Page 24 - Insurance Times Janaury 2021

amid lockdowns with reduced economic activities and claim triggered during the grace period can be paid.
lesser plying of vehicles, leading to much lower (Source: IRDA Order, 16.04.2020)
frequency of accidents (Sigma 4/2020).
Y Insurers were advised to ensure claims related to
¢ Business-continuity insurance claims and commercial- COVID-19 be expeditiously settled
risk claims due to the economic slowdown are expected
Y Guidelines on Standard Health Insurance Policy called
to go up in India though effects may vary from small Arogya Sanjeevani Policy was issued by IRDA and
and medium sized business with larger business clearance to 29 Health and General Insurance
enterprises. companies were provided to market the above Health
¢ A spike in health insurance claims will likely follow, if the Insurance product which also includes COVID-19.
increasing trend of COVID-19 infection continues.
Y Mandatory health insurance coverage to workers to be
¢ With reduced movement and restrictions on large provided as part of the National Directives of
gatherings, travel insurance and some event Government of India dated 15.04.2020.
cancellation covers may be triggered though
Y IRDA allowed all the insurers to collect health insurance
pandemics are often excluded in such coverage. premiums in instalments as deemed appropriate for any
specific product(s) for ease of payment (IRDA directive
The ongoing COVID-19 crisis is not only affecting the demand dated 21.04.2020). The instalment facility in premium
side but is also reducing supply of insurance because insurers
may be offered either as a temporary relief for 12
are also seeing and expect more COVID-19 related claims
months or as a permanent feature in respect of all the
and are recording large mark to market losses from equities health insurance policies that are due for renewal upto
and alternative assets reducing the risk appetite of insurers.
31st March 2021, thereby relaxing the extant guidelines
Further, investment returns will remain under pressure with that mandate a gap of at least 12 months for minor
lower interest rates which is expected to be there for a modifications.
longer period.
Y IRDA on 10.07.2020 has designed a standard Covid
specific product addressing basic health insurance needs
To mitigate the above impacts, government and regulators
with common policy wordings and mandated general
are taking efforts to improve the sector and overcome the
challenges posed by the ongoing crisis. and health insurers to offer this policy called 'Corona
Kavach'.
4. Steps taken to mitigate the impact: Y To tackle the COVID-19 situation and to build a 'self-
reliant' India, Government of India in May 2020
Apart from revival of economic activities by way of phase wise
unlockdown commencing from 1st June 2020, the steps taken announced a special economic package as 'Atmanirbhar
package' amounting Rs 20,97,053 crores to give relief
by the Government and regulator have helped to improve
to the Indian economy. No specific announcements
the general insurance sector and enhance the confidence of
were made for the general insurance sector, however,
the policyholders, gist of which is provided below: it is widely accepted that general insurance sector is
Y Motor third party insurance policies that fell due for linked to the economic activities apart from health
renewal during the lockdown period commencing from
25th March 2020 to 3rd May 2020 and could not be insurance. As this package is to give an impetus to the
paid in view of COVID-19 were allowed timeline till 15th economic activities already affected by COVID-19, it is
May 2020 to ensure continuity of the statutory motor expected that economic recovery will lead to upliftment
vehicle third party insurance cover from the date on of general insurance sector.
which the policy fell due for renewal such that any claim The steps initiated and taken by the regulator/
during this grace period can be paid. (Source: IRDA government/ statutory body primarily consist during the
Order, 16.04.2020)
period of lockdown when the economic activities came to
Y Policyholders of Health insurance policies whose halt with numerous restrictions imposed on movement.
renewal fell due in the period from 25th March 2020 However, in the period of phase wise unlockdown which
upto 3rd May 2020 were allowed to make renewal commenced from 1st June 2020 resumption of business
payment on or before 15th May 2020 to ensure activities has taken place. The effect on GI sector can be
continuity of the health insurance cover from the date precisely inferred by the premium figures over the period
on which the policy fell due for renewal so that any valid from June to August 2020 (Table 2).

24 The Insurance Times, January 2021