Page 38 - The Insurance Times July 2020

with regard to Corona Virus? As an industry closely linked interim to prepare for it. Customer perception may be that
with the health of the population in general and our these firms are large organizations out for themselves, but
policyholders in particular, are we rising to the occasion now there are enormous risks to insurance businesses the scale
guiding the general public about this Virus? What is the part of which we have rarely seen before. Insurers and reinsurers
to be played by the Insurance Regulator- Insurance face huge exposure as major events are cancelled - Munich
Regulatory and Development Authority of India, in short the Re has exposure to the Olympic Games in the region of
IRDAI? In what way, the Government of India can intervene hundreds of millions of Euro to take one example.
in this matter to help the common public?
That would be a big hit for a firm of Munich Re's size, but
Let us look at these situations & The Role of the Government for smaller, specialist firms that specialize in event insurance
of India at this context. This subject has been taken up first and offer communicable disease cover, the ongoing
because Insurance is only one of the many numerous steps cancellation of events of all sizes could well see them fail. It
to be taken up by the Government to come to the rescue is almost certain in the Global Market that we will see
of the suffering public, especially the poor and the insurance businesses fail and quite possibly in significant
downtrodden. Findings are - numbers. We could also see the collapse of individual life and
1. The Government has announced to provide an Health health insurance companies - ratings agency Fitch has
Insurance of Rs 50 lacs per head for all Doctors, Nurses, already warned that life insurance companies could be
Health care workers, 'Safai Karmacharis', ward boys, particularly hard hit by the combination of falling stock
ASHA Workers, Para-medics, Technicians and Specialists markets and increasing mortality.
and all the Traffic Police personnel for a period of 3
months till June 2020, to be continued if required. Paying out on policies will be a huge hit to insurers, and for
Health care workers alone are 22 lakhs people in India. reinsurers when added to their other exposure. That could
2. All the above categories of persons are also covered by put them in serious jeopardy. Additionally, giant, global
Personal Accident Cover of Rs 50 lakhs for this period. businesses are failing, with airlines looking to be the earliest
casualties and hospitality chains likely to swiftly follow. Firms
3. There are 50 lakhs trucks in India but only 4 lac trucks
ply daily. These 4 lac drivers and cleaners will be of this size are more likely to have comprehensive cover, so
having to pay out on any policies that do include contagious
extended this Health Insurance of Rs 50 lakhs per head
for 3 months as a short term insurance cover by the disease cover will further add to the burden faced by the
Government and the Life Insurance Corporation of insurance industry.
India- LIC- and the modalities are being worked out. 19
deaths that took place among these truck drivers and Add to that the volumes of payouts on existing travel
cleaners have created a panic among this section of insurance policies being way out of expected bounds -
globally around £275 million is expected to be paid out in
population and hence this reassuring gesture from the
COVID19 related claims the majority of which will be for
Government.
cancellation cover - and the pandemic starts to look
4. The Income Tax Department has announced that incredibly serious for the insurance industry. And as if that
insurance premiums paid up to June 30, 2020 would be wasn't enough, the investments insurers rely on to give them
taken as paid on or before March 31 2020 and the funds to pay such claims are in freefall.
eligible IT Rebates would be given for the FY 2019-2020
in the Income Tax Assessments of people. Finally to sum up, it is almost certain that we will see
5. All Health Insurers have to cover the Corona Virus insurance businesses fail and quite possibly in significant
Pandemic claims including hospital treatments under numbers, if the proper coordination amongst the IRDAI,
the Ayushman Bharat, although this was not envisaged insurers, network hospitals and intermediaries for
at the inception of this Scheme. smoothening the COVID-19 claim settlements to meet the
significant needs of the country.
The impact on the insurance industry will be
unprecedented: Reference:
Despite a global pandemic being voted the biggest risk to Different contemporary regulations, discussions &
the industry in a poll of insurance executives in 2013, most information as collected and collated from various text
insurance companies seem to have taken little action in the materials available on-line & in hard copies. T

38 The Insurance Times, July 2020