short period (between March and July).
Most insurers in the general insurance demic," said a chief executive officer And, public awareness on the need for
space are struggling to make under- of private sector general insurance health insurance has grown exponen-
writing profits, mainly due to pricing company. tially in the past few months. This has
issues. "At least for general insurers, capital resulted in the health insurance seg-

Alamelu also said that due to the on- will not be too much of an issue be- ment becoming the leading business
going pandemic, the share of health cause the proportion of health is 15-20 segment for non-life insurance compa-
insurance business in the Indian mar- per cent and retail health constitutes nies. T

18 The Insurance Times, September 2020