Page 27 - Insurance Times October 2020

part. Once three months elapse after business, overtaking the motor insurance segment. And it is estimated that by
the deadline for renewal, policyholder the year end, the health segment may be far ahead of the motor segment. The
will lose out completely on the NCB. awareness around having a health insurance policy during the times of COVID-
19 has done really well for the standalone health insurance sector. Standalone
Some insurers charge a higher health insurers, in August, saw their premiums growing by 36.5 percent which
premium for renewing expired policies. compares to an average growth of 23 percent seen in the first four months of
Also, when for a comprehensive policy FY21.
after expiry, insurers insist on
inspecting the vehicle. If the inspection The biggest gainer in premiums has been standalone health insurers, as they
reveals damages, the insurer will saw a 36.42 per cent rise in premiums during the period to Rs 1,462.92 crore,
exclude them from coverage. Insured against Rs 1,072.32 crore. Gross direct premium income underwritten by general
will then have to pay for those repairs and standalone health insurers grew by 10.44 per cent between April and July
out of his own pocket. Given the severe this year to Rs.18,415.5 crore even as the overall general insurance industry
impact of this pandemic on the lives expanded by 1.62 per cent in the period.
and livelihood, no one would want an
unwanted financial liability. Thus, it is The cost of taking adequate health insurance cover
advisable to have a valid
comprehensive motor insurance policy. Annual Premiums (Rs)*
Insurance Company 30-year-old 40-year-old 50-year-old 65-year-old
The premium rates for motor third-
party liability insurance for 2020-21 New India Assurance 7,600 8,062 13,349 35,113
remain unchanged from last year's rate National Insurance^ 9,072 10,189 14,764 44,698
till further order. The rates for the ICICI Lombard 7,801 10,021 15,112 38,738
ongoing fiscal could not be finalized
because of the Covid-19 and Bajaj Allanz 9,804 11,787 17,782 40,454
consequential lockdown. For motor Star Health 9,275 11,775 19,865 34,295
insurance, the number of claims has
come down to less than 5% of the *Premium rates (exclusive of GST) for a Rs 10 lakh cover
^ United India's health plan is currently unavaliable online
normal which led to some savings for Source : Insurers' websites
insurers. When the country was under
rigorous lockdown, motor segment Interest in health insurance has gone up for majority of the population. While
claims fell significantly.
the pandemic has made health insurance the largest premium segment in
general insurance, consumers prefer to buy comprehensive policies with higher
But, claims started moving up in the sum insured rather than just targeted covers. This is driven by the fact that
motor segment with lockdown being demand for health insurance has been on the rise due to the ongoing coronavirus
gradually eased. On the revenue side, (Covid-19) pandemic. Also, the regulator's drive to nudge insurers to sell
renewals have picked up. The own
damage claims are now 80-90 percent standardized health products has done the trick as there is huge demand for the
Corona Kavach and Corona Rakshak policies.
of what they used to be. And, average
claim size is increasing. So, the claims
outgo is more or less equal to what it These schemes were launched specifically to provide protection against the virus.
Insurers are capitalizing on the increased demand for health insurance policies
used to be. But revenue is falling. Next to compensate for the negative impact from other business. Health insurance
six months will be tough in terms of loss
ratios for the industry. premiums grew by 18% year-on-year in July 2020, as insurers revamped product
portfolio to meet consumer demand. Health indemnity policies have seen a sharp
rise in sales.
Health Insurance:
In fact, the health segment for general The sum insured has increased significantly to anywhere between Rs. 25 lakh
insurers has become the biggest line of and Rs. 1 crore as people have realized that the cost for Covid-19 treatment can
The Insurance Times, October 2020