15th – 21st August 2020
INSUNEWS Issue No. 2020/33 Weekly e-Newsletter
QUOTE OF THE WEEK INSIDE THE ISSUE
Insurance Industry 2 “If patience is worth anything, it Insurance Regulation 7 must endure to the end of time. And Life Insurance 10 a living faith will last in the midst of General Insurance 15 the blackest storm.“ Health Insurance 24 Motor Insurance 52 Mahatma Gandhi Crop Insurance 60 Survey 62 Pension 63 IRDAI Circular 65 Global News 66
INSURANCE TERM FOR THE WEEK
Assignor
Definition: A party or entity who transfers the rights of the contract they hold to another party (assignee) is called the assignor.
Description: Assignor transfers the complete rights of ownership and benefits pertaining to the contract to the assignee. For instance, party A gives an absolute assignment to party B of an insurance policy of Rs 5 lakh. Here A becomes the assignor.
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INSURANCE INDUSTRY
How to avoid falling prey to mis-selling of insurance policies – Financial Express – 19th August 2020
With the spread of the pandemic, more and more people have started opting for insurance, mostly health and life insurance. In India, quite a large number of insurance products are sold through brokers and agents. Even though some brokers and insurance agents may be well- intentioned, most are seen making fake promises to policyholders to get their way.
Mostly, buyers with limited knowledge about insurance products, look up to these agents hoping to get help while choosing policies that are suitable for their needs and lifestyle. However, it’s often seen that some rogue agents take advantage of such buyers and misrepresent facts or even give a distorted picture of the features of the policy while selling an insurance policy. Hence, experts suggest buyers should be aware of such agents and the ways in which insurance can be mis-sold to them while buying a policy.
Even without being misled by agents, there are ways through which policyholders have been misled and mis-sold insurance policies. Hence, policyholders should always ask questions, carefully read the proposal and final documents of the policy, and beware of fake promises made before signing off.
Here are some of the common ways of mis-selling policies to customers: It’s a red sigh if the policy benefits are not explained clearly to you. Agents have to explain the policy benefits and features accurately to the buyer. Hence, if you are still unclear about them, and the agent has not explained to you the policy features and benefits properly, and refuses to explain further, know that there is something wrong. Keep in mind that you will be paying the premium for getting benefits, which should be explained in advance.
There are agents who exaggerate, distort, and also state false promises to make their policy show attractive rates of returns to the buyer. Hence, experts say customers be aware of such fake promises.
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Some brokers and insurance agents promise that insurance plans give better returns than bank fixed deposits and some other investment avenues. If you’re told similar things, then know that it may not be true. Industry experts say promising insurance plans giving better returns than bank FDs is one of the most common ways of selling insurance. Hence, do not fall for statements like – an insurance policy is a safer option and gives better returns than an FD. Also, keep in mind that insurance policies and savings/investments are entirely different instruments. They should not be mixed or compared.
Another point where many buyers are mis-sold policies is premium payment. Agents not only exaggerate the benefits of the policy but also give misleading information on premiums. While buying a policy, commit to a premium amount that will be easily payable by you. Till the time a policyholder pays their premiums on time and for the full term of the policy, any insurer is liable to honor its side of promises made in the product. But if the policyholder has not paid the premium for the full term, the claim process changes. The insurers could also charge additional charges.
The claim procedure has mostly to do with the health and accident insurance policies. Policyholders need to know from their agents while buying a policy, exactly under what all circumstances can the policyholder make a claim, what type of claim is payable, and what is not. While mis-selling agents give the impression to the policyholders that anything and everything is covered under an insurance policy, which is not true. All insurance policies have exceptions. Hence, it is better to find out under what circumstances or conditions will the claim not be payable.
(The writer is Priyadarshini Maji.) TOP Source
Centre allows 24 insurance companies to sell policy through Aadhaar - Zee News – 19th August 2020
The government on Wednesday (August 19) allowed 24 insurance companies to sell their policy after collecting Aadhaar card details of the buyers. The move is understood to aim at checking the laundering of funds into insurance firms and shell companies.
The decision is likely to help these insurance companies to perform in real-time and do e- KYC. This would also reduce the cost of transaction.
According to the notification, "In exercise of the powers conferred by sub-section (1) of section 11A of the Prevention of Money- laundering Act, 2002 (15 of 2003), the Central government on being satisfied that the reporting entities mentioned in the Table below comply with standards of privacy and security under the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act 2016 (18 of 2016) and it is necessary and expedient to do so, and after consultation with the Unique Identification Authority of India established under sub-section (1) of section 11 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016."
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"The Insurance Regulatory and Development Authority of India hereby notifies the reporting entities specified in the Table below to undertake Aadhaar authentication service of the Unique Identification Authority of India under section 11A of the Prevention of Money-laundering Act, 2002," the notification added.
The Insurance firms allowed to sell policy are: 1.Aditya Birla Health Insurance Co. Limited 2. Aviva Life Insurance Co. India Limited 3. Bajaj Allianz General Insurance Company Limited 4. Bharti AXA General Insurance Company Limited 5. Cholamandalam MS General Insurance Co Ltd 6. TATA AIA Life Insurance Co Ltd 7. TATA AIG General Insurance Company Limited 8. United India Insurance Co Limited 9. Universal Sompo General Insurance Co Ltd 10. LIC of India 11. Magma HDI General Insurance Company Limited 12. Max Bupa Health Insurance Company Limited 13. National Insurance Company Limited 14. Navi General Insurance Limited (Formerly known as DHFL General Insurance Limited) 15. Raheja QBE General Insurance Company Limited 16. Reliance General Insurance Company Limited (RGICL) 17. Shriram General Insurance Company Limited 18. Star Health and Allied Insurance Co Ltd. 19. Edelweiss General Insurance Company Limited 20. Go Digit General Insurance Limited 21. ICICI LOMBARD General Insurance Company Limited 22. IFFCO TOKIO General Insurance Company Limited 23. Liberty General Insurance Limited 24. Oriental Insurance Company Ltd TOP Source
Insurers set to offer transit cover for Covid-19 vaccine - Financial Chronicle – 17th August 2020
With more than 170 Covid19 vaccine candidates in the works globally, insurers and reinsurers are looking to offer transit cover for the vaccines to be transported from one country to other parts of the world. Insurance companies, which aim to provide comprehensive risk mitigation services to support the development, manufacturing and distribution of Covid- 19 vaccines, are likely to start writing business from October 1.
Lloyd's, the world's specialist insurance and reinsurance leader, recently announced the creation and in-principle approval of its programme, Syndicate 1796, set up to insure the storage and transportation of Covid vaccines to the emerging economies.
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Indian insurers are also keen to tap the evolving market for transportation of vaccines. Sanjay Datta, chief-underwriting and claims, ICICI Lombard, said, "We are already providing marine cover for transportation of pharmaceutical products. However, when it comes to providing the end-to-end cover for transportation of Covid-19 vaccines, we are watching the ongoing developments in this regard. Accordingly, we will decide about the launch of such a product, as the government is making special arrangements for its transportation right from the laboratories to the end-consumers."
Syndicate 1796 is developed by insurance technology firm Parsyl in tie-up with various partners, including vaccine alliance Gavi. The Syndicate forms the foundation of the new global health risk facility (GHRF) at Lloyd's. The GHRF will offer All Risk' cargo coverage for transit and storage risks on all global health products related to Covid-19 and any other infectious disease control programmes. The creation of a public-private syndicate to address a global health emergency is the first in Lloyd's history.
It is expected that those eligible for coverage will include manufacturers, procurement agents, logistics companies, ministries of health and other public agencies. "This unique partnership is a real demonstration of the value and ingenuity the Lloyd's market can bring to help address a global health emergency," said John Neal, CEO, Lloyd's.
(The writer is Madhusudan Sahoo.) TOP Source
Mumbai’s share in Covid cover claims in maharashtra falls to 33 percent – The Times of India – 16th August 2020
Insurers say there are “early indications” that Mumbai may have reached its Covid-19 saturation point as more insurance claims are now coming in from Tier-2 and Tier-3 cities of Maharashtra. In the first week of May, Mumbai accounted for 72 percent or 559 of the total 778 claims made in Maharashtra. Now, in August, the city’s share has dropped to 33 percent of the over 43,000 claims.
Fresh “claim hotspots” include cities such as Nasik, Solapur and Aurangabad, though their numbers do not seem alarming in comparison to Mumbai, Pune or Thane, say insurers. “In the months of March, April and May, we were seeing claims in metros and large cities. By mid-June, the trend shifted to smaller towns. There is also a difference in the intensity now among metros and non-metros. In Mumbai, mildly symptomatic or asymptomatic patients are sent back for home quarantine. City hospitals are only admitting patients with comorbidities requiring intensive care; so in Tier-2 cities, we are seeing cases of lower intensity,” said Bhaskar Nerukar, head of health and travel, Bajaj Allianz Insurance Co.
Another trend is as hospital rates are higher in metros and admitted cases often more serious, insurance claim size is higher. “In Mumbai, the average claim size is Rs 1.3 lakh whereas in Nasik it is Rs 61,000 and Aurangabad Rs 65,000. We’re also surprisingly seeing maximum cases in the 30-45 age group. This could also be as this age group is most likely to be insured (being professionals),” said Nerukar.
Insurers, though, warn claim numbers may not reflect the incidence of Covid-19 in rural areas. “The actual number of Covid-19 case could be higher. But insurance penetration is lower in rural areas; agriculture gives people bursts of income, not a steady flow. And it is those who have a steady income
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and monthly salaries that mostly take insurance,” said M N Sharma, head, General Insurance Council. Another surprising data point is 72 percent of the claims filed are from male patients and 28 percent female, which could again point to insurance gap rather than a reflection of ground realities.
National Health Authority said earlier, it did not see many claims under Ayushman Bharat, the government scheme with up to Rs 5 lakh sum insured. Now, with Tier-3 cities and rural areas too reporting cases, as many as 30,925 claims are filed under the scheme.
(The writer is Rachel Chitra.)
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Free-look period in insurance – How does it benefit you? - The Financial Express – 14th August 2020
Insurance has always been a necessity, but now people are opting for it more due to the pandemic and health crisis. If you are planning to buy an insurance policy, or have bought a new policy recently, it is always advised to understand the policy properly and go through the terms and conditions.
After buying a policy if you find the policy document and its terms and conditions are not according to your liking you can return it and get a refund out of it. If a policyholder doesn’t like their policy after buying it, IRDAI has made a provision wherein the policy can be returned, termed as the ‘Free look period’ in Insurance.
The Insurance regulator’s consumer-friendly provision of the free-look period is only applicable under certain conditions. To start with, know that not all insurance policies come with this free-look period option. Only Life insurance policies and certain categories of health insurance policies offer this free-look period. For instance, in the case of health insurance policies, health plans that come with a term of at least 3 years offer this facility. Other than that, the health insurer does not generally offer the provision of the Free-Look period.
How to avail of the Free-look period? The regulatory guidelines have prescribed the process to avail the option of a free look period, making it a transparent and standard process. For instance, policyholders can use this facility within 15 days of receiving the policy document, if the policy is bought offline. For policies that are bought online, then the free-look period increases and is for 30 days of receiving the policy document.
If a policyholder doesn’t like a policy, the/she needs to inform the company by writing to them, the communication cannot be oral. Experts say at times just informing the insurance intermediary also might not be enough and the free-look window could close by the time the company gets to know. Hence, it is better to communicate with the company in writing.
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To get your refund from the insurance company, firstly see if your policy falls under the applicable category. Then after letting your insurance company know your intent to use the provision of a free-look period in the prescribed process, you will be eligible to get the refund of premium paid by you.
Note that all the premium paid might not be refundable. The premium refund is usually adjusted for proportionate risk premium for the period on cover, as per the regulatory guidelines. For instance, in the case of ULIP’s the refund is usually based on the NAV. Additionally, insurance companies could also deduct the expenses incurred, if any on medical examination, along with stamp duty charges.
Hence, experts suggest proper due diligence of a policy and its features should be done before buying a policy.
(The writer is Priyadarshini Maji.) TOP Source
INSURANCE REGULATION
IRDAI asks insurers to come up with disease-specific plans - The Economic Times – 20th August 2020
India’s insurance regulator has asked the health insurance companies to come up with disease- specific policies to cover a larger section of the population instead of focussing only on healthy individuals.
Addressing a virtual health insurance conference organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) on Wednesday, the Insurance Regulatory and Development Authority (IRDA) member, non-life, TL Alamelu, also stressed on the need to set up a mechanism where the person with insurance policy gets benefits even at the diagnostic centre and pharmacy.
Stressing on the need for more awareness on the health insurance, she said, “It is better to have minimal health insurance with all the exclusions, than a situation of no health insurance.” According to her, the current growth witnessed in the health insurance sector was on a fast forward stage.
The IRDA member predicted that the health insurance segment in the non-life insurance sector in India may overtake the motor insurance segment by the yearend. Appreciating the health insurance companies for ensuing low number of grievances relating to Covid-19 policies, Alamelu said it helps gain the customers’ trust and advised the health insurance companies to extend such low grievances mechanism to all other types of health insurance policies.
Mayank Bathwal, co-chair, FICCI Health Insurance Committee, and also the chief executive of Aditya Birla Health Insurance, favoured enhancing the scope of health insurance benefits to cover the outpatient department (OPD) expenses. According to him, OPD expenses account for more than 60% of healthcare spend and important for driving preventive care, which are still largely not covered under the insurance policies.
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We're hoping growth in insurance will pick up by Q2-end: Irdai Chairman - Business Standard – 19th August 2020
The covid-19 pandemic has brought about major changes in the Indian insurance space. The society at large has woken up to the need of insurance protection against the uncertainties arising out of the pandemic. Insurers are resorting to standard products, adopting more digital ways to sell their products amid the pandemic, which may very well turn out to be an inflexion point as far as bridging the protection gap is concerned. In an interview, IRDAI Chairman, Subhash Chandra Khuntia, spoke about the positive response to Corona Kavach policy, standardisation of covid treatment rates, need for a retrenchment cover, and how the regulator is nudging more and more insurers to go for listing. Edited excerpts:
Both the life insurance sector and the non-life insurance sector have seen drop in business. When do you see growth returning in the insurance sector? There was drop in business in the second half of March 2020 due to lock-down which affected face-to- face contact and disrupted the normal functioning of the insurers and their distribution channels. The trend continued in April, but in the meanwhile, insurers adapted themselves to remote working. Irdai has asked all insurers to prepare business continuity plans and rework their strategies. The result has been favourable. There is steady improvement on a month-to-month basis, with rate of de-growth of life premium reducing to 2.2 percent till July. There is already positive growth in the non-life sector till July at 1.6 percent. What is very heartening is that during the month of July, 2020, the growth rates of life and non-life segments have been excellent at 18.9 percent and 18.4 percent as compared to the same month of the previous year. We are hopeful that the growth rates would pick up significantly by the end of the second quarter. The stimulus package announced by GoI for improvement of growth rate of the economy should further hasten the process.
Has the Irdai received any communication from the RBI regarding a capping on how much stake a promoter bank can hold in an insurance company? We have not received any such communication from RBI. However, there is merit in banks being promoters of insurance companies for long-term sustainable growth of the financial sector.
(The writer is Subrata Panda.) TOP Source
Irdai's committee bats for a new non-profit company to minimize insurance losses - The Economic Times – 18th August 2020
A working group constituted by the insurance regulator has recommended the setting up of a non-profit company to reduce insurance losses arising from property and motor related liabilities for the industry.
The ten-member committee headed by Irdai member T L Alamelu has recommended the regulator and industry participants to join hands in establishing this company.
The committee which has representations from the regulators, insurers, experts and brokers was constituted in December of 2019 to study various risks and losses suffered by companies insuring property and motor related losses.
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“The Company should liaise with Government and other relevant agencies to achieve its objectives” of minimizing losses and promoting safety, the committee report released on Tuesday said.
Irdai has asked industry stakeholders for suggestions on the recommendation before taking action on it, it said in a press release.
The proposed company could be mandated to capture experience and knowledge to capture various risk elements that contribute to insurance risks especially arising out of natural disasters, shipments, road mishaps among others.
“The Company may also set standards and benchmarks for various activities from the insurance perspective,” as per the report. However, the company cannot directly get involved in commercial activities such as risk inspection and management.
The committee has also suggested that the proposed company could subsequently also expand to the areas of health and general insurance as well, with a broader perception once the full-term effects of the pandemic also plays out.
“The Company should collaborate with bodies such as Insurance Information Bureau of India as well as with various academic institutions, bodies dealing with insurance education and build synergies,” as per the recommendation report.’
(The writer is Ashwin Manikandan.) TOP Source
Keep it simple, compete on settling claims: IRDAI to insurers - The Economic Times – 15th August 2020
Citing the 4.5 lakh lives covered under the stardardised insurance policy like Corona Kavach within 20 days of its launch, simple and standardised health insurance products will grow the health insurance segment, said Subhash Chandra Khuntia, Chairman, Insurance Regulatory and Development Authority of India (IRDAI).
Khuntia also urged insurers to come out with disease specific insurance products that will enable creation of an eco-system for improving the health of policy holders.
He was speaking at the virtual seminar 'India Health Insurance - Fast Forward' organised by Confederation Indian Industry-Southern Region.
Khuntia said the Corona Kavach policy will create awareness amongst the people about health insurance and insurers will be able to market the products easily. He urged the insurers to sell standardised health insurance covers as it will increase insurance spread and penetration while competition will be in the effective settlement of claims.
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There will be less disputes in the settlement of claims owing to standardised policy conditions. A high percentage of disputes between insurers and policy holders relate to claims settlement. According to him, the Covid-19 pandemic will make health insurance a pull product (bought by people) than a push product (sold by insurers).
He said more than 70,000 Covid-19 claims have been settled with a payout of about Rs 700 crore by the insurers ever since the pandemic broke out. Pointing out four per cent of the Indian households spend over 25 per cent of their income on healthcare, Khuntia said the monthly healthcare expenses of a household can be brought down with proper insurance coverage.
The out-patient expenses should also come under the insurance policy ambit. He said last fiscal the health insurance premium was Rs 57,680 crore logging a growth of 11.3 per cent and now this is expected to grow further.
During the first quarter of the current fiscal the health insurance sector grew by 6.6 per cent. A total of 47 crore lives have been covered under some insurance scheme in the country and every year about 1.6 crore health insurance claims have been settled last fiscal, he said.
Expressing concern at the medical inflation which is higher than the general inflation Khuntia said the entire healthcare eco-system should focus on bringing efficiency in the treatment protocol.
Khuntia also urged hospitals to get themselves registered in the specialised portal as it is important that they disclose the details of facilities they have and offer so that a cashless treatment facility is provided to the policy holders. TOP Source
LIFE INSURANCE
New Trends Emerge In Life Insurance Industry – Businessworld – 20th August 2020
The life insurance industry has undergone several changes in its regulatory framework which has impacted the business sector and its engagement with its customers.
As per a report of the India Brand Equity Foundation, the insurance industry is expected to reach US$280 billion by 2020.
Due to the Covid-19 pandemic, the life insurance industry has become more technologically advanced and customer- oriented with better operational performance and efficiency.
Cover for COVID-19 pandemic: The novel coronavirus outbreak in 2020 has led life insurance companies to provide prevention against such other diseases caused by viruses. Though the customer’s point of view has changed, insurance industries are pushed to re-imagine their product strategies during this pandemic. Insurance companies worldwide are offering various life-insurance policies and Covid-19 specific policies to ensure financial stability as well as health assistance.
Customer Segment Health and Wellness Initiative: The insurance industry at its emerging state used to offer an overall approach (general approach) to policies, but as we move forward, customers are provided with advanced customized solutions for their
10 current needs. Hence life insurance has made customer-specific plans which focus on the health and wellness of the customer and are flexible. It is one of the remarkable trends in 2020. By taking the initiative for the customer’s health and wellness, life insurers are open to broad market opportunities and an enhanced customer relationship.
Technological progress in the Industry: As we are aware of how digitalization has impacted the different sectors worldwide in 2020, life insurance is also one of the industries that have yet to enfold full benefits of it. It has also created a more natural way to provide access to modified technology-based quick customer service and a new range of customers from remote locations. Digitalization has increased operational efficiency along with extensive distribution channels and customer engagement. Customers can also get a quick diagnosis along with the treatment in a small-sized mobile phone. Modern technologies like Augmented Reality (AR) and block- chain are also set to be used by insurers to give customers a more rational approach. This will make it possible for policyholders to ask insurance and medical questions without human assistance, making the process more accurate, cost-effective, and faster.
Development in the Customer Claim Settling: Along with technological progress, the insurance industry is also focused on solving customer-oriented issues. Claims can be raised more swiftly in a shorter-time with online portal access to the customer.
Growing Benefits with Multiple Options: In 2020 the Covid-19 pandemic has led various insurance industries to come up with embracing proposals and offers that have not been explored before. Accordingly, it has given rise to advanced and modified trends to suit the customer’s requirements. This has resulted in different kinds of policies with additional benefits.
Insurance being a significant investment and beneficial during a climacteric period like the Covid-19, the insurance industry has taken up strategic attempts by developing alternative products to manage the unforeseeable market environment. Other factors like the emerging middle class and young population along with protection against the unpredictable future and retirement planning have supported the development of the Indian life insurance industry.
(The writer is Rishita Aditya.) TOP Source
When does it make sense to revive a life insurance policy? – Live Mint – 19th August 2020
India’s largest life insurance company, Life Insurance Corp. of India (LIC), last week rolled out a campaign for policyholders to revive their lapsed policies with an aim to encourage the continuation of risk covers in the current high-risk environment. Other than launching special campaigns, insurers typically allow policyholders to revive their policies up to two years (longer in case of some products) from the date of non-payment of the last premium. Disha Sanghvi asked experts when it really makes sense for policyholders to revive a lapsed insurance policy.
Best to renew contract during a campaign by the insurer Having a life cover, especially in these times, is inevitable. Any individual who has financial dependants and liabilities must always remain covered. Financial protection is put at risk if the cover lapses. It is prudent for an individual to check if her policy is active and should consider reviving the same if it has
11 lapsed. A company usually allows revival of a policy during the reinstatement period (two-five years), retaining the financial benefits. It is best to revive a policy during a revival campaign organized by the company, to save on the penalty charges or medical check-ups.
In case you plan to purchase a new cover, weigh the premium difference when compared with reviving the old policy. Buying a new cover usually costs more due to the change in the age and health conditions. Revival of a lapsed policy normally happens at the earlier premium and the bonuses accrued during the policy term get restored. In such scenarios, revival of lapsed policies always makes sense to ensure continued protection.
Revive it if you have paid premiums for several years In case of a long-term endowment policy, if premiums have been paid for several years, it makes sense to revive a lapsed policy. After revival, one should keep the policy active by paying regular premiums till maturity. This will help accrue maturity benefits, which can increase the overall investment returns.
In the absence of revival, only the surrender value is due to the policyholder. Surrender value is a fraction of the premium paid. This leads to erosion of capital. Product guidelines specify the minimum surrender value as a proportion of premiums paid and this proportion rises with the number of years you have been in the policy. If several years of premiums have been paid, then it makes sense to pay premiums for a few more years and protect the capital.
Insurers often run campaigns for revival of lapsed policies. In such campaigns, they waive penalties on lapsed policies. So, this can be an effective opportunity for revival. Insurers may still ask for a declaration of good health before approving revival.
Continuing a policy is better than buying a new one We actively encourage our customers to keep their policies in force to protect their families in case of any eventuality. At times policies lapse due to unpaid premiums. A lapsed policy can be reinstated only during the revival period and this period is not available indefinitely.
The revival period for each policy is as per the time defined by the regulator depending on the type of product, which is anywhere between two and five years. Unlike the grace period, during which the protection cover continues, during revival period, there is no protection and in case of an eventuality, claims are not admissible. Another aspect to know is that the longer the policy has been in a lapsed state, the more tedious is the revival process and higher the late fee.
Depending on the product, and longer the lapse period, the life insured might be asked to undergo fresh medical tests. However, since insurance premiums increase with age, it’s advisable to revive the lapsed policy as opposed to buying a new one, which can cost more.
Check if the old plan covers pre-existing conditions The objective of life insurance is to replace the economic value of the earning member. A lapsed policy means that the sum assured has dropped. If it needs to be restored, do it immediately. See if there is a new, cheaper option, and also evaluate if a pre-existing condition can be covered in the older policy. Term policy rates are fixed for the entire tenure. As age increases, the premium for a new policy also rises. In such a case, reviving a lapsed policy would be advantageous.
In a traditional plan (endowment), a lapsed policy, typically, acquires a surrender value after two-three annual premiums are paid. While no further premiums are payable, no future bonuses are added; and the maturity proceeds are only paid at the original maturity date—again a loss.
Finally, unit-linked plans work best if you invest for longer tenures. If you have a premium gap once the initial five-year period is over, it is best to withdraw the funds (there are no penalties for withdrawal), reinvest them elsewhere and let the policy lapse. (The writer is Disha Sanghvi.) TOP Source
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Charges you must know before investing in Ulips – Live Mint – 18th August 2020
The covid-19 pandemic has played a big role in helping people realize the importance of insurance, especially term and health insurance. Ever since the nationwide lockdown was announced in March, most insurers saw a spike in demand for pure protection policies while the sale of investment- linked products remained stagnant or saw a drop.
However, with the economy gradually opening up, some insurers are seeing a revival in demand for unit-linked insurance plans (Ulips). "We are observing that the product mix, which was skewed towards non-par, including protection, is now settling down. Beginning Q2, we are experiencing the trend move towards pre-covid times wherein the mix was equally spread between Ulips, non-par products and participating products," said Rushabh Gandhi, deputy CEO, IndiaFirst Life Insurance Co Ltd.
Financial planners don’t recommend mixing your insurance and investment needs because of the lack of transparency and the various charges that you may end up bearing.
“We are usually lured by the guarantee aspect and the idea that we will get something back while our life also is covered. Some people also fall for the fact that the maturity amount will be tax-free. These biases are what hamper our investment portfolios. However, if you separate the two needs (insurance and investment), you will end up getting a better return on our money. You will also be able to manage your goals better because you will be able to understand what is performing and what isn’t," said Shweta Jain, CEO and founder, Investography, a financial planning firm.
But if you do plan to invest in Ulips, here are some charges you must know before taking the plunge.
Premium allocation charges (PAC): This amount is a fixed percentage of the premium charged by the insurance company before buying units under the name of the policyholder. It pays for expenses such as agent commission, medical tests (if any) and other underwriting processes. The PAC may vary from company to company. For example, if the PAC on your policy is 15% and your premium is ₹60,000, then ₹9,000 will be deducted from the investment towards PAC and the remaining ₹51,000 will be used to invest.
Fund management charges (FMC): This amount is charged for managing the fund and is levied as a percentage of the fund value. “Though the charges differ from fund to fund, 1.35% is the maximum charge per annum according to Irdai guidelines," said Naval Goel, founder and CEO, PolicyX. These charges are usually drawn before calculating the net asset value of the fund.
Mortality charges: This fee is charged towards providing you with the life cover. The insurer typically takes your age and health conditions into account while calculating these charges. Goel said these expenses are deducted on a monthly basis from the fund value. Insurers use their mortality table to levy these charges.
Administration charges: The insurer deduces these charges every month for the administration and maintenance of your policy. “The charges might change at a pre-defined rate or remain constant throughout the policy tenure. The deduction is done by cancelling the units proportionately from the selected funds," said Rakesh Goyal, director, Probus Insurance, an insurtech broking company.
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Fund switching and partial withdrawal charges: An investor is allowed a fixed number of free switches between different fund options every year. Switching charges are the charges an insured has to bear if she has exceeded the fixed number of free switches between different fund options.
These charges range from ₹100-500 per switch and differ from insurer to insurer, said Goyal. Note that partial withdrawal is allowed only after completion of five policy years and if all due premiums are paid on time and the policy is still in force. “Insured is allowed to withdraw three times from the fund value with a cap of 25% of the fund value. This is subject to some pre-specified conditions," said Goyal.
Discontinuance of premium charges: You will have to bear these charges if you discontinue the policy before maturity. On discontinuation, your money will get locked in a discontinuance policy fund after deducting these charges and will be paid only after you complete five years. This is charged as a percentage of the fund value or as a percentage of the premium. The insurance regulator has laid down guidelines on how much can be charged as discontinuance charges. For a policy with an annual premium more than ₹25,000, the maximum discontinuance charge cannot exceed ₹6,000 in the first year.
Other than the charges mentioned above, depending on the insurance company and the product, you may also have to bear a few other charges, especially if you opt for riders. “Returns from Ulips are linked to the capital markets, be it equity or debt. The life cover in most of these policies is too less and hence defeats the purpose of pure life insurance," said Goel.
For a popular Ulip product in the market, the premium allocation charge is 8% in the first year, 5.5% in the next two years, 3.5% in the next five years and thereafter 3%.
"If you are paying an annual premium of ₹1 lakh in this policy, you are losing ₹8000 in the first year itself. In a 25 years policy, you will lose ₹92,500 towards premium allocation charges. From the sixth year, there is a policy administration charge of ₹150 per month. In this policy, you will lose ₹36,000 towards policy administration charges. Then there’s mortality charges, which is decided according to your age. While premium allocation charge is deducted upfront from your premium, other charges are deducted by way of cancellation of units from your account. Considering all these charges, your actual return from this policy can be lower than the fund performance," said Melvin Joseph, founder, Finvin Financial Planners.
(The writer is Disha Sanghvi.) TOP Source
Financial transactions such as hotel bills, life, health insurance proposed to come under tax lens - The Economic Times – 15th August 2020
The income tax department proposes to keep a watch on transactions such as hotel bills exceeding Rs 20,000, education fees of more than Rs 1 lakh as well as the purchase of jewelry, white goods, marble or paintings above Rs 1 lakh among others, looking to widen the tax base and plug tax evasion.
The government handle mygov.in tweeted this on Thursday night, but the tweet was deleted without giving any explanation. An income tax department official said Friday that while such a move hadn’t been notified, all of these transactions could come under scrutiny going forward. Based on the tweet, the department also proposes to expand the list of reportable transactions to include domestic business class air travel, foreign travel, cash deposits of Rs 10 lakh or more in a
14 noncurrent account, sale of foreign exchange above Rs 10 lakh, payment of property tax above Rs 20,000 per year, life insurance premium above Rs 50,000 and health insurance premium above Rs 20,000.
Details of transactions captured by the department are communicated to the taxpayer via form 26AS. To bring all these transactions under the tax scanner will require the amendment of rules and sections of the Income Tax Act, officials said. Prime Minister Narendra Modi had asked people to pay their fair share of taxes, given that India’s tax base was relatively small.
“Only 1.5 crore people pay taxes in a country of 130 crores,” he pointed out on Thursday, while launching a taxpayer’s charter and faceless assessment. “Introspect and come forward to pay the taxes due.” To be sure, some of the transactions cited are already reported by taxpayers in annual returns. Others related to share transactions, demat accounts, bank lockers, deposits in current accounts above `50 lakh and deposits in noncurrent accounts above Rs 25 lakh are already captured by companies or financial institutions and reported to the income tax department under Rule 114-E, experts said.
Certain provisions of Section 139 would have to be amended to include the compulsory filing of returns in the case of persons making bank transactions above Rs 30 lakh, all professionals and businesses having a turnover above Rs 50 lakh and rental income of more than Rs 40,000. By including these transactions in the list of those that need to be reported by companies, financial institutions and other entities as well as individual taxpayers, the authorities will be able to better identify those who may be making large purchases but not paying the right amount of tax, experts said.
“The proposed expansion would result in better monitoring of transactions and consequently expansion of the tax base,” said Amit Maheshwari, tax partner at AKM Global. The gathering of greater amounts of data will result in increased profiling of existing and potential taxpayers through the use of artificial intelligence and machine learning to mine this vast trove of information, experts added.
“With these reporting requirements, more persons would come forward to file their tax returns or tax authorities may seek reasons for not filing the tax returns basis financial transactions,” said Shailesh Kumar, partner at Nangia & Co LLP.
(The writer is Gulveen Aulakh.) TOP Source
GENERAL INSURANCE
General Insurance: Premium growth up 7% in July; retail health leads – Financial Express – 21st August 2020
General insurers reported 7% year-on-year (y-o-y) growth in premiums (excluding crop) in July 2020, almost similar to 8% growth in June. July growth was led by 33% y-o-y growth in fire and robust 18% y- o-y growth in health, although offset by 6% y-o-y decline in motor premiums. Retail health was up 48% y-o-y.
Motor remains weak Motor premiums declined 6% y-o-y in July 2020 versus 1% growth in June. Lower new vehicle sales (4- wheelers down 5% y-o-y and 2-wheelers down 15% y-o-y) continue to drag overall premiums. In third-
15 party business (total premium down 8% versus 4% growth in June), private players’ premiums were down 6% y-o-y while public sector insurers (PSUs) were down 11% y-o-y. In the motor own damage segment (premium down 3% in July and June), PSUs were down 10% y-o-y while private players were flat.
The overall muted environment for new auto sales continues to put pressure on motor premiums.
Go Digit, SBI and ICICI Lombard fare better than the rest. Among key players, new-age player Go Digit reported strong 18% y-o-y growth. SBI reported stellar 55% y-o-y growth in motor led by 1.1X y-o-y jump in third-party; the company reported better than industry growth for the third consecutive month in a row.
Strong traction in retail health Overall growth in the health business was robust at 18% y-o-y (10% y-o-y in 4MFY21). Even as growth in retail health was strong at 48% y-o-y and group health at 25%, 63% y-o-y decline in government health premiums was a drag. Standalone health insurers reported 45% y-o-y increase in health premiums led by 69% y-o-y increase in the retail health business. Private players were up 25% y-o-y while PSUs were flat y-o-y.
Increasing risk aversion among consumers, strong uptick in demand for new Covid-related policies (Corona Kavach and Corona Rakshak) and penetration among mass segments through the newly launched Arogya Sanjeevni plan are likely drivers.
Growth in retail heath was strong at 48% y-o-y. Investment by health insurers in digital renewal of policies has likely paid off. Standalone health insurers reported strong 69% y-o-y growth in retail health in July 2020 (higher than 12% y-o-y in FY2020). Private players were up 50% y-o-y in retail health insurance premiums with 1.7X y-o-y growth for Reliance General, 99% for Tata AIG and 60% for Iffco Tokio. PSU players were up 21% y-o-y.
Fire retains strong growth trends Fire insurance premiums grew 33% y-o-y in July 2020. This was likely driven by rise in reinsurance rates by GIC. The reinsurer increased property reinsurance rates in March 2019 (average rise of 2X) for eight occupancies (comprising 35% of industry volumes) and subsequently for all 291 occupancies from January 2020. PSUs reported strong 30% y-o-y growth in fire insurance. Private players were strong as well, up 36% y-o-y. TOP Source
Property Insurance Premia Buck Trend - Financial Chronicle – 20th August 2020
The increase in premium rates and higher demand post-lock-down have helped property insurance premium grow by 36 percent between April and July despite the overall de-growth in general insurance premiums. The gross direct premium collected under property insurance has growth by 36.3 percent since the beginning of the fiscal to Rs 9125 crore against Rs 6695 crore in the same period of previous fiscal. Property insurance has bucked the general trend in other segments, which have either de-grown or grown in low single digits due to the pandemic.
The growth in gross property premium is mainly due to the hike in premium rates by insurance companies this year. In the beginning of the calendar year reinsurer General Insurance Corporation (GIC- Re) had increased its reinsurance rates for select occupancies and later for all the occupancies it was reinsuring. “GIC-Re had been asking the general insurers to follow risk-based pricing as the premiums
16 were lower than the burn rate derived by the Insurance Information Bureau. IIB has been collecting the data of claims and premiums for the past few years,” said R Chandrasekaran former secretary general of General Insurance Council.
Since the de-tariffing in 2007-08, general insurers have been charging lower premium rates in order to grab business. This competition among the insurers had led to unviable rates. However, after GIC Re hiked the reinsurance rates, the premium rates too have gone up. Further, post lock-down, several incidents of fire mishaps were reported from different parts of the country as and when the factories were opened. This has increased property insurance, said Chandrasekaran.
(The writer is Sangeetha G.) TOP Source
Tapan Singhel of Bajaj Allianz General Insurance reveals why Indians shy away from buying insurance - You Story – 20th August 2020
Business may be dwindling across sectors, but insurance in health and life is poised to grow despite the current uncertainty. The continued threat from COVID-19 has led to increased concerns, leading many people to buy health and term life insurance, a recent PwC report indicates.
Titled COVID-19: Impact on the Indian Insurance Industry, the report says insurers believe the fear around coronavirus has pushed people to buy health insurance, with inquiries surging by about 30-40 percent.
But Tapan Singhel, Managing Director and CEO of Bajaj Allianz General Insurance, believes that insuring oneself is not so common among Indians.
On an average, the expenses of a COVID-19 patient go up to Rs 2 lakh. This should ideally lead to several health insurance claims, but that “is not the case”. In April, the growth was negative with several insurance players reporting a "degrowth".
According to the Insurance Regulatory Development Authority of India (IRSAI), in April, new business premium sdeclined 32.6 percent to Rs 6,728 crore as against Rs 9,928 crore for the same period last year. The number picked up only in May.
“Look at an insurance product. For the price and the protection, it is unbelievable. Insurance companies are paying, and the balance sheet is the evidence. But the interesting part is: why are people not queuing up to buy a product that is priced so well and offers amazing benefits?”
Government backing needed Having worked in the insurance space for over 15 years, Tapan considers himself a “hardcore insurer”. He says he has observed that insurance has the highest penetration in countries where it is mandatory by law. In India, this is why automobile insurance is the norm - it is mandatory to have third party cover.
Tapan believes India’s insurance industry has been offering good policies and products for different situations, and adds that insurance companies are often perceived as agents but are “just the intermediaries”.
Tapan feels more partnerships – especially with the government - are required to reach and cover more people, and that a combination of strategies can make it easier to provide cover to more people.
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“Insurance is critical, which is why a partnership between government and insurance companies is vital. Both need to work together to benefit citizens. At the backend, there should be some support or provision from the government if things go out of control,” he says.
(The writer is Apurva P.) TOP Source
Health has become biggest business in general insurance: Irdai member - Business Standard – 20th August 2020
The health segment in non-life insurers' portfolio has become the biggest line of business, overtaking the motor insurance segment. In fact, by the end of the year, the health segment likely to be far ahead of motor, said T L Alamelu, member (non-life) of Insurance Regulatory and Development Authority of India (Irdai).
The pandemic has promted people to buy health covers, as the uncertainty around the virus and its effects are rising with the number of infections going up daily. This fear among people is aptly reflected in the huge response the Corona Kavach policy has got since launch. Corona Kavach is a standard product that offers protection against covid-19 virus.
According to Irdai, some 750,000 Corona Kavach policies were sold as of August 14, covering 1.29 million lives and the premium colleted is Rs 215 crore. The demand for Corona Rakshak, on the other hand, is somewhat muted, with 183,000 policies being sold, covering 217,000 lives. Premium colleted was Rs 29 crore. This is in contrast to what is happening in Aarogya Sanjeevani, where the number of policies is around 72,000 with premium of around Rs 33 crore.
“It just shows that there is a fear factor among the public so they are finding a lot of value in the Corona Kavach. It’s a short-term policy and relatively cheaper, hence people are buying it in large numbers. Also, not many people have opted for the three-and-a-half-month tenure and most have opted for nine-and-a- half months, as they believe the virus is not going away any time soon,” Alamelu said.
While the lockdown and economic downturn have shrunk both vehicle sales and motor premium collections, they have had an oppposite effect on premiums in the health segment, which have registered a 10.4 per cent rise to Rs 18,415 crore as of July 2020 from Rs 16,674 crore a year ago. In the retail health segment, premiums rose 31 per cent to Rs 7,124 crore as of July 2020 from Rs 5,667 crore last July.
Experts say muted growth in the economy and subdued activity in auto sales are expected to further impact motor insurance business, while health insurance will continue its pick-up going forward, with the pandemic creating a renewed interest in health insurance.
That said, there still exists a huge protection gap. It is visible in the number of reported corona claims the insurers have received. While the number of infected cases is touching 2.77 million, insurance claims intimated so far (as of August 18) are about 125,000. This seems to indicate that 96 per cent of the population has not been covered for corona. And, this is true not only true for covid but for other diseases also.
“Out-of-pocket expense is one more aspect of the health protection gap. There is lot of out-of-pocket spending, so much so that it becomes financially unviable for not only below poverty line customers but also for the middle class,” Alamelu said.
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“There are other aspects like non-treatment and under-treatment due to limited access and unavailability of services. With the spread of covid in tier-2 and 3 cities, and in villages, the health protection gap has become extremely pronounced,” she added.
But she said there has been a lot of progress in health insurance. Prior to March 2020, the number of health products that had come out in the past 20 years were about 500. But, between March and now, the number of products approved is about 131, which reflects the urgency of the regulator and the needs of the consumers to which insurers are responding.
(The writer is Subrata Panda.) TOP Source
General insurance: Why you always need to have home insurance - Financial Express – 19th August 2020
On an average we spend a big part of our lives paying our home loans but we forget one essential protection measure: home insurance. Anyone who is the owner or occupant of a property can purchase a home insurance policy. Individuals who have rented a property can also apply for a home insurance policy.
Home insurance provides coverage against fire and allied perils, burglary, theft, terrorism, etc., for building, contents, jewellery and valuables, curios and works of art.
Additionally, if a person is staying on rent, he can buy insurance for contents he owns as assets are also valuable and any damage to them can lead to a financial loss.
You can opt for loss of rent cover which is of help if rental property gets destroyed due to some peril, and your tenant vacates it. Some home insurance policies also give customers an option to buy a policy for a period as low as one day to a long-term period of up to five years. The policy can also be extended to organisations or firms who are owners of a property that is being used for residential purposes by employees, partners or other invitees.
Why is home insurance important? Security against natural calamities One of the biggest losses in any natural calamity is the loss of one’s home. During such calamities a drastic difference has been noted between the incurred economic loss and the insured losses. Thus, opting for home insurance is a step towards protecting your home against natural calamities where you can shield not only the structure of your house but also the contents.
Protect content, valuables Under home insurance, an individual can insure the contents at home such as your home appliances, furniture, clothes, portable equipment such as cellphone, laptop, television, etc. Valuables such as jewellery can be separately covered under home insurance as well. You can also insure the jewellery you are wearing not just at home, but also while travelling anywhere in the world.
Covers risk arising due to fire & theft In case of incidents such as fire, a home insurance policy not only helps you with the cost of construction as per your policy terms and conditions, but also offers add-ons such as resettlement cover for situations
19 when you need to relocate due to severe damages at your home. In case of a theft in an insured’s home, a home insurance policy can cover stolen or damaged contents as well.
Protection towards liabilities At times, physical or property loss of a third person caused by some accident at your home, for instance—a cylinder blast or perhaps a repair activity at your home may cause a loss to your neighbour’s property. All such contingencies can be effectively covered under home insurance by opting for public liability coverage.
Flexible valuation Home insurance provides you the flexibility to choose your preferred type of home insurance as in on agreed value basis where the loss is settled by the insurer on the value of the property or content agreed by the insured at the time of purchasing the insurance policy.
It can also be on reinstatement basis where the insurer will settle the loss by replacing the damaged property or item with a new one, or indemnity basis where the insured will get the compensation as per market value of the house/ item damaged after a deduction for wear and tear.
Add-on covers Home insurance has add-on covers such as loss of rent, temporary resettlement cover, public liability, dog insurance cover, ATM withdrawal cover, lost wallet cover, key and lock replacement cover which provides wider protection for your home.
Home insurance is considered to be expensive but premium for it can be as low as Rs. 5 per day. Most people realise the importance of home insurance only after they have suffered losses but that can be too late.
(The writer is Tapan Singhel.) TOP Source
Non-life insurers concerned over Covid claims surge – Financial Express – 18th August 2020
Non-life insurance companies are concerned over the steady surge in claims arising from Covid-19. As on August 14, the general insurance industry had received over 1.15 lakh claims amounting to around Rs 1,800 crore. The general insurance companies are also concerned about different rates being charged by hospitals from insured and non-insured person for the treatment of the novel coronavirus.
The General Insurance Council will approach the Supreme Court this week seeking uniform rates for all the patients being treated for Covid-19. “We have come across several instances where hospitals are charging more to the patients who have health insurance policy, compared to people who don’t have it. If claims continue to rise in health insurance, premiums can significantly go up next year,” said a senior official from the industry.
According to non-life insurers, hospitals are exhausting almost entire sum insured for the treatment of Covid-19. For example, if an individual has a health policy with a sum insured of Rs 5 lakh and gets admitted to hospital for treatment of novel coronavirus, hospitals charges them for Rs 4.6 lakh. But if any individual without the health insurance goes for the same treatment, he is charged much lesser.
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There has been steady surge in claims arising from Covid-19. Till the end of July, non-life insurance industry has received over 80,000 claims amounting to `1,300 crore. According to the officials in the general insurance industry, states like Maharashtra, Tamil Nadu and Delhi are witnessing higher number of claims.
According to the figures compiled by General Insurance Council, the highest claims have come from Maharashtra at 48,000 as on August 14. Tamil Nadu and Delhi have seen around 13,600 and 11,000 claims, respectively. According to the ministry of health and family welfare, there were 6.76 lakh active cases of novel coronavirus in India as on August 17, 2020, another 19.19 lakh were discharged and 50,921 have died.
“We want standard treatment rates for everyone, whether insured or not insured. If government can fix the rates for the treatments, we would be happy as hospitals will not able to charge more from insured individuals,” said a senior official from a leading private sector insurance company. In FY20, health insurance had seen premiums at Rs 51,636.34 crore compared to Rs 45,532.22 crore in previous financial year. Claims payable under health insurance could be around 70-80% of the premiums. TOP Source
National Insurance offers BVLOS drone insurance coverage to Asteria Aerospace – Outlook – 17th August 2020
State-owned general insurer National Insurance Company has issued the country''s first beyond visual line of sight (BVLOS) drone insurance coverage to Asteria Aerospace, a manufacturer and operator of unmanned aerial vehicles.
National Insurance is providing the coverage through Itus Insurance Brokers using deep- tech startup TropoGo''s platform.
TropoGo, which specialises in risk assessment of aerial mobility, has worked closely with the insurance player in offering the product.
BVLOS drone operations are the next frontier in drone-technology to deliver multiple mass benefit use cases like agriculture, disaster management, healthcare, infrastructure monitoring, among others.
The insurance coverage will safeguard the risk of any loss or damage to third-party due to any accident during the test flights, TropoGo said in a release.
The insurance coverage is exclusively designed for Asteria''s DGCA approved consortium to conduct 100 hours of BVLOS test flights in a pre-defined airspace approved by the Directorate General of Civil Aviation, TropoGo said.
A consortium includes drone operators, unified traffic management (UTM) providers, among others.
The DGCA has approved 20 drone consortia, including Asteria Aerospace, for conducting BVLOS drone trials in a sandboxed environment.
"We have been seeing increasing drone adoption in the last few months, be it COVID control, AMPHAN disaster management or locusts control. We can also see ''Beyond Visual Line of Sight'' operations will further accelerate the innovation especially for medicine delivery and in agriculture in the coming years," National Insurance''s chief regional manager Shubhankar Pain said.
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Besides Asteria Aerospace, National Insurance is also providing similar coverage to the DunzoAir consortium.
"With this collaboration, TropoGo is well-positioned to support every insurance need of India''s thriving drone ecosystem, be it Line of Sight Operations or Beyond Visual Line of Sight experiments.
"We will continue to collaborate and co-innovate to bring smart, affordable and fit for purpose financial products for the Indian drone community," TropoGo founder Sandipan Sen said in the release.
TropoGo is the platform for drone operations and a carrier of the outsourced functions of Itus Insurance Brokers Pvt Ltd. PTI HV BAL BAL TOP Source
Insurers step up cyber risk coverage in post-pandemic digital world – The New Indian Express – 17th August 2020
Cashing in on the Covid-19 crisis and the subsequent lockdown that has forced companies and individuals to work from home, insurance companies have rolled out a host of plans to cover victims of cyber attacks. From someone accessing your emails remotely, malware attack or fraudulent transactions, the policies provided by insurers have become all the more mandatory as individuals and businesses become heavily reliant on digital technologies.
“Post the lockdown more and more individuals are using digital means to process payments. With social distancing the exchange of physical money has reduced even further as online methods of payment are taking on a much larger role. This leads to an increased cyber threat exposure, especially to new users, the elderly or less tech savvy,” explained TA Ramalingam, chief technical officer, Bajaj Allianz General Insurance.
He added that a major challenge is that people are not aware that a cyber cover for individuals exists which can act as a tool to mitigate and reduce losses from cyber-attacks. We are hoping that more people become aware about this insurance as it is a well-rounded product for the protection of individuals against cyber risks,” Ramalingam said.
Currently, Bajaj Allianz and HDFC ERGO are the two key players which are providing cyber insurance covers for various incidents including identity theft , social media cover, cyber stalking, malware attack, phishing and data and privacy breach by third-party cover. The loss of an individual’s finances, reputation, damage to mental health are also taken cognizance of.
So far, in India, only corporates and financial institutions have opted for cyber insurance cover, however, with increased digital payments and remote work models, the individuals may also opt for such polices. “The sum Insured for the cover ranges from `1 lakh to `1 crore. The premium for this policy is quite affordable and ranges between `662 and `8,933 (excluding GST),” Ramalingam told this publication.
(The writer is Bismah Malik.) TOP Source
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General insurance business at pre-Covid levels in July – The Times of India – 17th August 2020
The general insurance industry has posted year-over-year growth of 18 percent to Rs 17,011 crore in July, compared to the year-ago period. The industry has seen premiums of Rs 56,340 crore till July — a recovery to pre-Covid levels. This growth has been driven by fire, crop and health insurance.
Bajaj Allianz Insurance, which posted the highest growth of over Rs 1,000 crore this month at Rs 2,004 crore in premiums, did it on the back of the crop insurance business it underwrote under the PM Fasal Bima Yojana. Other companies in crop insurance, like Agriculture Insurance and SBI General too saw a premium growth of 60-70 percent in July.
New India (15 percent growth) and ICICI Lombard (5 percent) stayed out of the crop business and posted lower premium growth. Insurers that stayed out of crop insurance this year said they were looking at underwriting profits — and the claims experience was too high in crop to make it feasible.
The growth in health insurance due to the Covid-induced panic was better reflected in premiums of standalone health insurers like Star Health, ManipalCigna Health, Aditya Birla Health, which posted premium growth of 50-70 percent.
(The writer is Rachel Chitra.) sourceSource –TOP
Insurers' body accuses hospitals of inflating bills for Covid-19 treatment - The Economic Times – 14th August 2020
The General Insurance Council — an association of non-life insurance companies — has accused hospitals where cashless insurance is available, of inflating bills for Covid-19 treatment . The council has called for regulation of healthcare fees and is seeking to become a party to a Supreme Court petition on cashless servicing of Covid treatment claims.
Speaking to TOI, GI Council head M N Sharma said, “We see medical inflation where hospitals artificially jack up rates. Now, insurance companies can’t follow suit because we are regulated. Every policy we issue, the rates are approved by IRDAI. So we cannot unfairly price our products, even if hospitals are doing so.”
The council is demanding the government set caps on Covid-19 treatment costs. Stating that private hospitals are arbitrarily charging patients, the GI Council is likely to implead itself in a petition filed in the Supreme Court as it has noticed differential charges for patients with insurance cover and those without insurance cover. The SC PIL (public interest litigation) was originally filed by a hospital victim Avishek Goenka, a resident of Kolkata, stating the problems faced by the common man. GI Council is likely to implead itself in Goenka’s petition.
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The PIL also mentions discrepancy in hospital charges between patients with insurance and those without. “It has come to our attention — from hospital bills that some hospitals decide the treatment procedure based on the sum insured of the policy. Say for example, the sum insured is up to Rs 5 lakh; you will find the hospital charging a sum of Rs 4.9 lakh. Whereas for patients without insurance, the bill might be half or a quarter of that.”
(The writer is Rachel Chitra.) TOP Source
HEALTH INSURANCE
How to choose health insurance cover for mental illness? – CNBC – 22nd August 2020
With the aim of making mental healthcare available to all, the Insurance Regulatory Development Authority of India (IRDAI) has asked insurers to include mental illness in all regular health insurance coverage. Insurance companies have been mandated to treat it as a normal disease.
As per rule, insurance companies cannot deny coverage to customers who have used opioids or anti-depressants in the past.
"Also, insurers can't deny coverage to people with a proven history of clinical depression, personality or neurodegenerative disorders, sociopathy and psychopathy," explains Amit Chhabra, head- health insurance, Policy bazaar.
Now, if customers want to invest in a mental illness cover, they should check if the disorder requires hospitalisation or can be treated through therapy and medication.
In the case of the former, Naval Goel, chief executive officer and founder of PolicyX suggests to go for a comprehensive indemnity plan that covers hospitalisation.
"The latter will require a plan that also offers outpatient department (OPD)," he added.
Outpatient counselling or therapy is only covered if the plan offers OPD benefit.
If an individual is diagnosed with a mental illness subsequent to buying a health insurance policy, the insurer cannot reject the claim.
Some insurers have already started customising products that cater to the specific needs of people suffering from mental illnesses.
"These plans cover various expenses such as OPD costs, doctor consultation fees, hospitalisation and rehabilitation. There are certain plans which offer a sub-limit on the sum insured for pre-existing conditions or comes with a waiting period," explains Rakesh Goyal, director, Probus Insurance, Insurtech Broking Company.
The coverage of each plan may vary and depend on the insurance plan and its underwriting limitations.
In case of a pre-existing mental disorder, the insurer is at liberty to treat it as one and decide on the waiting period, usually 2-3 years.
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One of the most recent plans, according to Chhabra, that provide comprehensive OPD cover for psychiatric illness and other ailments within the base plan is Digit’s OPD Policy.
"The policy offers OPD cover up to Rs 10,000 and is available in two variants - PB OPD family and PB OPD 1 adult. For now, the plan is available in two sum insured options – minimum Rs 5 lakh and maximum Rs 10 lakh. One can choose any sum insured from Rs 5 lakh to Rs 10 lakh," he explains.
Max Bupa’s GoActive plan and Manipal Cigna’s ProHealth Insurance also cover conditions related to mental illnesses.
"Similarly, HDFC Ergo’s Critical Illness Plan – Platinum covers a popular mental disorder – Alzheimer among 15 other critical illnesses. Star Health and Allied Insurance’s Star Special Care plan covers autism in people from 3 to 25 years of age," Chhabra added.
Reliance General Insurance Company and Max Bupa Health Insurance have also introduced health plans which are specifically designed for people suffering from mental illnesses.
(The writer is Anshul.) TOP Source
Corona insurance claims cross Rs 2,000 crore – Financial Express – 21st August 2020
The value of insurance claims from patients infected with novel coronavirus, across India, has hit Rs 2,040 crore, with the number of claims having risen to1.29 lakh. As on August 19, insurers have settled over 81,000 claims amounting to Rs 780 crore.
Executives in insurance firms told FE, claims from semi-urban and rural areas in Maharashtra have been on the rise. Data from the General Insurance council shows insurers have received over 54,000 claims from Maharashtra amounting to Rs 700 crore; Tamil Nadu and Delhi have reported around 15,500 and 11,200 claims, respectively.
“In Maharashtra we have seen claims from places like Nasik and Solapur in the past few days. Earlier we were seeing claims from urban areas like Mumbai, Thane and Pune,” a senior officer from a leading insurance company said. As on August 19, Mumbai has seen 17,300 claims while those from Nasik and Solapur numbered 1,281 and 1,170 respectively.
Insurers believe the claims will continue to rise until there is a vaccine to prevent and cure the infection. The average ticket size for a novel Coronavirus claim is around Rs 1.5 lakh in urban areas and around Rs 50,000-75,000 in semi urban or rural areas. Where the condition of the patient is serious and he has been admitted to the intensive care unit (ICU) the claims are in the range of Rs 6-8 lakh.
The current pandemic has led to many investors buying health insurance covers in the past few months. Data from Insurance Regulatory and Development Authority of India (Irdai) shows that between April and July, health insurance premiums amounted to Rs 18,415.52 crore compared to Rs 16,674.72 crore in same period last year, a growth of 10.44%. Health is now the biggest segment in the non-life insurance industry in terms of premium followed by motor insurance.
(The writer is Chirag Madia.) TOP Source
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Millennials' next big concern -- health insurance - Business Today – 20th August 2020
Twenty-five-year-old post-doc student from Kolkata Pratik Mukherjee's COVID-19 test result was troubling news. It turned only worse subsequently when private hospital authorities handed a bill of Rs 2 lakh for a day's treatment in the isolation ward. However, he is not alone as reports of exorbitant rates and overcharging continue to surface across India despite the central and state governments' instructions to cap hospital charges for COVID-19- related treatments.
Given the gravity of the situation and the panic surrounding it, an increasing number of people are opting for health insurance as early as possible to protect themselves, their loved ones, and their finances. Insurance firms have witnessed an uptick in health insurance policyholders amid the ongoing crisis. Although inquiries were made from all age groups, young customers, in particular, became increasingly interested in medical cover in the face of this massive health crisis.
A survey conducted by Max Bupa Health Insurance company found that millennials - people in the age group of 25 to 35 years - were increasingly curious to understand health coverage.
Around 63 per cent of this age group made inquiries for health insurance amid the COVID-19 pandemic. This age group, otherwise not much concerned about health insurance, is now keen on buying health insurance to save medical costs.
"We have a significant growth in our younger customers, particularly in the age group of 25-35 years," said Rishi Mathur, Chief Digital and Strategy Officer of Canara HSBC Oriental Bank of Commerce Life insurance.
"Due to COVID-19, consumer behaviour has undergone tectonic shifts and has transformed millennials' perception of the importance of having health insurance in their financial portfolio. The pandemic made millennials realise the meaning of taking care of their health. With the coronavirus cases spiking every day, insurers are seeing many first-time buyers who feel the need for quality healthcare in case of a medical emergency," added Prasun Sikdar, MD, and CEO of the ManipalCigna Health Insurance.
Gurdeep Singh Batra, Head-Retail Underwriting, Bajaj Allianz General Insurance has also experienced the same trend. According to him, when the COVID-19 pandemic began in the country, elderly people became crucial customers as they upgraded their already existing insurances. Subsequently, the traction started coming from millennials, Batra added.
Amit Chhabra, Health Business Head, Policybazar.com said that he has also witnessed an increase in awareness in terms of both health and term insurance, across all age groups amid the coronavirus pandemic. However, Chhabra added that millennials have preferred health insurance to term insurance, that's because "death rate among millennials due to COVID-19 is relatively lower than elderly people".
Chhabra also stated, "Almost 70 per cent of our customers are below the age of 45 years for health insurance; 25 per cent, between 45-60 years; and 15 per cent are above 60 years.
Amid the pandemic, the health insurance sector as a whole has achieved an 8 per cent growth in April- June 2020 as compared to that in 2019. During the FY 2018-19, general and health insurance companies collected Rs 44,873 crore as health insurance premium, registering a growth of 21.2 per cent over the previous FY 2017-18. Health insurance premium grew over 20 per cent year-on-year in the past four financial years, according to IRDAI.
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According to Star Health Insurance, the firm has witnessed 34 per cent growth between April and June this year. Aditya Roy, MD, Star Health Insurance said, "There has been a considerable contribution of young adults opting for health insurance, in this growth".
Roy added, "Individuals in the age bracket of 25-40 years constituted around 29 per cent of the total people who signed up for health insurance in the previous quarter that ended in June 2020."
However, Mathur of Canara HSBC Oriental Bank of Commerce Life insurance said that the focus of youth has been largely on affordable term covers with an increasing trend towards protecting the health and safeguarding against critical illnesses.
COVID-19 health insurance products--Corona Kavach and Corona Rakshak have seen major takers among millennials. Several insurance providers agreed that there has been encouraging inquiries and a surge in COVID-19 related health policies.
Around 80 per cent customers of the Corona Kavach policy are below the age of 45. Bajaj Allianz General insurance's Batra said that "We have witnessed higher inquiries for sum insured falling between Rs 2-5 lakh, considering the treatment expenses for COVID-19. Policy period of six and a half months and nine and a half months have witnessed a higher demand in the market".
In order to attract more and more young adults for health policies, ManipalCigna has launched a digital campaign, "Health Ke Saath, Health Insurance Zaroori", to gain a greater sense of control over their physical and financial health.
Prasun Sikdar of ManipalCigna added, "Millennials need to understand the fact that comprehensive health insurance cover is as essential as Roti Kapda aur Makaan".
The pandemic has changed people's lives across the world, perhaps forever. Adjusting to the constantly changing 'new normal' has not been easy for anyone. This rising awareness about health protection among millennials is perhaps an unprecedented positive outcome of COVID-19.
(The writer is Mansi Jaswal.) TOP Source
Covid-specific health cover in high demand as cases surge - The Tribune – 19th August 2020
Abysmally low health insurance penetration notwithstanding, the fear of contracting Covid-19 has seen a spurt in the demand for short-term Covid-specific covers, especially among first-time buyers.
According to insurers, even those who are already covered under regular health insurance are buying standard Covid-19 plans for a guaranteed coverage.
“The response has been tremendous. We have been selling an average 1,000 ‘Corona kavach’ policies a day,” says Amit Chhabra, head of health insurance, Policybazaar.com.
With cases mounting by the day, there has been a steady rise in insurance claims too. “In July, claims worth Rs 565 crore were settled against 35,000 hospitalisations. An average Rs 1.6 lakh was given to each claimant,” says Indraneel Chatterjee, co-founder and principal officer, Renewbuy.com.
Bhaskar Nerurkar, head of health claims at Bajaj Allianz General Insurance, says for a cashless Covid-19 claim, they do pre-authorisation approval within 45 minutes while final settlement is done in less than two hours after bill verification. “In case of a reimbursement claim, we pay a policyholder within three working days,” he adds.
(The writer is Vijay C Roy.) TOP Source
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Insurance cos witness a steady rise in non-Covid health claims - The Hindu Business Line – 19th August 2020
Over five months after the Covid-19 lockdown started, people have once against started seeking medical help for other health concerns.
Data with insurance companies reveals that there has been a steady rise in non- Covid health insurance claims in July.
“In the months of April and May, non-Covid claims had come down, but now they are increasing. There was a 64 per cent increase in July for such claims versus average claims in April, May and June,” said Bhaskar Nerurkar, Head, Health Claims, Bajaj Allianz General Insurance, adding that by the middle of August, the insurer is now touching almost the regular claim volume.
“Health insurance claims for non-Covid related medical procedures, there are signs that some elective surgeries are once again increasing. People seem to be realising that they cannot postpone medical treatment indefinitely,” said an executive with a public sector insurance company, adding that this is across all cities, even where Covid cases have been rising steadily.
According to Nerurkar, the claims are mainly for treatments of cancer, dialysis, cataract surgeries and cardiac treatments.
Since the Covid-19 pandemic and subsequent lockdown, most people had been avoiding hospitals over concerns of contracting the virus and overburdened medical staff, were postponing routine treatment and surgeries as far as possible.
“There were claims arising out of emergency cases like heart attacks and accidents, but largely people were avoiding hospitals,” noted the executive from the public sector insurer.
In his address to the nation on March 19, Prime Minister Narendra Modi too had urged citizens to avoid visiting hospitals for routine checkups and postpone non-essential surgery by a month to ensure that there was no undue pressure on hospitals that have been treating Covid-19 cases.
Many doctors too, had been advising patients to try and avoid non-essential surgeries in the pandemic.
(The writer is Surabhi.) TOP Source
Looking for insurance cover for mental illness? Here's what you need to know - Times Now – 19th August 2020
Mental illnesses did not come under the insurance ambit till 7 April 2017, when the Mental Healthcare Act was passed. It came into force on 7 July 2018.
Mental health and mental illness have been ignored and avoided for a long time in our country. However, with so many celebrities, TikTok stars, students and youngsters committing suicide during this Covid-19 crisis, we are witnessing a significant shift. Today, more people are open about mental issues than they were in the past, including celebrities. And this gradual shift has also impacted the way health insurance policies are framed.
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Definition of mental illness: The Mental Healthcare Act of 2017 provides the definition of mental illness. As per the Act, if there is a considerable disorder in the mood, thinking, perception, orientation or memory of an individual that hampers the behaviour, decision making, judgement or the capability to meet ordinary day to day activities, it will qualify as mental illness. The Act keeps mental retardation out of this definition since it is mostly due to incomplete or arrested brain development.
Is mental illness covered under insurance? Mental illnesses did not come under the insurance ambit till 7 April 2017, when the Mental Healthcare Act was passed. It came into force on 7 July 2018. Section 21(4) of the Act stated, “Every insurer shall make provision for medical insurance for treatment of mental illness on the same basis as is available for treatment of physical illness”.
Subsequently, in August 2018, the Insurance Regulatory and Development Authority of India (IRDAI), directed all insurers to comply with the Act’s provisions. In September 2019, the regulator issued guidelines which barred the exclusion of “mental illnesses, stress or psychological disorders, behavioural and neurodevelopment disorders”.
What you need to know while looking for mental illness insurance cover: Insurance companies have been mandated to treat it as a normal disease. As per the rule, insurance companies cannot deny coverage to customers who have used opioids or anti-depressants in the past. Insurers can't deny coverage to people with a proven history of clinical depression, personality or neurodegenerative disorders, sociopathy and psychopathy.
If you are looking for a mental illness cover, the first step is to check if the disorder requires hospitalisation or is it something which can be treated through therapy and medication. In case the illness requires hospitalisation, it is advised to go for a comprehensive indemnity plan which covers hospitalisation.
If the illness can be treated through therapy and medication, you should go for a plan that also offers outpatient department (OPD) since outpatient counselling or therapy is only covered if the plan offers OPD benefit. While selecting a policy, remember that if an individual is diagnosed with a mental illness subsequent to buying a health insurance policy, the insurer cannot reject the claim.
Customer plans: Since mental illness is specific to individuals, some insurers have already started customising products which cater to the specific needs of people suffering from mental illnesses. These plans cover various expenses such as OPD costs, doctor consultation fees, hospitalisation and rehabilitation etc.
There are certain insurance plans which even offer a sub-limit on the sum insured for pre-existing conditions or comes with a waiting period. The coverage of each plan may vary and depend on the plan and its limitations. In case of a pre-existing mental disorder, the insurer is allowed to treat it as one and decide on the waiting period. TOP Source
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Indian Railways contemplating health insurance cover for its 13 lakh employees – Live Mint – 19th August 2020
The Railways on Wednesday said it is contemplating to widen the scope of medical treatment of its 13 lakh employees by providing them a health insurance scheme.
In a statement, the national transporter said it was already providing medical health facilities to its employees and their dependent family members through 'Railway Employees Liberalized Health Scheme' and 'Central Government Health Services'.
"Indian Railways is now proposing to widen the scope of medical treatment of railway employees," it said. Accordingly, a committee has been constituted to examine all aspects relating to a 'Comprehensive Health Insurance Scheme' for railway staff with a view to provide an insurance cover against financial risks during medical, emergencies and otherwise, the statement said.
"Indian Railways requested all general managers of zonal railways and production units for their views/suggestions on the aforesaid proposal," it said.
It may be noted that the Indian Railways has a chain of 586 health units, 45 sub-divisional hospitals, 56 divisional hospitals, eight production units hospitals and 16 zonal hospitals spread all over the country with more than 2500 posts of doctors and over 35,000 paramedic staff. During the pandemic, the Railways dedicated more than 6,500 hospital beds, which is half the number of beds from its 125 hospitals, to COVID-19 patients across the country. TOP Source
Policyholders have to pay more premium if COVID-19 treatment rates not capped: Insurance companies – DNA – 19th August 2020
Insurance companies, which are already troubled by the overcharging of hospitals amid the coronavirus disease (COVID-19) pandemic outbreak, have now said that customers should be prepared to pay several times more premium for their health insurances if they expect insurance companies to pay their entire hospital bills.
Currently, a case over the capping of hospital bills is on at the Supreme Court, where the hospitals have appealed that the insurance companies should be willing to pay the full amount as claimed for the medical treatment. Meanwhile, the insurance companies are all set to present their appeal as well.
The insurance companies maintain that customers need to pay further premiums on their medical insurances and that affordable charging on part of hospitals will actually increase the total amount as the claim. The companies are prepared to submit their demand before the Supreme Court in this regard.
Meanwhile, the hospitals have appealed insurance companies should pay the full amount of medical treatment bills and that they should not cut claims. Currently, insurance companies are providing claims based on fixed rates, but the use of advanced equipment like PPE kits often ends up raising the total claim amount. TOP Source
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Only specific health insurance policies will cover covid-19 vaccine – Live Mint – 19th August 2020
If you are worried that the vaccine for covid-19 may burn a hole in your pocket and think that your health insurance policy will come to the rescue, you could be mistaken. Note that only specific health insurance policies will cover the cost for the covid-19 vaccines.
Oxford-AstraZeneca, a covid-19 vaccine for which Pune-based Serum Institute of India has tied up as a manufacturing partner, is expected to clear all trials and be available by the end of 2020. Though the vaccine is still in the advanced phases of clinical trials, Indians are waiting for it eagerly while they anticipate the possible cost. A couple of other vaccines too are in the trial phase.
“One is the procedure cost where an infected patient is hospitalized and covid-19 medicines or vaccines are administered. These costs will be covered by all health insurance policies. However, if it’s a vaccine that’s being provided on the out-patient department (OPD) basis, then only policies that pay for OPD expenses will cover it subject to being prescribed by the medical practitioner," said Prasun Sikdar, MD and CEO, ManipalCigna Health Insurance Co Ltd.
Typically, all vaccines are covered if one has an OPD cover and insurers said the same would apply to the covid-19 vaccine as well. Health insurance policies that come with an OPD cover are generally quite expensive and experts said this is one reason why the category hasn’t picked up in the past. Premiums for OPD policies are high because the probability of claims is higher than hospitalization and the chance of fraud also is quite high.
Sikdar said the only way to have OPD cover premiums under control is to have network providers for OPD expenses as well but since that’s not easy to achieve pan India, the OPD products then would come at a high premium. Further, even if you have a policy with an OPD cover, there are chances of not getting the full vaccine cost covered because the OPD cover could come with sub-limits. For example, if the vaccine costs ₹1,200 and the sub-limit on vaccines in the OPD cover is ₹800, then you’ll have to bear the excess ₹400 out of pocket.
Dr Rashmi Nandargi, head-retail health underwriting, Bajaj Allianz General Insurance Co Ltd said it’s also important to check whether your OPD cover pays for vaccines or not. Understand that just because policies with an OPD cover may pay for vaccination, doesn’t mean you must buy one. “At an industry level there are no standalone OPD covers and even the ones that come with indemnity policies, the premiums are quite high because OPD utilization would be higher than hospitalization. This is why most people prefer paying for the OPD expenses by themselves," said Nandargi.
Typically, the differential premium charged for the OPD element is very close to the sum insured offered. For example, if the premium for a regular indemnity policy is ₹20,000, with an OPD cover with a sum insured of ₹5,000, the premium will shoot up to ₹25,000.
“Premium is higher because the insurer assumes that you would be utilizing some form of OPD services every year which is quite likely. The way plans are structured currently, it makes sense to give OPD covers a miss. As an alternative, one could look at memberships for OPD plans, which offer discounts on consultations and other benefits," said Abhishek Bondia, MD and principal officer, SecureNow.in.
(The writer is Disha Sanghvi.) TOP Source
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How Covid-19 is changing the Health Insurance Market in India - The Economic Times – 19th August 2020
Last five months have been transformational for our country, including our people and businesses. Today, India is among the top three countries worst hit by the Coronavirus pandemic. For the healthcare ecosystem, the pandemic has left its mark on almost all industries and sectors across the spectrum, including health insurance. While the pandemic is still showing no signs of abatement, we are now able to forecast its impact the health insurance industry in the near and mid- term future with enough cues from the past quarter’s data.
Let us begin with a view of the positive changes that the health insurance industry has seen over the last few months. Firstly, there has been a promising 30-40% uptake in health insurance adoption across industry players, with certain players seeing a significant jump more than others. It is obvious that this surge will play out extremely well for providers with a robust digital distribution process and convenient access.
Secondly, the industry has witnessed a massive shift towards digitalisation. Not only has the need for digital distribution strategies become significant, the nature of services has also triggered the need for a reliance on digital processes across the spectrum: whether they are underwriting processes or processes related to issuing policies or filing claims.
Then there has been a clear change in the customer mindset. The pandemic has driven a sudden realisation around the significance of protective investments, especially when it comes to the aspects of health and life security. Health insurance has definitely taken the front seat when it comes to return- based instruments, both from the perspective of securing access to quality healthcare as well as investing in healthcare finances. This could over time lead to health insurance transforming from a traditionally “push” product to a “pull” one.
The full picture is not altogether rosy, however. The health insurance industry is simultaneously grappling with many a challenges as well as uncertainties that are directly borne out of the pandemic.
Firstly, there is the obvious and disconcerting uncertainty around treatment expenses for Covid-19. With significantly higher claim costs than those generally associated with infectious illnesses and epidemics, the Coronavirus pandemic is an actual nightmare in many respects. Most insurers are still scrambling to accurately predict the impact on healthcare expenses and consequently the claims book.
Additionally, the industry is grappling with a somewhat confusing claims experience in many cases. There is in fact a visibly high degree of dissonance at the time of claims, which impacts the customer in a rather unpleasant manner. Although the insurance regulator has been proactive in ensuring there are no unnecessary hassles at the claims stage, there have been factors that had a significant impact on the experience.
For example, usually non-payable items in insurance such as PPE kits, gloves, disinfectants now form a significant part of any treatment protocol for Covid-19. Further, there exists significant variance in treatment protocols and a lack of consensus in relation to standardisation of costs and expenses between the insurer and the hospital providers. Not to mention, the significant cost variances based on severity of impact or availability of medicines have made the entire claims process unpredictable in certain cases.
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The way forward Everyone in the health insurance industry will readily vouch for how drastic the influence of Covid-19 has been on their businesses and lives. A full-scale transformation is indeed underway and of course the digitalisation of the customer journey will be a critical component in this transformation. In my view, the industry and its customers – the insurance buyers – can expect some clear changes in the coming months and years.
First up, we will see a fast-growing trend of innovatively designed health insurance products. In fact, product design has been a key barrier to true digitalisation for the longest time. Most insurance providers have been trying to adapt their digital processes to a product that is based on an offline distribution model.
Complicated product features, complicated risk mitigation conditions, multiple and confusing product variants have all contributed to products that do not really motivate purchases. With consumers coming around to purchase health insurance digitally, the need for user-friendly digital products has never been greater.
Secondly, we will see a growing acknowledgement of the need to simplify policy documentation. Simplified and uncomplicated policy benefits will need to be accompanied by terminologies and product documentation which are precise as well as easy to understand. This will play a significant role in establishing trust and a truly digital experience; not to mention, a greater access for people across economic and educational backgrounds.
Thirdly, we will see the emergence of a complete digital ecosystem for claims processing and policy management. Be it automated claim adjudication that can significantly improve decision-making times, or better digital controls at the provider and insurer’s end, customers are looking to significantly faster claim settlements which require minimal manual processing.
Fourth, we will also see the emergence of a user-centric digital distribution channel. The primary factor here will be how convenient and easy it is to buy an insurance policy online. With existing insurers focussing on digital distribution models, the emergence of specialists such as Acko and Godigit, along with the entry of next-gen digital healthcare financing distribution companies like Vital, Plum, Onsurity, Toffee, Kenko , Riskcovry etc. that are looking at offering customer experiences that go beyond plain vanilla insurance plans, things sure seem to be getting exciting in this space. These new companies are focusing on user experiences with not only the insurance product but also other wellness needs.
Of course what remains to be seen, is just how long will the pandemic and its impact last, and will it truly transform the way industry functions for the better. Customer attention spans are short, and one needs to be quick to capitalise on them. Will the insurance companies and distribution partners be able to capitalise on this opportunity, and ensure adequate retention of existing digital adopters while also driving a permanent change in customer buying patterns – remains to be seen.
(The writer is Jayan Mathews.)
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Insurers allow customers to pay health insurance premiums in instalments – CNBC – 19th August 2020
In line with Insurance Regulatory and Development Authority of India’s (IRDAI) order, several insurance companies have extended the premium payment option for customers. The insurance regulator had earlier asked all general and standalone health insurers to give policyholders the option to pay health insurance premiums in instalments.
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Insurers were initially supposed to implement this instalment facility by October 2020. However, with the outbreak of the coronavirus pandemic, the regulator in April issued a notification to provide the facility on an immediate basis.
With this facility, policyholders can pay their annual health insurance premiums in a monthly, quarterly, or half-yearly basis. According to Amit Chhabra, Head of Health Insurance Policy bazaar, this facility eases the payment process for policyholders.
"For instance, rather than paying an upfront premium of Rs 20,000 annually, it is easier for a policyholder to pay Rs 1650 per month," he says.
Insurance company such as Bajaj Allianz has recently announced premium instalment facility available with their health insurance product 'Health Guard'. In this case, premiums can be paid on instalment basis- annual (for long term policies), half-yearly, quarterly or monthly.
A Guru gram-based insurance start up Toffee Insurance has also allowed its customers an option to set up a monthly payment mode.
"This ease of payment is further enhanced for the customer through an option to make the ad-hoc payment or to even modify the card or bank details for the subscription via customer support team. Customers are sent periodic payment heads-up prior to their bank account or credit card being charged on fixed dates each month," says Rohan Kumar, CEO and Co-founder, Toffee Insurance.
Toffee Insurance claims to have developed an in-house platform that has been benchmarked and certified to provide claim filing through a completely paperless process.
(The writer is Anshul.) TOP Source
Modi Govt’s Jan Arogya scheme looks at group health insurance plans to cover the uninsured – The Print – 19th August 2020
In a bid to increase health insurance coverage in India, the National Health Authority (NHA) is planning to launch three-year pilot projects with insurance companies under which they will be able to use the Pradhan Mantri Jan Arogya Yojana (PMJAY) platform for group insurance plans at PMJAY rates and packages.
Every individual in every such group, however, will have to be without any existing health insurance. PMJAY is the secondary and tertiary care arm of Ayushman Bharat.
The initial back-of-the-envelope calculations are that for a cover of Rs 5 lakh per annum, each member of the group may need to pay a premium of Rs 300-600. There will be no subsidisation by the government, but just benefits associated with the economy of scale, officials explained.
The notice issued by the NHA inviting expressions of interest said: “It is thus proposed to carry out insurance pilots drawing upon AB PM-JAY framework, retaining the core features of AB PM-JAY benefits, processes, IT infrastructure, hospital network etc for similar economies and efficiencies for all stakeholders, resulting in affordable premium levels, product acceptance and uptake in large numbers by the end customer/communities. The insurance company shall offer coverage as above to the uncovered
34 population on a self-pay basis, having liberty to innovate, to attract and to service as suitable for the profile of customers in this segment, their needs and aspiration etc.”
‘Only for the uninsured’ The group insurance plan can pick any group but none of the members should have insurance.
“We have no problems provided it is a defined group — it could be the employees of one company, it could be sacked employees of another. It could be domestic workers in a particular locality who have been aggregated,” said an NHA official, explaining the principle behind the scheme. “Just that no person in the group should have an existing health insurance. We will do some checks to prevent something like that from happening.”
The idea is to extend the benefits of insurance to the lower and middle classes who are not eligible for PMJAY, whose salaries exceed Rs 22,000 per month, which is the eligibility for coverage by the Employees State Insurance Corporation (ESIC), and do not have the wherewithal to buy individual health insurance plans. A demographic, which the NHA calls the “missing middle”.
“NHA shall extend support as regards to AB PM-JAY framework — IT systems, hospital network, package pricing constructs and anonymised and aggregated actuarial data for the relevant state/territory where an insurance company intends to carry out pilots so that insurance company may rate the risk and determine actuarial premium levels,” said the EOI document.
“NHA will not provide any financial support and/or other support not stated/not relevant for the said pilot programme. IT system support shall be extended to the extent feasible for both parties and agreed to by NHA at its discretion.”
The official quoted above added that in the initial stages of the pilot project, NHA is looking at 8-10 such groups and is also willing to make some changes in the existing packages keeping in mind the altered profile of the targeted clientele.
“For example, in our programme (PMJAY, under which families listed in the socio economic caste survey data as ‘deprived’ are being provided an insurance cover of Rs 5 lakh per family per year) there is no provision for single rooms but in this we can make some alterations to allow for a person to opt for that, may be with a slightly higher premium or may be a top up,” the NHA official explained.
Looking at NGOs While it is for insurance companies to put together a group and approach the NHA, one of the probable partners that the NHA is looking at are NGOs, in a bid to reach out to rural populations that are not eligible for PMJAY.
The current economic climate of job losses has also spurred the proposal, officials said. The target population for the pilot projects are informal workers, self-employed persons and their dependents etc.
“Many such families may not be able to afford to pay the premium for commercial health insurance schemes and are highly vulnerable to the impact of catastrophic expenditure on hospitalisation caused.
Sudden outbreak of Covid-19 pandemic along with already existing high ‘out of pocket expenditure’ has further increased the vulnerability of the uncovered population of the country. This segment of population is often referred to as ‘missing middle’ in the discussions on financial protection and Universal Health Coverage in India,” read the NHA document.
(The writer is Abantika Ghosh.)
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Your money: filing claim for covid-19 treatment? Know the rules - Financial Express – 19th August 2020
Buying an adequate health insurance policy can help you to stay financially secure against unexpected expenses arising due to hospitalisation for Covid-19 or any other ailment. On the directions of Insurance Regulatory and Development Authority of India (Irdai), general and health insurers have started offering standard Corona Kavach —indemnity based health plan, and Corona Rakshak—fixed benefit health insurance policy for covering Covid-19 treatment cost.
If you already have an adequate health insurance plan that covers treatment for Covid- 19, then you don’t have to invest in corona- specific health insurance plans. However, a person can consider investing in corona-specific plans for fixed benefits. To provide maximum value to people, a comprehensive health insurance plan that protects against a wide range of illnesses including coronavirus will be more suitable.
Filing claim for Covid-19 On Irdai’s directions, most health and general insurers are covering maximum consumables under health insurance claim which make up to 30-40% of the Covid-19 treatment cost. However, the extent of coverage varies from insurer to insurer.
For treatment of Covid-19, the hospital/clinic will first test you whether you are corona positive or not. Private labs have been asked to cap the test fees and the test will be only be allowed at NABL-accredited private laboratories.
However, people who might test positive for Covid-19 need not worry about the test charges as the test charges fall under pre-hospitalisation expenses and all the pre-hospitalisation expenses are covered. In all cases, charges incurred by an individual 30 days prior to his or her admission to any hospital fall within the ambit of pre-hospitalisation expenses and these are covered under health insurance policy.
However, while making a claim for pre-hospitalisation expenses, keep in mind the exclusions that fall under a health insurance policy. In order to make a claim for pre-hospitalisation expenses, the person for whom the bills are submitted should be hospitalised within 30 days of the expenses incurred.
If hospitalisation does not occur within 30 days, the claim is not accepted and the policyholder has to himself pay for the expenses incurred. The insurer only pays for relevant expenses such as tests and x- rays that are related to the illness for which hospitalisation is done.
Choosing the right claim process The procedure to file a claim in case you get hospitalised for treatment of coronavirus infection is the same as any other claim. All that a policyholder needs to do is to make a health insurance claim either through cashless or reimbursement mode. If you test positive for coronavirus, you may choose to take treatment at your choice of hospital and if that hospital falls under your health insurance provider’s network, you can avail cashless hospitalisation facility.
However, if your choice of hospital is not listed with the insurer, you would be required to pay the bills yourself. The bills will be reimbursed once you file a claim with the insurer. In both the claim processes, inform your insurer about your hospitalisation and register a claim request. This can be done at the TPA desk at each hospital.
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Irdai has directed insurers to process Covid-19 related claims within two hours of claim request. Also, many insurers have set-up their own claim settlement teams to help customers process claims at the earliest. Processing claims at the insurer’s end helps customers directly interact with the insurers and get claims processed at the earliest.
(The writer is Amit Chhabra.) TOP Source
COVID-19 propels rush for health cover: retail policy premium income up 31% in July – The Indian Express – 19th August 2020
The health insurance portfolio of insurers is rising at a faster rate, with the number of individuals going for health cover surging as never before due to the surging COVID- 19 cases across the country.
Health policy premium income at the retail level (individuals) rose 31 per cent to Rs 7,124 crore as of July 2020 from Rs 5,667 crore last July, as per figures released by General Insurance (GI) Council. This is because people have started taking health insurance in large numbers due to the rising COVID infections, insurance officials said. The overall health insurance segment (including retail and group) has registered a 10.4 per cent rise in premium income to Rs 18,415 crore as of July 2020 from Rs 16,674 crore a year ago, the GI Council data reads.
Even as COVID cases surged in the country, the Corona Kavach health insurance policy has evoked a good response within days of its launch by almost all insurers. In 20 days, between July 10 and 31, as many as 4.50 lakh individuals were covered by the health insurers with their standardised health cover ‘Corona Kavach Policy’ and nearly 70,000 COVID-related claims worth Rs 700 crore were settled by insurance companies, a senior Irdai official said. As on August 14, overall COVID-related insurance claims are 1, 15,000 with value of claims at around Rs 1,800 crore, said a source.
Corona Kavach, which was launched on July 10 and is offered by both general and health insurers, is a standard health insurance policy created to meet the treatment requirements for coronavirus. However, health insurers have sought a cap on treatment costs, amid hospitals jacking them up. Without a cap on costs, premium will rise, said an insurance company official.
Last month, the GI Council had come out with a schedule of rates for COVID-19 claims being filed with its member insurance companies, capping the ICU with ventilator care at Rs 18,000 per day in the case of ‘very severe sickness’ in hospitals accredited with National Accreditation Board for Hospitals & Healthcare Providers (NABH). However, this has been proved insufficient with patients being forced to fork out the balance amount charged by hospitals.
Meanwhile, aided by the spurt in health and fire & property insurance cover, the general insurance industry has managed to achieve a comeback from the decline recorded in the Q1 of FY21 to garner a premium income of Rs 56,342 crore as of July 2020, a rise of 1.62 per cent over the same period of last year.
However, according to Atul Sahai, Chairman and MD, New India Assurance (NIA), going forward, it wouldn’t be that smooth sailing for the industry because of the situation triggered by COVID-19. Bucking
37 the trend, NIA and another PSU United India Insurance is the only companies that consistently maintained a positive growth since March.
(The writer is George Mathew.)
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Cash-rich ESIC asked to set up more hospitals, make its facilities available to public – Financial Express – 19th August 2020
With Employees’ State Insurance Corporation (ESIC) hospitals’ utilisation level at less than 40%, compared with over 100% for government hospitals, the cash-rich corporation has been asked by the government to open its hospital facilities to the public for a fee.
Given ESIC’s Rs 80,000-crore reserve funds, it is also being nudged to build more modern hospitals across the country and provide cashless healthcare services to attract people with health insurance coverage.
Ever since its inception in 1952, the ESIC has set up 159 hospitals and 1,500 dispensaries across the country.
After a long 22 years, the government cut the mandatory contribution to the ESI medical care scheme for relatively low-wage earners to 4% from 6.5% in June last year, but this is a case of too little, too late.
With its income far exceeding expenses, the ESIC has over the years accumulated huge amounts as reserve funds — at the end of FY18, this was a staggering Rs 74,348 crore, 70% of which are not earmarked for any purpose and therefore, free. While the surplus for FY19 was estimated at Rs 9,351 crore, the size of reserves are believed to have risen to about Rs 84,000 crore by the end of FY19.
ESIC is tasked with giving insurance cover and free medical care to those earning monthly wages of up to Rs 21,000.
Appropriating funds of the ESIC for any other purpose than its mandate is ruled out, sources said, adding that it provides a cushion against risks like the ongoing Covid-19 pandemic to meet the commitments to the subscribers.
However, a portion of the funds could be used to build new healthcare facilities for the subscribers (free) as well as members of the public for a fee to compensate for depletion in reserves due to construction of new hospitals. Such a move would increase utilisation level of ESIC hospitals and reduce the burden of government hospitals to some extent.
ESIC is mandated to provide protection to employees against the impact of incidences of sickness, maternity, disablement and death due to employment injury and to provide medical care to insured persons and their families. The ESI Act applies to premises/precincts where 10 or more persons are employed. The Act now applies to over 12.11 lakh factories and establishments across the country, benefiting about 3.49 crore family units of workers.
From July 1 last year, an employee pays just 0.75% of the wage towards the ESI kitty, against 1.75% earlier, while the employer contributes 3.25% (4.75%).
(The writer is Prasanta Sahu.) TOP Source
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Insurance for NGOs performing last rites of COVID-19 victims – Outlook – 18th August 2020
The Maharashtra government has decided to provide Rs 25 lakh insurance cover to non- government organisations (NGOs) from rural areas which perform final rites of people who die of COVID-19, Minister Hasan Mushrif said on Tuesday.
The insurance cover to NGOs will be provided till September 30, the rural development minister said, according to an official statement here.
Mushrif said the government issued a circular in this regard on Tuesday.
"A decision has been taken to give Rs 25 lakh insurance cover to non-government organisations from rural areas and their staffers who perform final rites of those who die due to COVID-19," he said, according to the statement.
The cover is being offered considering the risk of members of such organisations getting infected by the disease, he said.
NGOs and their members, however, need to be registered with the local gram panchayats for availing the cover, the statement said.
The staffers of organisations concerned must have reported to work 14 days prior to getting admitted to hospital or their death due to the infection, it added. PTI ENM RSY RSY
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Hospitals and insurers don’t see eye-to-eye on COVID-19 treatment costs – Money control – 17th August 2020
After the General Insurance Council released its indicative rate chart for COVID-19 treatment last month, hospitals have put out a charge structure that they believe is reasonable. These rates are 70-108 per cent higher than GI Council’s charge structure. “We have shared our rates with the GI Council. Further discussions with the council to reach a consensus continue,” says Dr Alexander Thomas, President, Association of Healthcare Providers (India).
The hospital data, collated by AHPI, is based on treatment records of six hospitals across the country, including Narayana Health, Bangalore, Medica Super Specialty Hospital, Kolkata and Bhagat Chandra Hospital, Delhi. This data forms part of the report prepared by a committee comprising insurance and hospital officials as also independent experts. Chaired by Dr S Raghunath, Professor of Strategy, Indian Institute of Management Bangalore, it was constituted to compare the AHPI’s and GIC’s costs for COVID- 19 treatment at private hospitals.
Huge gap in cost structures The gap between the GI Council’s rates and hospitals’ charge structures is extremely wide. For example, the former has prescribed a cap of Rs 10,000 per day for isolation beds with oxygen care, while the hospital association’s estimates suggest a cost of Rs 21,931 a day. Likewise, insurers have decided to pay daily charges of up to Rs 18,000 for intensive care unit (ICU) with ventilator care, whereas the hospital body has quoted Rs 37,358. Hospitals’ charge structure has been computed assuming that a patient would have an average of 10-14 days’ stay.
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What’s more, the rate card does not include treatment of co-morbidities and other complications, which can prolong your stay and inflate the hospitalisation bill significantly. “This does not apply to private and higher category rooms, as charges will vary depending upon the facilities,” the report added. Neither does it cover high-end antibiotics, immunotherapy and interventional procedures such as chemo-port insertion, bronchoscopy procedures and biopsies, pleural or ascitic tapping and tracheostomy.
Capping of charges The cost of personal protection equipment (PPE) are capped at Rs 1,200-2,000 (and included in per day charges) in the GI Council’s indicative rate chart, depending on the severity of ailment. On the other hand, AHPI’s estimate pegs these charges at Rs 1,900-Rs 5,000. “The use of certified PPE in COVID wards is 2.4 units per patient per day at Rs 800 per PPE and is almost double in ICUs as the per-patient manpower increases in ICUs. The use of the PPE is 1.8 units per patient a day in the rest of the hospital,” the committee’s comparison chart states.
While the general insurance body’s charge structure is not binding on insurers, many have started adhering to it.
“We have started implementing the council’s rate chart issued in July. Hospitals have submitted their rate card and discussions are on. If the GI Council feels the need to revise its charge structure, it will take a call in September based on data analysis, after consulting member insurers,” says Nikhil Apte, Chief Product Officer, Health Insurance, Royal Sundaram General Insurance. Insurance companies have justified the rate caps, citing the ‘customary and reasonable charges’ condition. This clause states that treatment costs should be in line with charges for similar illnesses and service quality in the geographical location.
If both entities do not budge from their respective positions, policyholders – patients and their families – will have to bear the brunt. They will have to shell out a significant sum – up to 50 per cent in some cases– from their own pockets. “Some insurers have asked us to implement the GI Council rate card and we have to follow their instructions. In such cases, patients have to foot the bill for the difference between actual hospital charges and the claim settled by insurers,” explained a senior executive at a third-party administrator (TPA).
(The writer is Preeti Kulkarni.) TOP Source
Coronavirus outbreak: Insurance claims worth Rs 1,610 crore so far, set to rise – Forbes – 17th August 2020
While Coronavirus has claimed 50,921 lives in India so far, insurance companies report that they have received only 1,000 death claims so far and settled 600 of them. This settlement figure accounts for only around 1.5 percent of the total casualty figures.
In fact, close to five months after the COVID-19 outbreak, only 66,700 claims have been settled under various insurance policies. Of this, 66,100 pertain to COVID-19-related health insurance claims.
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Though general insurers have received 1.03 lakh COVID-19 health claims worth Rs 1,560 crore in the last five months, industry sources say the amount of claims are similar to the health claims received in the normal course of business.
Only half of them have been settled and the rest are pending documentation and approval.
Insurers attribute the low claim ratio to the poor insurance coverage in the country. However, officials said that as standard COVID-19 policies are now available, there is a likelihood of claims rising in the coming days.
As of 9:30 am on August 17, India had 2.64 million COVID-19-positive cases and 50,921 deaths. Of the total cases, 6.76 lakh are in active status.
25 percent claims not valid Compared to 6,500 COVID-19 health claims in June, 1 lakh claims were filed in August. However, insurers said that about 25 percent of them are not admissible as they don't involve hospitalisation or fit into other policy terms.
“The average claim size for COVID-19-linked treatment, including hospitalisation, is around Rs 1.4 lakh. Several consumables, including PPE kits, are not payable under traditional medical covers. Less than 35 percent of India's population has health insurance coverage, and, hence, the claims are low,” said the head of claims at a mid-sized private general insurer.
In FY19, as per IRDAI statistics, general insurers incurred Rs 33,676 crore in health insurance claims -- a monthly claims expense of roughly Rs 2,806 crore for the industry. Lower death claims
Of the 1,000 death claims filed so far, claims worth Rs 50 crore have been settled.
The country's largest insurer, Life Insurance Corporation, has settled claims worth Rs 21.15 crore as of August 15. An LIC spokesperson told Moneycontrol that this amount breaks up into 293 claims under 693 policies.
In the life insurance sector, sources said that the average claim amount stands at Rs 5.5 lakh for death claims under term plans.
“We have less than 3 percent insurance penetration in life insurance. So low number of death claims does not come as a surprise,” said the head of distribution at a bank-led private insurer.
As per Insurance Regulatory and Development Authority of India (IRDAI) statistics, there were 333.3 million in-force life insurance policies as of FY19. This means that only 25.7 percent of the country's population was covered by life insurance policies.
A Swiss Re sigma report showed that India's insurance penetration (insurance premium as a percentage of GDP) in FY20 was 3.76 percent against the global average of 7.23 percent.
The global reinsurer had earlier said that there is a big gap in the insurance coverage (pure protection) in Indian households.
The mortality protection gap report for Asia-Pacific by Swiss Re had said that the gap in India was $8,555 billion in 2014. This means that average Indian families were not adequately covered for death compared to the actual annual earnings of the person covered.
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Non-Covid health claims rise as deferred treatments resume - The Economic Times – 17th August 2020
Leading health insurers are seeing a sharp increase in non-Covid-19 related medical claims in July and August, suggesting that patients are slowly returning to hospitals to resume non-essential procedures they had deferred during the initial months of the lockdown. Claims on account of procedures for digestive, psychiatric, musculoskeletal, ophthalmic, ENT, injury, pulmonary and skin conditions had all fallen drastically in April and May, mainly because patients had delayed treatments fearing contagion at hospitals.
Insurers monitoring the data at top health insurance companies said that they are seeing these claims being reported with an increased frequency in July and August, amid surging Covid-19 claims as well. According to Krishnan Ramachandran, MD & CEO, Max Bupa Health Insurance, there has been a 30-35 percent monthly spike in non-Covid-19 claims on account of planned treatments such as maternity, dialysis, chronic diseases, chemotherapy, and heart- related ailments from April.
(The writer is Ashwin Manikandan.) TOP Source
Costly business: Covid-19 and medical insurance - The Telegraph – 17th August 2020
The Covid-19 outbreak in India has bared gaps in public health and the healthcare system. This is borne by revelations that the private hospital bills of insured Covid-19 patients who have not taken a virus-specific policy now include “non-medical” expenses such as the cost of personal protective equipment, face masks, gloves and hand sanitizers — expenditure that is not covered by insurance agencies.
Even at the best of times, treatment at private hospitals is too costly for a vast section of the Indian population. It is, however, a matter of great concern when healthcare — the accessibility and affordability of which ought not to be compromised at the time of a pandemic — is being effectively put out of the reach of even those citizens who can, in fact, afford medical insurance. Insurance companies have cut a sorry figure for themselves during the pandemic; there have been reports of insurers refusing to extend coverage to healthcare workers after the coronavirus outbreak, so much so that the Insurance Regulatory and Development Authority of India had to intervene. Given the ever- mutating nature of the illness, it stands to reason that healthcare policies designed to combat it must take into account the need for flexibility in both treatment and insurance plans.
This, however, has evidently not come to pass. The IRDAI must ascertain whether profit continues to be the overriding motivator in the process of insurance policy-making. Worryingly, exclusion seems to be embedded in other institutional responses to the crisis. Take the case of the notification issued by the West Bengal Clinical Establishment Regulatory Commission: it says that even though private hospitals
42 must grant provisional admission to Covid patients who are unable to make the advance payment of Rs 50,000, healthcare institutes would reserve the right to cancel the admission if the sum is not deposited within 12 hours. There is, admittedly, another side of the problem. Patients’ refusal to pay has forced a number of hospitals to introduce stringent measures in order to recover the costs of treatment. The net result — unsurprisingly — is a severe trust deficit between hospital authorities and patients.
Given the complexity of the problem — it involves questions of patients’ rights to treatment, an inclusive healthcare apparatus as well as financial viability of healthcare hospitals — India would do well to study international models for universal healthcare that strike the right balance among these imperatives. The model for India, however, will have to take into account conditions specific to India: poverty, a poor people to hospital ratio, burgeoning population and so on. Deliberations on the formulation of an equitable, universal health programme must be representative and fully transparent.
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Tips on buying a health insurance policy for parents in the time of Covid - Business Standard – 16th August 2020
Covid-19 has been an eye-opener, especially when it comes to exposing one's health vulnerabilities. Realising that they aren't adequately covered against medical emergencies, many people are now rushing to buy health plans. Says S P Prakash, Managing Director, Star Health and Allied Insurance: "Right from young people in their 30s to senior citizens above 65 are buying policies this season. Usually, with these two extreme categories, insurance buying is not popular." People who have lost jobs or fear losing one, want not only to cover themselves but also their parents against Covid, alongside other ailments.
Don't look for health insurance that only covers Covid. Says Sanjay Datta, Chief-Underwriting & Claims at ICICI Lombard General Insurance: "Buy insurance that covers other diseases as well. Only if you simply cannot afford to buy an all-inclusive health insurance policy, should you buy at least buy a Covid cover right now. Sometimes, seniors may not be able to get insurance due to PED, in such a case don't ignore the Covid cover; it is easier to get."
If your parents are covered under office insurance, and you simply can't afford another policy, can you consider a top-up or super top-up? Some experts say a top-up and super top-up is a good idea for senior citizens, others don't agree. Ajay Shah, Director and Head-Retail business, Religare Health Insurance says, "Top-up and super top-up are good generally, but affordability should not be the basis of that decision. If a person can afford health insurance now but doesn't buy, it will be a big problem in future if a health situation arises. Go bottoms up, get the base cover first."
Prakash says, "We don't have pre-acceptance screening. You have to fill a self-declaration proposal form. If you hide your medical condition, you will not have a good experience when the claim arises later." Always refrain from hiding past and existing medical conditions from your insurer.
(The writer is Bindisha Sarang.) TOP Source
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Does your health insurance cover mental illnesses? - The Financial Express – 16th August 2020
Given the significant emotional and financial consequences of COVID-19 in India, it is important to devote adequate resources and attention to the mental health needs of the people throughout the remaining course of the COVID-19 pandemic and most importantly, to prepare for any such pandemics in the near future. As per various researches and studies conducted in the last three months, a majority of people have shown signs of frustration on some level with the primary reason being not able to do what they normally enjoy doing.
An equal number of people seem to be worried about their own health apart from the health of their loved ones. A survey even revealed that adults younger than 50 were much more likely to report emotional impact of the pandemic compared to older adults. Most people are showing signs of panic and anxiety with a substantial number also reporting sleep disorders.
COVID-19 Bringing Along a ‘Mental Health Pandemic’ One of the most worrying aspects of the pandemic is the rise in poverty and unemployment, both of which are linked with a higher incidence of mental health problems. If not addressed at the right time, mental health problems can even culminate in suicide in many cases. According to a World Health Organisation (WHO) report, close to 0.8 million (8 lakh) people commit suicide every year across the globe, which roughly amounts to approximately one death every 40 seconds.
Considering the severity of the pandemic, even if there is a 10 per cent uptick in the number of suicides each year, the world could witness 80,000 additional suicide-related deaths in a year. It won’t be incorrect to state that coronavirus pandemic has severely affected the psychology of people as health experts report a sharp rise in the number of people seeking mental health care since the COVID-19 outbreak. With online mental health consultations experiencing a surge of 180 per cent in last 4 months, it’s time to work on the mental health of people or else India might face another pandemic amidst a pandemic – ‘mental health pandemic’ – a war within a war.
Time to Cater to Mental Health Needs It is very important that all attempts must be made to reduce the number of incidences of nervousness, fear of contamination, panic attacks, constant reassurance seeking behaviour, sleep disturbance, excessive worry and feelings of helplessness – which are also the major factors leading to depression and anxiety amongst the people. An approach to contain COVID-19 is needed which is based on precautions but which avoids causing panic. It is also important to increase the access of troubled people to counselling and mental health centres and doctors. This may seem difficult, but demands strong efforts nevertheless.
Health insurance – A Reliable Solution With the aim of making mental healthcare available to all, the Insurance Regulatory and Development Authority of India (IRDAI) has asked mental illnesses to be included in all regular health insurance coverage. The IRDAI has made it clear that insurers cannot deny coverage to policyholders who have used opioids or anti-depressants in the past. Also, insurers can’t deny coverage to people with a proven history of clinical depression, personality or neurodegenerative disorders, sociopathy and psychopathy. With the latest announcement, IRDAI aims at making mental healthcare available to all.
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In line with the directions of IRDAI, some insurers have already started customizing products that cater to the specific needs of people suffering from mental illnesses. Two prominent insurers, Reliance Health Insurance Company and Max Bupa Health Insurance, have already introduced health plans which are specifically designed for people suffering from mental illnesses.
Mostly, in-patient hospitalisation for mental disorders is covered under regular health plans. However, outpatient counselling or therapy is only covered if the plan offers OPD benefit. In case of a pre-existing mental disorder, the insurer is at liberty to treat it as one and decide on the waiting period, usually 2-3 years. If you are looking for a mental illness cover, check if the disorder requires hospitalisation or can be treated through therapy and medication. In case of the former, go for a comprehensive indemnity plan that covers hospitalisation, while the latter will require a plan that also offers OPD.
One of the most recent plans that provide comprehensive OPD cover for Psychiatric Illness and other ailments within the base plan is Digit’s OPD Policy (Non-Network). The policy offers OPD cover up to Rs. 10,000 and is available in two variants – PB OPD Family and PB OPD 1 Adult. For now, the plan is available in two sum insured options – Min 5 Lakh and Max 10 lakh, you may choose any sum insured from R. 5 lakh to Rs. 10 lakh.
Max Bupa’s GoActive plan and Manipal Cigna’s ProHealth Insurance also cover conditions related to mental illnesses, though these products are relatively less popular. Similarly, HDFC Ergo’s Critical Illness Plan – Platinum covers a popular mental disorder – Alzheimer among 15 other critical illnesses. Star Health and Allied Insurance’s Star Special Care plan covers autism in people from 3 to 25 years of age.
(The writer is Amit Chhabra.)
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Covid-19 health covers received positive response but reinsurance remains a challenge - The Hindu Business Line – 16th August 2020
The recently-launched standalone health covers against Covid-19 have seen a tremendous response from customers but reinsurance support continues to be a challenge for most insurers.
“There is no reinsurance support for the product across the industry. It is completely dependent on the insurer’s discretion and risk profile,” said an executive with a private sector general insurance company, but said that a lot of people have purchased the policies.
Another insurer added that they are in discussions with reinsurers for possible support but it has been difficult till now, which in turn has impacted pricing for many firms.
“Overall, health is retail business without much reinsurance support. The same goes for the Covid-19 covers launched,” noted an executive with a reinsurance firm.
Corona Kavach To make treatment for Covid-19 more affordable for people, the Insurance Regulatory and Development Authority of India (IRDAI) had asked insurers to come out with two standard health insurance products, which were launched on July 10. The Corona Kavach is an indemnity product while the Corona Rakshak is a benefit policy.
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“There is not much reinsurance available for health insurance. It is mostly written on retention basis so reinsurance industry is also trying to understand the experience on health insurance,” said PC Kandpal, Managing Director and CEO, SBI General Insurance, but stressed that it has not proved to be a disincentive for insurers from offering health insurance products.
He said the response to the two policies has been positive. The SBI General Insurance is also waiting for these to be made available on group platforms for a larger audience.
S Prakash, Managing Director, Star Health and Allied Insurance, however, added that reinsurance support is available for both the policies. “Reinsurance support is available for Covid-19 policies; it depends on how the insurers are placed in pricing and servicing the policy,” he noted.
Star Health and Allied Insurance has sold over 1.5 lakh Corona Kavach policies and nearly 25,000 Corona Rakshak policies.
(The writer is Surabhi.) TOP Source
Now pay your health insurance premiums in instalments – Times Now – 16th August 2020
With sporadic lockdowns in different parts of the country, COVID-19 outbreak has impacted businesses across sectors, and one major fallout of this has been employees dealing with pay cuts and job loss.
In a bid to offer some relief to policyholders dealing with liquidity crunch, recently, the Insurance Regulatory and Development and Authority of India (Irdai) asked all general and standalone health insurers to give policyholders the option to pay health insurance premiums in instalments.
Naval Goel, CEO & Founder of PolicyX.com said: “Health insurance on monthly mode is a great move. Earlier it was there in term plan only and currently in online business more than 90 per cent customers prefer monthly mode. So we can expect the same with health insurance as well. This is definitely a good option for customers.”
Bharti AXA General Insurance Co Ltd, Bajaj Allianz General Insurance Co. Ltd, ICICI Lombard are a few of the insurers who have extended the premium payment option for customers.
Recently, Bajaj Allianz has announced premium instalment facility available with their health insurance product “Health Guard”. Health-Guard which is available on both individual and family floater basis will now have the premium instalment option on a monthly, quarterly, half-yearly and annual basis as per the customer’s requirements.
Tapan Singhel, MD & CEO, Bajaj Allianz General Insurance said, “We have been witnessing a rapid rise in healthcare costs year on year and it has become imperative for citizens of our country to have a health insurance cover. Providing the option to pay premiums through instalments for our comprehensive health insurance product - Health Guard, makes the health insurance cover more affordable. This should hopefully encourage more customers to opt for health insurance which I believe should be a critical part of the financial planning of every family, to lead a healthy life and a life of dignity”
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How does the payment process work? If the customer opts for the instalment option, then the receipt of the amount received as down-payment at the time of policy issuance will be sent to the customer. On payment of each subsequent instalment, a receipt for instalment amount paid will also be sent to the policyholder. If the customer is unable to make the instalment payment within the due date, then a 15 days grace period is extended to the insured. If the insured makes the payment within the grace period, he/she would not lose the accumulated continuity benefit with respect to the waiting periods or cumulative bonus accrued.
Payment of claims in monthly instalments premium If you choose the monthly payment mode for paying the premium of your health insurance cover and after paying just 3 or 4 instalments, you need to file for a claim, under such a scenario, the insurer will be liable to process your claim. However, you will have to either pay the remaining premium in one go to the insurer or the insurer may deduct the remaining premium from the total claim amount payable. The instalment-based premiums will not impact the claim settlement process provided you either pay the remaining premium upfront or the balance premium would get deducted from the claim amount by the insurer.
(The writer is Aparna Deb.)
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India takes first step towards universal health coverage with Digital Health Mission launch – The Print – 15th August 2020
The National Digital Health Mission, that Prime Minister Narendra Modi announced Saturday in his Independence Day address, is envisioned as the first step towards Universal Health Coverage.
A digital health ecosystem will be put in place, complete with a personal health ID for every Indian, identifiers for doctors and health facilities and personal health records. All of this will be accessible through an app or a website with the health records “ownership” lying with the individual, as ThePrint had been the first to report on 23 July.
To be led by the National Health Authority that is also the administrative authority for the Pradhan Mantri Jan Arogya Yojana, the Rs 144 crore National Digital Health Mission (NDHM) will need all government health programmes, such as Ayushman Bharat and the tuberculosis programmes, to integrate with it and issue health IDs to beneficiaries.
While the health ID is not mandatory, the government is hoping that the feature will attract more users to it since it allows a person online access to all their health records right from birth. There will be an option of the ID being linked to Aadhaar but it will not be mandatory unless the person wants to avail of any government subsidy scheme.
Pilots to start by month end According to its strategy document, the NDHM’s vision is: “To create a national digital health ecosystem that supports universal health coverage in an efficient, accessible, inclusive, affordable, timely and safe manner, that provides a wide-range of data, information and infrastructure services, duly leveraging
47 open, interoperable, standards- based digital systems, and ensures the security, confidentiality and privacy of health-related personal information.”
In its first phase, the mission will pilot in Andaman & Nicobar Islands, Chandigarh, Dadra & Nagar Haveli and Daman & Diu, Lakshadweep, Ladakh and Puducherry. According to the original schedule, this was supposed to have started before the prime minister’s announcement, but there is a slight delay now and officials are hoping to get it off the block by the end of August.
The strategy document that was approved some time back says: “Phase 2 will be taking forward the pilot in additional States and expand the service bouquet. Phase 3 will target nation-wide roll-out, operationalizing and converging with all health schemes across India along with promotion, on-boarding, and acceptance of NDHM across the country.”
Safety and privacy of health data Theoretically, health data is generated every time a doctor writes a prescription, every time an individual self medicates and every time the person undergoes a diagnostic test. Most of this data currently either exists in cumbersome and poorly kept files by patients, is not recorded or simply lost. The mission will require doctors/hospitals to upload a digital copy of any health reports being physically shared with the patient to enable creation of longitudinal health records.
“NDHM will implement a federated health records exchange system that will enable patient data to be held at point of care or at the closest possible location to where it was created. Health records will be accessible and shareable by the patient with appropriate consent and complete control of the records will remain with the patient,” says the strategy document.
“An appropriate digital consent framework as per standards specified by NDHB (leveraging DigiLocker consent management framework to the extent possible) will be adopted for consent management,” it further outlines.
The document categorises health data into three distinct layers.
Electronic Medical Records (EMR) — This refers to systems that are used within a hospital or a clinic to support patient diagnosis and treatment and are transaction focused. NDHM requires these systems to be updated to support standards and provide access to patients’ data.
Electronic Health Records (EHR) — EHRs contain records for a patient across multiple doctors and providers and is used within a Healthcare system (like say across a state government) to provide better care for patients.
Personal Health Records (PHR) — PHRs enable patients to compile, update and keep a copy of their own records that can help them better manage their care and are person focussed.
It will not be possible to have access to digital health records without creation of a health ID.
Governance structure The mission will keep two separate arms, according to the National Digital Health blueprint. One arm will be for regulation and other for implementation and operational management. The Mission Steering Group, under the chairpersonship of the Union health minister, will oversee and guide the NDHM. Its members will include ministers of women and child development, social justice and empowerment, AYUSH and information technology, the principal scientific advisor, Member Health (NITI Aayog), secretaries of health, expenditure and information technology, the National Health Authority (NHA) CEO and others.
An Empowered Committee will be set up under the chairpersonship of the health secretary, that will take necessary policy-level decisions, help the mission with coordination with different stakeholders and engagement with different ministries and departments to ensure their participation. Its members will include NITI Aayog CEO, secretaries of women and child development, social justice & empowerment,
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MeitY, AYUSH, and expenditure as well as NHA CEO and directors general of health services and the National Informatics Centre.
(The writer is Abantika Ghosh.) TOP Source
Insurance companies reject claims of mild Covid patients - The Telegraph – 15th August 2020
Many Covid-19 patients with mild symptoms and admitted to private hospitals or satellite facilities are having their cashless insurance claims rejected because the insurance companies think they could have been treated at home.
Insurance companies allege that many hospitals are admitting such patients because they need minimum treatment but the healthcare units can earn through diagnostic investigations.
Public health experts and officials of various hospitals, however, said the purpose of taking out a medical insurance policy gets defeated if it is of no use during the pandemic.
“As per the available documents/medical records, indication for the hospitalisation cannot be established hence cashless approval would not be possible at this juncture,” a Covid-19 patient who had been admitted to a private hospital in Calcutta received this message from the insurance company before he was discharged. The man was left with no option but to pay the entire amount from his pocket.
In another case, a New Alipore resident alleged that his parents who had tested positive for Covid-19 were taken to Belle Vue Clinic for admission earlier this month. His father is 63 and mother, a diabetic, 61.
“Belle Vue officials said that since my parents had mild symptoms, the cashless facility might be denied to them if they got admitted to the hospital.They suggested that my parents be admitted to the satellite facility run by Belle Vue,” said businessman Deepak Gupta.
“A CT scan my father underwent before admission showed pneumonia. So, we got both admitted to the satellite centre. We were scared that if something happened to them at home and the doctor was not available over the phone, we might not be able to hospitalise them immediately,” he said.
Later, the third-party administrator (TPA) said the claims were inadmissible. “The TPA told me I got my parents admitted only to get some investigations done. I told them that I could not have put their lives at risk by getting them admitted to hospital in this situation just to get some investigations done,” Gupta said.
“The present claim is for treatment of Covid-19 positive. Patient is mainly admitted for investigation and observation purpose and treated with oral medicine and certificate given by treating doctor and discharge certificate revealed that it seems that present treatment is possible in an OPD basis or any institutional quarantine centre,” the TPA had written to Gupta.
TPAs handle claims for insurance companies.
Finally, Gupta had to pay Rs 2.25 lakh to get his parents discharged. He said he would file reimbursement claims with the insurance company.
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The health ministry and state government have advised asymptomatic Covid patients or those with mild symptoms to stay at home or satellite facilities so that hospital beds remain free for patients with moderate or severe symptoms.
“But there are many asymptomatic patients who don’t have isolation facilities at home. There are others who have family members with co-morbidities, and so they want to be admitted,” said Sudipta Mitra, the chief executive of Peerless Hospital. “We have about 150 Covid patients at our hospitals, of whom around 35 are asymptomatic who have no home isolation facilities.”
Officials of various private hospitals attributed refusals by insurance companies to confusion and mistrust.
“Some insurance firms have issued clear guidelines for allowing cashless facilities for asymptomatic and mild symptom patients even if they are admitted at a satellite facility. Big insurance companies like National Insurance should come out with such clear guidelines, otherwise TPAs are confused over allowing claims,” said Pradip Tondon, CEO, Belle Vue Clinic. He said the hospital was frequently having patients whose cashless claims were rejected by insurance companies.
Medica Superspecialty Hospital chairman Alok Roy said there were frequent problems over insurance claims for patients admitted at his hospital. Insurance companies said hospitals needed to have more transparency. “The advice for admission should be followed by an active line of treatment which is possible only in a hospital set-up. Otherwise, the claim might be inadmissible if it is only for quarantine or isolation.
Hospitalisation should have a valid reason,” said Saurav Kariwala, assistant manager (medical), National Insurance Company Ltd, Calcutta. An official of a private insurance company said there were homecare packages.
“There are telemedicine and wellness cells of insurance agencies which support such patients (asymptomatic patients or ones with mild symptoms),” said Abhijit Banerjee, manager, claims department, Star Health Insurance.
(The writer is Sanjay Mandal.)
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Onus to take action against hospitals denying cashless service on insurers: IRDA - The Economic Times – 14th August 2020
An insurance company can take action against a hospital for demanding advance from a policy holder who is supposed to get cashless service, an official of insurance regulator IRDA said on Friday.
In a recent circular, Insurance Regulatory and Development Authority (IRDA) has put the onus of taking steps against medical establishments for deficiency in service on the insurer, the official said.
There has been a sharp spike in complaints post COVID-19 outbreak that private hospitals are demanding huge advance before admission even from patients having cashless medical insurance.
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In the wake of such complaints, IRDA issued the circular on cashless service to policy holders by hospitals, the official told PTI. "Where any network provider (hospital) denies cashless facility and deviates from agreed terms of the SLA (service level agreement), insurance company shall take an appropriate action against such network providers," the circular said.
One of such "appropriate" actions is blacklisting the erring hospital, a senior official of an insurance firm said. "But any stringent action like blacklisting a hospital will also inconvenience policyholders as, in that case, the number of network hospital will come down," he said.
The circular issued late last month also mandates health insurance service providers to immediately report to the appropriate government agencies of the state concerned, when policyholders' interests are adversely affected because of the conduct of network hospitals.
To address the problem of alleged inflated billing and advance deposit by hospitals, what is necessary is the intervention of the government, the official of the insurance company said. The Kolkata-based Association of Hospitals of Eastern India said that its members will not demand advance from patients having cashless insurance policies, but up to Rs 50,000 will be sought from those without it.
West Bengal Clinical Establishment Regulatory Commission, a regulatory body for private hospitals, has also permitted private hospitals to seek an advance of a maximum of Rs 50,000 from a patient.
The Association of Healthcare Providers (India), which claims to represent a vast majority of the country's private hospitals, has suggested that the fee per day should be fixed at Rs 15,000 for patients in general wards, Rs 20,000 per day in wards with oxygen facility, and Rs 25,000 a day for isolation ICUs.
The AHPI has also proposed that the rate per day for isolation ICUs with ventilator support can be fixed at Rs 35,000 per day. Association of Hospitals of Eastern India president Rupak Barua had said they agree to the rates of AHPI.
An official of a third-party administrator (TPA) said that hospitals earlier argued that inadmissible components such as PPE and gloves are not paid by patients and advances were sought to cover those risks. He said that there is no clarification from IRDA about insurance coverage of PPE, gloves and other kits specifically required for COVID patients, as traditional medical policies put those as "consumables" which is not covered. However, such items are covered in coronavirus specific insurance policies, he said. TOP Source
Covid-19: Health insurance is your best bet against steep medical costs - Hindustan Times – 13th August 2020
It’s been a few months since the world woke up to the realization that a pandemic was underway. Although a few countries have managed to flatten the curve, the virus is still raging in India. Pharmaceutical giants are racing against time to develop an effective panacea for COVID-19, but the proverbial silver lining remains obfuscated. Vaccine trials are long arduous processes, and it will be several months from now before you will be able to get yourself vaccinated at a healthcare center near you.
Shunting citizens in and out of their homes by imposing and re-imposing lockdowns is also not a plausible solution because of the colossal economic damage triggered by the lockdown. Income streams continue to dwindle and a large chunk of the population is being compelled to rely on their savings to make ends meet. The financial distress coupled with the fear of being infected is causing many to have sleepless nights.
Skyrocketing medical costs Several state governments including Delhi, Telangana, Tamil Nadu, Rajasthan, Haryana, Uttar Pradesh, and Maharashtra have capped the cost of COVID-19 treatment in private hospitals. The Supreme Court, however, has refused to fix a countrywide upper ceiling. Hospitalization costs, for both COVID and non-
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COVID patients in other states, have ascended at an alarming rate in the last few months. The highly- contagious nature of the virus has made it mandatory for doctors, nurses, and hospital staff to use PPE kits, N-95 masks, face shields, and shoe covers. These medical consumables are causing hospital bills to escalate by thousands.
For COVID-19 patients who are hospitalized, the scarcity of quarantine spaces is translating into steep healthcare costs. Hospital wards have been forced to decrease the number of patients due to social distancing protocols making hospital stays a luxury. It is no secret that India’s health infrastructure was already miles away from being satisfactory. Now, with the caseload in the country seemingly increasing by way of arithmetic progression, faultiness in medical care services has emerged. Access to medical facilities is now a vicious demand and supply game with private hospitals charging in lakhs for treating of COVID patients.
To put things into perspective, the average cost of treatment in private hospitals in Delhi in an isolation ward is ₹1,26,000, ICU with a ventilator is ₹1,96,000, and ICU with a ventilator is ₹2,31,000 (*charges inclusive of PPE), as per a report published in The Financial Express.
Rising awareness about insurance policies All of these factors have catalysed an increase in awareness about buying adequate health insurance coverage. Recently, the Insurance Regulatory and Development Authority of India (Irdai) made it compulsory for general, life, and health insurance companies to offer standard COVID-19 products. All insurers have been urged to launch short-term COVID-19 policies with the same names and uniform features.
The IRDAI released guidelines for ‘Corona Kavach’ and ‘Corona Rakshak’ with uniform features, terms, and conditions. General and health insurers have to mandatorily provide the reimbursement-based standard COVID-19 product, while benefit-based products are optional.
Reliance General Insurance offers a slew of unique benefits as part of its policy, so that you can allay your fears about healthcare in these stressful times. Some of the benefits include extra cover – you can avail a 13-month cover for a 12-month premium and a 26-month cover for a 24-month premium, emergency hospitalization cover, and an additional sum insured. For instance, you can get an additional cover of Rs 1 lakh for a Rs 3 lakh cover, an additional cover of Rs 2 lakh for a Rs 5 lakh cover, and so on. What’s more, you can avail of benefits such as hospital room rent and road ambulance charges, organ donor expenses, and AYUSH benefits.
If you haven’t invested in a good health insurance plan for your family, now is the time to do so. Not only will it be easier for you to get proper medical facilities, but also save you from emptying your financial reservoirs.
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MOTOR INSURANCE
Motor insurance: Taking steps to prevent and minimise loss – Financial Express – 21st August 2020
In order to reduce loss ratios in general insurance, especially in motor insurance, a working group of the insurance regulator has recommended setting up a not-for-profit organisation which will promote safety and loss prevention.
The 10-member working group of Insurance Regulatory and Development Authority of India (Irdai), which was set up in December 2019, has underlined that it would be in the interest of both the insurer and the insured to ensure that losses are prevented in the first place and should losses occur, the insured
52 take immediate steps to minimise it. This report said this proposed body, to be promoted by Irdai as the industry, should initially work in the areas of property and motor insurance.
“Loss prevention and minimisation activities are part and parcel of what the insurers do, as it helps improve their claims experience in various ways. Starting from risk assessment to payment of claims under a policy, insurers seek to take steps to prevent and minimise losses. They take the help of experts to carry out risk assessment wherever required and suggest risk improvements,” the report says.
Loss prevention in motor insurance The report has highlighted that the body should map high exposure accident spots across the country by collaborating with police and insurers for road safety campaigns. It should organise safe driving training programmes and collaborate with automobile manufacturers on better safety aspects in vehicles and collaborating with insurers and police to reduce stolen vehicles and quick recovery of and disposal of stolen vehicles.
In motor insurance, surveyors and investigators play an important role in loss control, minimise fraud and control inflated claims. The report says the findings shared by surveyors need to be captured and analysed. At present, each insurer has its own approach to data analytics with limited data available in silos.
The Insurance Information Bureau of India (IIBI) has been providing claims search functionality with wide usage among industry, with hits crossing the one-crore mark in FY20 helping in substantial savings for the industry. “However, enriching the claims data available in the repository with better quality data as well as speedier submission will help the industry further—there are still instances of dependence on the insured’s declaration to reckon no claim bonus,” the report says. The report has suggested linking motor insurance premium to traffic offences and identifying uninsured vehicles and following it up with state enforcement agencies towards ensuring that more vehicles are insured.
Use of telematics The report says telematics is yet to be popularised. In telematics, motor insurance can be based on data on driving habits of customers like speed at which it is being driven, distance travelled and usage of the car captured through a GPS-enabled device fitted inside your car. Based on the data, insurers can determine the risk profile of the customer and tweak the motor insurance premium accordingly. Telematics can be used for real-time navigation, roadside assistance, and vehicle tracking. In fact, telematics will help insurers in better segmentation of customers by assessing risks accurately. It will also help insurers estimate accident damage more accurately and reduce fraud claims by analysing driving data.
Garage Network Master The working group has suggested setting up a Garage Network Master for standardising the vehicle repair cost. It will provide the average repair costs of each part, average painting costs and average turnaround times for each type of repair which can be accessed by the industry for ready comparison. The repairers can be graded on the basis of their performance and low-ranking garage personnel can be involved in orientation and training activities to enhance their skills and knowledge. Black listing of suspicious garages can be done by collaborating with IIBI and the General Insurance Council,” the report says.
(The writer is Saikat Neogi.) TOP Source
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Does your motor insurance policy cover flood-damaged car? – Live Mint – 20th August 2020
Rainfall lashed the National Capital Region in the last two days. Some places in NCR saw a flood-like situation and the pictures of submerged cars and other motor vehicles were circulating all over the social media platforms.
The loss caused by water to the cars is expected to be quite high. The big question is if your car insurance policy covers the damage caused by flood water. Well, if you have bought only the mandatory third party insurance cover, the loss caused by a flood or any natural calamity will not be covered. In case you have a basic comprehensive plan, it will cover partial losses due to flood. It will not cover loss to the engine.
The hydraulic lock -through which water enters the engine and stalls it -is the most common car damage in case of a flood. An engine is the heart of the car and it costs a fortune if the water enters your car engine.
What can you do to cover your car's engine? You can buy an 'Add on' cover called 'Engine Protection' to cover the losses to engine due to flood water. The Add on is designed to cover damages caused to the car’s engine.
Car’s engine and its parts such as pistons, connecting rods, etc. can be repaired or replaced by your insurer. A basic comprehensive car insurance policy does not provide insurance for car engine damage. Engine Protection add on is meant to cover this exception. Damages to the engine occurring because of an accident or natural calamities such as a flood are covered by this Add-on.
Insurance advisors ask consumers to always go for a comprehensive car insurance plan with Engine Protection Add On.
"Most customers do not purchase the add on cover in places like Delhi due to lower chances of a flood- like situation. The customers also restrain from buying this add on as it requires them to shell out an extra cost.
For an instance, a five-year old Fortuner car may cost somewhere between ₹8,000 to ₹9,000 to buy an Engine Protection Add on," says Gyanendra Gupta, insurance consultant, Citrine Financial Advisors, a Delhi-based wealth management firm. But, for a complete coverage and to prevent paying for heavy engine damages caused due to heavy monsoons, consumers must buy this add on," Gupta adds.
Here are some tips to follow when your car is submerged in water: Don’t switch on the ignition or attempt to start the car by push-starting it. Disconnect the battery and tow the car to the garage. Do not attempt to start the car even after the water has receded. Check your car brakes for their functionality as they tend to be affected when water enters the brake discs, lines, or pads. Ask the mechanic to rust proof your care at the garage
(The writer is Avneet Kaur.)
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IRDAI unlikely to revise motor third party premium this year – CNBC – 20th August 2020
The Insurance Regulatory and Development Authority of India (IRDAI) is unlikely to make any revision to the premium rates for motor third party policies this year. Earlier, the insurance regulator on March 27 had extended validity of existing premium rates beyond March 31, 2020, until further notice.
Any motor insurance policy has two major components: Own damage cover and third party cover. Own damage cover helps insured stay covered against the damages caused to the vehicle due to accidents like fire and theft.
Third party offers coverage against legal liability caused to a third party due to your car or vehicle. In simple terms, third party insurance covers injury or death caused to a third person by your vehicle along with damage caused to a property.
A status-quo on motor third party premium rates would come as a setback for general insurance companies which were expecting an upward revision in motor third party rates. On the contrary, it would be positive for auto companies which are already struggling with an unprecedented decline in sales and an upward revision in motor third party premium rates would have made things worse.
Every year the insurance regulatory body assesses the claims data for the previous financial year in order to make an upward or downward revision in motor third party premium rates for the coming financial year.
This year as well, IRDAI had floated a consultation paper suggesting an average 10 percent hike in motor third party premium rates across categories, which according to sources won’t be implemented now as a status-quo is likely to be maintained.
According to sources, the primary reason for not revising motor third party premium rates has been a drop in motor claims in the current financial year so far. Also, sources added that the regulator in not in the favor of burdening the auto industry with higher premiums which would discourage new sales.
(The writer is Yash Jain.) TOP Source
Motor insurance in India has a new hope in digital – Forbes – 18th August 2020
India’s push for digitizing its financial services led by the ruling federal government’s Digital India initiative and its bold steps towards commitment to financial inclusion is getting many global players interested.
A growing population of 1.38 billion and the soaring aspirations of India’s populace are presenting the opportunity for motor insurance companies to tap large volumes of prospective consumers.
According to the Indian insurance regulator, the motor insurance business reported a growth rate of 8.91% to take a share of 38.08% of the total general insurance business in India in 2018-19. Just the previous year to 2018, latest motor insurance premium figures revealed it was the best performing non-life insurance segment in India with gross direct premiums of INR 59,246.11 crore.
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We spoke to top digital insurance players in India to understand changing trends in the way Indians buy motor insurance and how the focus on digital offerings is disrupting a fragmented insurance market in the country.
Challenges Facing Motor Insurance In India Driving a motor vehicle without insurance in a public place is a punishable offence states the Motor Vehicles Act, 1988. Under this Act, the Indian government made third-party motor insurance statutory, which means the owner of the vehicle is legally liable for any injury or damage to third-party life or property caused by the use of their vehicle in a public place. This has forced consumers to mandatorily purchase motor insurance, but there are many slip ups in the process say insurers.
Negligence Sanjay Datta, the chief of underwriting, claims & reinsurance at ICICI Lombard, which has the highest market share in motor insurance among private players, finds negligence among the top reasons for consumers faulting on motor insurance covers.
Customers tend to buy insurance while buying a new vehicle as a compliance measure and some of them even continue to renew their insurance policies for a couple of years later. However, beyond 3-4 years, they feel insurance is no longer required. This behavior is more prevalent outside metro cities where compliance pressure isn't as much.
A metro city India in is a city with a population of at least 2 million. New Delhi, Mumbai, Chennai, and Kolkata are all counted as India’s metros.
Second, the fierce competition has turned the category into discount wars. Most customers focus primarily on prices and at times are unaware of the various features and service quality aspects of their policies such as the claim settlement ratios, among others.
Lack of Discipline Bisheshwari Singh, the chief marketing officer of Universal Sompo General Insurance, thinks the Indian auto insurance consumer is not really risk-averse but risk-loving, considering at least 58% vehicles registered in India are still uninsured despite third-party insurance being mandatory.
Singh says consumers must understand the cost of repairs become soaring high in cases of accidents and that there is a reason behind third-party insurance covers being mandatory.
The majority of Indian consumers without an insurance cover are commercial vehicles & bike owners, with a heavy skew in semi-urban & rural geography as compared to metro and urban customers, explains Abhishek Tiwari, the CEO of iAssure.
Tiwari finds private car owners in metro and urban locations are relatively more disciplined but cautions both bike and commercial vehicle customers in the same geographies need better vigilance and monitoring.
Low Level of Awareness Adarsh Agarwal, the appointed actuary at Digit Insurance, explains a lot of the vehicles in India are uncovered or under-covered because third-party liability cover, which is mandatory, does not offer coverage for any damage to the vehicle itself. He sees a huge opportunity for insurers to raise more awareness on why auto insurance is useful, and to offer relevant products and covers and build simple and hassles-free claims processes. iAssure’s Tiwari too thinks lack of awareness is among the prime reasons for the current state of motor insurance adoption by Indians.
Complex Financial Jargon Universal Sompo’s Singh believes insurance is considered as a technical product in India and probably that is the reason for its lower penetration.
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“The industry should opt for designing the products with very simple wordings so that there shall be real consensus in them. Transparency at the time of claim is another very important aspect and there should be customer delight at the time of claim settlement,” Singh says.
Ways to Buy Motor Insurance in India Motor insurance is a way to avoid financial strain in the face of an accident, natural disaster or any other unforeseen incident. And it is a must-have in a heavily populated country such as India where 4.67 lakh road accidents happened in 2018 alone.
Buy Your Insurance Cover via an Intermediary To buy a motor insurance cover, the Insurance Regulatory and Development Authority of India (IRDAI) suggests consumers only go through the insurance product life cycle via a regulator-approved intermediary such as a corporate insurance broker or an individual insurance agent.
This intermediary assists consumers from the point of sale through policy servicing, up to claim servicing. He or she is responsible for providing all material information with respect to a proposed cover with complete disclosures and transparency. When choosing your insurance broker, there are nine top points to keep in mind, according to the IRDAI.
Ask for and check whether the person holds a valid license and is authorized for the particular business. The intermediary should be licensed to sell life insurance or general insurance or both.
Check whether he or she has a good knowledge of various insurance products or policies.
Ask questions and understand the policy terms and conditions of the policy the intermediary is trying to explain to you.
Ask for brochures and sales literature pertaining to the product you are considering. Get the intermediary to explain the full facts of the products, scope of cover and exclusions.
Insist on quality delivery and timely service. You can judge this by the turnaround time of the intermediary during the period of pre-sale when he or she is dealing with you.
Fill up the proposal form yourself. Never sign a blank proposal form. If you find terms in the proposal form that you do not understand, ask the intermediary to explain it to you.
When you make premium payments through an intermediary, check whether he or she is authorized to do so by the insurance company and insist on a duly-signed receipt.
After the receipt of your policy, go through it thoroughly and if you do not understand certain terms contact your intermediary and get them explained.
Ask the intermediary questions about documents and procedures involved in making a claim and understand them completely. In the event of a claim, there may be other agencies you have to deal with apart from the insurance company.
Buy Your Insurance Cover Online The “DIY” approach is disrupting the way insurance is consumed in India. Consumers are now exploring three main avenues for their motor insurance covers and insurance companies are putting their best foot forward in expanding their presence in all the three spaces.
Direct Purchase Via Insurance Companies’ Websites For consumers who are loyal and satisfied with their previous insurance covers and would like to continue their policies with the same insurance companies, the easiest way available digitally is for them to visit their preferred company’s website.
The online purchase and claims settlement process is very simple if the consumer has the Indian government-mandated Aadhaar Card, which is considered a valid proof of a person’s identity, place of residence, mobile number and linked bank accounts.
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The biggest advantage of an online process is that it encourages a consumer to take extra effort to clearly understand all aspects of the insurance policy they are opting for. It also puts an onus on the consumer for the decisions they make with respect to their choice of the policy cover.
More ownership means more vigil, which may be a welcome change for an industry that often experiences negligence by consumers in India.
Consumers interested in experimenting with a new insurance policy cover too can explore directly on various insurance company websites and get specific responses to their queries from help and support teams on each of the websites.
All insurance companies registered with the IRDAI offer purchase of insurance covers on their websites. The list is readily available on the IRDAI website.
Purchase Via Online Marketplaces Financial products and services are being tailored to meet specific user needs and are being delivered on demand through apps or marketplaces.
India has seen a spurt of online marketplaces that enable consumers to study numerous policies and make informed decisions based on in-depth analysis.
Online marketplaces offer two advantages: Wide Range of Options Consumers in India are excited about the wide range of options that online marketplaces offer, whether it is for a financial product or a service. With respect to motor insurance, crucial details such as compulsory deductibles, no claims bonus and the claims settlement ratio can be compared with the click of a button on online marketplaces. This helps consumers make quick decisions without the threat of being cheated or misled.
Ease of Payment Processes Most online marketplaces in India assist consumers in making advanced digital payments and offer various options to pay for their policies. For example, users can pay via any means of digital payments— debit cards, credit cards, digital wallets or direct bank transfers—bringing transparency in the payments process. Emerging trends such as cashbacks and systematic monthly payment plans make buying an insurance policy on online marketplaces interesting.
Among some of the popular online marketplaces for the sale and purchase of motor insurance policies in India are BankBazaar, Coverfox, InsuranceDekho, PolicyBazaar and PolicyX.
Purchase Via Global Technology Companies Offering Insurance Global technology companies have identified financial services, such as the payment space, and specifically digital wallets and insurance, as a way to convert their large databases of consumers into diverse business opportunities.
2020 marked the entry of three robust global technology companies selling motor insurance in India.
Flipkart is India’s most successful startup. Paytm started as a digital wallet and has now expanded its scope to a full-fledged bank, asset management company and insurance seller. Amazon is the new entrant in India.
Traditional insurance companies understand the reach global tech giants provide and are racing for collaborations with the India-specific operations of these firms. Amazon, in its collaboration with Acko General Insurance, announced its plans to sell motor insurance policies via its Amazon Pay platform. Subscribers of the Amazon Prime services would get an extra discount of up to INR 999 on their policy cover and additional benefits such as outstation assistance and consumables for INR 40, among others.
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These technology companies eyeing a pie of the large insurance market in India indicates how rapidly the market is evolving to suit consumers’ changing preferences and provide them the ease of access and processes.
Future is in Going Beyond the Conventional Irrespective of the distribution channels deployed to sell an insurance cover, the onus to create consumer-friendly motor insurance policies and offer them to consumers in the easiest possible way still lies on India’s motor insurance companies.
Companies are going beyond their conventional approach to reach out to consumers in a way never experimented before. Five such examples include:
Technology Adoption Beyond the Basics The insurance companies need to go beyond telesales, virtual sales assistants, chatbots and voice bots and development of artificial intelligence to embrace blockchain technology for sales and after sales, says Universal Sompo General Insurance’s Bisheshwari Singh.
He bats for fully-equipped and upgraded online portals for customers and channel partners for issuing quotations, capturing and authenticating material information, collecting premium, issuing policies, claims intimation, submission of claim documents and tracking of claims.
Risk-based Solutions Realizing the latent consumer need and potential of technology, companies are designing risk based solutions for motor insurance different from the conventional motor insurance so far.
Sanjay Datta of ICICI Lombard explains three ways in which risk-based solutions are being offered to enhance the consumer experience of buying motor insurance.
Based on telematics behavior, a customer can now enjoy better premiums.
A customer with relatively low vehicle usage can buy a limited kilometer plan and choose to pay considerably less than a conventional plan.
A customer can buy a single policy for all vehicles registered under their name, leading to ease of keeping the insurance policy and hassle-free renewals for all vehicles simultaneously.
Usage-based Policy Models Shanai Ghosh, the Executive Director and CEO of Edelweiss General Insurance, believes usage-based policy models are really the way ahead to give value to the consumers without compromising on profitability.
Edelweiss General Insurance started operations two years ago, with auto insurance being a key segment and has since then introduced new age offerings for its customers.
The company’s recently launched driver-based insurance model called SWITCH, in which the insurance is calculated on the age and experience of the driver, uses a pay-as-you-use model that allows the customer to pay the premium only on the days they use the vehicle. This offers significant cost savings and convenience.
Customers can use the insurance company’s app to switch their policy cover on and off depending on whether they are driving that day. Also, while the policy covers accidental damage when it is switched on, vehicles are covered through the year against fire and theft, even if the policy is switched off at that time.
Zero Touch Services People have gradually started looking at contactless or zero touch services where they do not have to come in physical contact with a third party. Insurance companies such as Digit, which has a 2.6% overall market share for motor insurance in India as of June 2020, offers a zero touch experience with its pre- inspection benefit, paperless insurance and cloud-based service.
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Digit’s Adarsh Agarwal says this approach helped the company settle claims and issue policies even during the lockdown months due to the coronavirus pandemic.
Telematics An increasing number of commercial vehicles are opting for telematics solutions owing to inefficiencies and challenges in the existing transporting ecosystem. iAssure’s Abhishek Tiwari thinks with increased adoption of FASTag and digitisation of process at Regional Transport Offices, there might be huge data insight that can be made available towards making consumer-friendly products.
FASTag is a simple, reloadable tag to collect electronic toll via automatic deduction of toll charges on National Highways of India.
(The writer is Aashika Jain.)
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CROP INSURANCE
Tamil Nadu registers 45% increase in kharif crop insurance coverage – The Times of India – 19th August 2020
Tamil Nadu farmers are taking to crop insurance in a big way, recording 45 percent rise in crop insurance coverage in terms of area and 34 percent increase in the number of farmers enrolling under the scheme y-o-y for the ongoing Kharif season.
As against 3,11,486 acres covered under the insurance scheme by 2,74,177 farmers across the state last year, 4,53,198 acres have been brought under the Pradhan Mantri Fasal Bima Yojana (PMFBY) by 3,66,227 farmers till August 15 this year, according to agriculture department data available with TOI. Continuing rains in many parts of the state and fear of flooding are reasons for farmers showing greater interest in insurance coverage. Timely receipt of insurance compensation by farmers last year has improved confidence among the people, said agriculture secretary Gagandeep Singh Bedi. “We got ₹8,855 crore sanctioned as claims in the last four years for 49 lakh farmers,” said Bedi.
Villupuram district has recorded the highest enrolment of 1, 10,245 farmers, followed by Namakkal with 62,840 farmers and Nagapattinam with 43,300 farmers. No farmer in Ramanathapuram took insurance and just 21 and 51 did in Perambalur and Sivagangai respectively.
Premium paid by farmers varies from crop to crop and season to season. For kharif season (2020-21), premium paid by farmersis2 percent of the total sum assured per hectare. The premium is charged at 5 percent of the total sum assured for cotton, turmeric, onopns, bananas, tapioca, brinjal and chillies. The state and central Governments’ share of the premium subsidy ranges between 5.5 percent and 21.5 percent. For paddy, it is 6.42 percent.
(The writer is Mamtha Asokan.) TOP Source
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PM Fasal Bima Yojana needs a relook, as many States are opting out of it - The Hindu Business Line – 16th August 2020
Five years after its inception in 2016-17, the Pradhan Mantri Fasal Bima Yojana (PMFBY) has run into rough weather. If farmers are dissatisfied with both the level of compensation and delays in settlement, insurance companies have shown no interest in bidding for clusters that are prone to crop loss. States (Bihar, West Bengal and Andhra Pradesh, Telangana, Jharkhand and now Gujarat) are opting out of the scheme and launching their own versions.
They are unable to deal with a situation where insurance companies compensate farmers less than the premium they have collected from them and the Centre. The sums can be serious (about ₹2,700 crore in Gujarat’s case, according to the Chief Minister) for the States, given the current levels of fiscal stress. If this amount is not to benefit farmers directly, States run the risk of being accused of aiding insurance companies rather than farmers.
In Maharashtra’s Beed cluster, farmers are up against the State government and insurance companies for not settling earlier claims, while the latter have decided to stay out of bids for this region for the current season. That said, it is in the nature of the insurance business for entities to make money when crop failures are low and vice-versa.
Over the last three years, insurance companies have collectively paid claims amounting to about 85 per cent of the premium collected. The task ahead is to sweeten the deal for farmers and insurance companies. Madhya Pradesh is struggling to find insurers for its 11 clusters, having reportedly finalised just five so far (BusinessLine, August 14).
Insurance companies should bid for a cluster for about three years, so that they get a better chance to handle both good and bad years. The bids should be closed before the onset of the kharif/rabi season. At present, bids remain open even as the monsoon is in progress.
As a result, farmers may feel persuaded to buy an insurance policy (the February 2020 guidelines have made the scheme optional) when the weather is adverse, even as the insurer feels persuaded to exit the cluster. There is also the troublesome issue of 50 per cent of farmers’ insurance dues being funnelled into less than 50 districts, raising questions on whether the scheme is being gamed by a few.
If the farmer is not enthused by crop insurance despite the 95-98 per cent subsidy on premium, it means that the product per se needs improvement. Farmers deserve a better choice of insurance products to meet the specifics of each crop or region.
For this, insurance companies should be offered more freedom to operate. For now, the Beed ‘model’, where a company assumes liability only up to 110 per cent of the premium collected or shares gains in a good year with the State government, can emerge as a way out of the current mess.
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SURVEY & REPORTS
Only 4% of COVID-19 patients have health insurance, says survey – CNBC – 19th August 2020
COVID-19 positive cases in India have surged past the 12 lakh figure, however, in the last few months, less than 50,000 people have so far utilized their health insurance policy for the treatment of the novel coronavirus.
According to numbers collated by insurance companies, approximately only 50,000 claims have come to insurers for a settlement involving a cumulative amount of Rs 625 crore — this works out to an incurred expenditure of Rs 1.25 lakh, on an average, per policyholder.
The 50,000 claims, when viewed against the over 12 lakh COVID-19 cases, translates to just 4.1 percent of the individuals who tested positive and had some kind of health insurance coverage. It is believed that most individuals having health insurance are most likely to be covered under a state health insurance scheme such as Ayushman Bharat, employer-provided health insurance, or some private insurance company.
Claims Filed from the Different Indian States As per the data provided by health insurance companies, the highest number of health claims are being filed in Maharashtra as the state claims about 60 percent of the total claims filed. It is followed by Delhi with 15 percent and 10.4 percent of claims have been made in Tamil Nadu.
The total claims that have been filed in West Bengal are 5.4 percent while those filed in Gujarat stand at 3.4 percent. The remaining 5.8 percent of the claims have been filed in other Indian states.
Cost of Treatment of COVID-19 On average, the total cost of treatment of the novel coronavirus claim without ventilators or other life- saving equipment is between Rs 10,000 and 15,000 daily that makes for Rs 1.5 – 2 Lakh for a period of 14-days in urban areas and Rs 75,000 – 1 Lakh in semi-urban or rural areas.
However, where ever the condition of the patient is serious or where co-morbidities are involved and the patient needs to be admitted to the intensive care unit (ICU), the claims are in the range of Rs 6 - 8 Lakh if the patient is aged between 30 – 45 and the amount goes up to Rs. 12 Lakh if the patient is above the age of 50. Usually, patients are discharged once three to five consecutive tests turn negative. In some cases, tests may go up to eight to ten to get a definite result.
Time to Prioritise Health Insurance While it is important to follow all government advised measures to protect yourself physically from getting infected with coronavirus infection, it is also very important to stay financially protected against the epidemic. The only and most convenient way to stay financially protected against the treatment of the infection is by buying an adequate health insurance policy.
Unlike all other medical expenses for hospitalization, if one gets hospitalized for treating coronavirus infection, the health insurance plan will come in rescue to safeguard medical expenses. Buying a health insurance plan not just for yourself but for your entire family is important to make sure your hospital admission and treatment expenses are covered seamlessly.
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Your health insurance policy will cover you for testing and the cost of treatment for the novel coronavirus. On the directions of the Insurance Regulatory and Development Authority of India (IRDAI), all the general and specialized health insurers have been advised to process all claims related to COVID- 19 within 2 hours of the claim request.
Moreover, while most insurers were not covering consumables like PPE kits under the health insurance due to the which the hospital bills of the COVID-19 positive cases were going up, the regulator has now requested the insurance companies to cover the same under health insurance claims. Thankfully, on request of IRDAI most prominent insurers like Religare, Max Bupa, HDFC Ergo, Aditya Birla Capital and Star Health have now started covering the cost of PPE kits and other consumables under regular health insurance plans.
Choose a Plan as Per Your Pocket In order to avail adequate coverage against COVID-19 and all other ailments, it is best advised to buy a comprehensive health insurance policy with the maximum sum insured. A regular health insurance policy with Rs. 10 Lakh sum insured for 32-year-old individual costs anywhere between Rs. 7,000 – 9,000 annually.
However, if you feel you cannot afford to pay the entire amount as a lump sum, you may choose to pay the premium in monthly or quarterly payments as per your own convenience. Moreover, considering the financial stress due to job losses, sales dip and pay cuts that most salaried professionals and businessmen are facing all across the nation due to the corona crises, on the direction of the IRDAI, insurers have come up with standard COVID-19 specific plans that provide adequate coverage against the novel coronavirus.
These are short-term plans available for a period of 3.5 months, 6.5 months and 9.5 months with a sum insured ranging from Rs. 50,000 to Rs. 5,00,000. The plans have been named Corona Kavach - indemnity based health plan and Corona Rakshak - fixed benefit health insurance policy. These Individual COVID specific Standard Health Policies will address the basic health insurance needs of insuring public for COVID-19 with common policy wordings across the industry. Customers can either buy these policies through the insurer’s websites, online web aggregators, or directly approach the branch offices or agents of the insurance companies.
The Corona Kavach is available for as low as Rs. 208 for a policy tenure of 3.5 months with Rs. 50,000 sum insured. In the case of Bajaj Allianz, the lowest premium is Rs 447 for a Rs 50,000 sum insured for a customer up to the age of 35 years for 3.5 months. The premium rises with age and period. The same customer will have to pay Rs 745 for a 9.5-month policy which is the maximum period. For the maximum sum insured of Rs 5 lakh, the individual will pay Rs 1,320 with the premium rising to Rs 5,630 for those over 60.
(The writer is Amit Chhabra.) TOP Source
PENSION
PFRDA mulls permanent licenses for pension fund managers – Live Mint – 17th August 2020
A circular issued by the Pension Funds Regulatory and Development Authority (PFRDA) on foreign direct investment (FDI) in pension funds is all set to pave the way for a new round of licensing for pension fund managers. Lack of clarity on the FDI issue had delayed the issue of a fresh request for proposals (RFP) and kept the industry locked into the old license regime with fees capped at extremely low levels.
Apart from potentially higher fees, the fresh round may also see permanent licenses being issued to pension funds, a senior official at the regulator said. In the previous round of licensing only five-year licenses were issued.
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“A pension fund management company is not allowed to do any other business. Hence players are reluctant to invest in such a company for the prospect of just a five-year license. A permanent license on the other hand will generate more confidence among investors. The regulator can always revoke the license and deregister a pension fund if rules are not followed," the official said.
In addition, pension fund manager fees under the old licenses are capped at just 0.01%, making the business unremunerative for most players. The new RFP is expected to alter this scenario.
The FDI threshold in insurance was raised from 26% to 49% in 2015. Since the FDI threshold in pensions is linked to insurance, the latter also got a green flag for a hike. In October 2019, foreign investment in the pension sector up to 49% was permitted under the automatic route. However, there was ambiguity on how the foreign ownership is to be calculated.
The latest PFRDA circular brings this ambiguity to an end. It includes direct and indirect ownership within the limit for calculations but carves out an exception for banks and public financial institutions such as LIC and UTI.
For instance, if an insurance company or asset management company (AMC) with 49% foreign ownership sets up a fully-owned pension fund subsidiary, the latter cannot have any additional foreign ownership. However, if a bank with 49% foreign ownership sets up the pension fund in question, this will be ignored. The pension fund subsidiary can have additional FDI up to 49% of its own.
The aforementioned official added that RFP for fresh pension fund manager licenses could be issued by the regulator within as little as a month.
The industry response to the circular has been mixed. “The circular is welcome but there are a few issues," a senior executive at a pension fund said on condition of anonymity. “Most existing pension funds are housed under asset management companies (AMCs) or life insurance companies. These will have to be shifted to banks to benefit from the carve-out. This may necessitate approvals from RBI," he added.
The Reserve Bank of India (RBI) has lately become wary of banking exposure to other financial services. As Mint reported here, the central bank wants lenders to limit their non-bank risks and focus instead on boosting credit growth in a slowing economy. However, the clarity on FDI will finally set in motion the long due process of licensing the pension fund managers afresh.
(The writer is Neil Borate.)
Source TOP
NPS Tier II account outperforms bank fixed deposits by wide margin – Live Mint – 14th August 2020
The impressive performance of National Pension System (NPS) schemes is gaining investor attention as the investors are looking for safer avenues to avoid the volatility in equity markets during the Covid19 times. Most NPS schemes have outperformed bank fixed deposits (FDs), the most favoured investment product of your country. Here we will see how NPS Tier II Account and bank fixed deposits fared and how these two compare with each other.
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NPS Tier II is a voluntary account and having an NPS Tier I account is a prerequisite to open Tier II Account. You can invest and redeem from Tier II Account at your discretion provided you are not a Central Government employee claiming deduction under Section 80C for your contributions to Tier II Account.
A Central Government employee who invests in NPS Tier II Account can avail deduction under Section 80C maximum for an amount up to ₹1.50 lakh. Such accounts will have a lock-in period of three years.
NPS Tier II Account Scheme G, that invests in government bonds and related instruments has given double-digit returns in the last one year. The average returns in the category are 11.84%. Whereas a one-year fixed deposit with the country's top lender, SBI Bank fetches you an interest rate of 5.1%. For other tenures also the NPS scheme has fared better than bank fixed deposits.
Here are the latest SBI fixed deposit interest rates below ₹2 crore for general public: 7 days to 45 days - 2.9% 46 days to 179 days - 3.9% 180 days to 210 days - 4.4% 211 days to less than 1 year - 4.4% 1 year to less than 2 years - 5.1% 2 years to less than 3 years - 5.1% 3 years to less than 5 years - 5.3% 5 years and up to 10 years - 5.4%
Here's the performance of NPS Tier II- Scheme G (Government Bonds)
NPS Tier II Account allows four investment options - equities, corporate bonds, government bonds and alternate investments.
(The writer is Avneet Kaur.)
TOP Source IRDAI CIRCULARS
Health products approved during the financial year 2020-21 for uploading in Irdai website (01.04.2020 TO 30.06.2020). TOP Source
Gross premium underwritten by non-life insurers within India (segment wise): For the month / upto the Month of July, 2020 (provisional & unaudited) is available on IRDAI website. TOP Source
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IRDAI issued exposure draft regarding loss prevention and minimization in the general insurance industry. TOP Source
GLOBAL NEWS
COVID-19 raises importance and demand for life insurance – Asia Insurance Review
A new study from Lincoln Financial Group has revealed that digital options raise the importance of life insurance and also increase the likelihood of life insurance being purchased.
The study says that as a result of COVID- 19, more than a third of consumers think life insurance is more important and a similar number say they have purchased or are planning to purchase life insurance.
According to the study, digital options increase the likelihood of purchasing life insurance — especially among younger consumers. While 29% of all consumers surveyed would be more likely to buy life insurance if they could do so completely electronically, that number jumped to 40% among millennials.
Of the 1,004 participants in the study, which was conducted during July 2020, 45% of the respondents said they were more likely to purchase new/additional life insurance if it provided more than just death benefit protection, and they could use it for future needs or emergencies while alive.
The study said, “Digital capabilities are more important than ever as we work to meet the evolving needs of our customers and provide experiences consistent with what consumers are used to from other industries.” Lincoln Financial Group senior vice president (underwriting and new business) Heather Milligan said, “Digital capabilities are more important than ever as we work to meet the evolving needs of our customers and provide experiences consistent with what consumers are used to from other industries.”
Ms Milligan said, “The global pandemic has increased awareness around the need for life insurance and now we have to make sure the process is streamlined and convenient. Our new online interview tool is the next step in our digital evolution.”
Previously, the interview for purchase of life insurance products was done over the ‘phone but now the same questions are available for customers to answer online after their application request is received. In less than 30 minutes, the online interview process can be completed. Ms Milligan said this online capability makes the process convenient and private for customers and results in faster turnaround times. TOP Source
Germany: State-backed pandemic insurance solution needed - Asia Insurance Review
The German association of risk and insurance managers (GVNW) and the federal association of German insurance brokers (BDVM) have come together to pursue the creation of a state-backed pandemic insurance solution to help deal with future health crises.
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The two associations have issued a joint statement that formally calls for a mechanism that could be based on Germany’s existing state terror insurance pool Extremus. It would provide cover for all sizes of German companies – from the self-employed up to multinational corporations – and access capital markets for larger and more complex risks.
GVNW has been calling for action from the German government to follow the initiatives in France, the UK and the US and create a private-public partnership to deliver pandemic coverage that the commercial insurance market has excluded since 2004.
GVNW president Alexander Mahnke told Commercial Risk Europe that initial discussions have taken place with the federal government on the topic and the joint statement will hopefully help take these discussions further and lead to the creation of a solution “as soon as possible”.
Mr Mahnke said there is no competition between the GVNW/BDVM proposals and those presented by the German Insurance Association (GDV). “We may have different views on some specific points but are working towards the same goal.”
In June this year, GDV published a paper that proposed a private-public sector hedging facility to provide protection against future pandemic losses. The GDV model also suggested the inclusion of capital markets, insurers and state aid as a last resort.
The Federation of European Risk Management Associations has also called for a pan-European solution and is part of a working group to investigate the options organised by the European Insurance and Occupational Pensions Authority.
The associations argue that businesses cannot rely on state aid to bail them out in a future pandemic. An insurance-based system, backed by the state, is the obvious route forward, they say.
“In order to be prepared for this challenge (future health crises) and to provide those economically affected with an independent and self-reliant means of protection, and thereby prevent the German economy from being solely dependent on government grants in such a situation, we consider the creation of a pandemic insurance solution essential,” the paper said. TOP Source
Malaysia: Life insurance industry posts fall of 12.6% in total premiums in 1H - Asia Insurance Review
The life insurance industry recorded an overall dip of 12.6% to MYR5,244m ($1,254m) in new business total premiums in the first half of 2020 (1H2020), compared to the corresponding period in 2019, the Life Insurance Association of Malaysia (LIAM) disclosed yesterday.
The decline is attributed mainly to the drop in new business investment-linked policies which contracted by 24.5% in terms of total premiums to MYR1,727m.
During the Movement Control Order (MCO) and Recovery Movement Control Order (RMCO) which started on 18 March 2020, activities of life insurance selling came to a halt as face-to-face selling were restricted for more than three months. Investment-linked insurance plans have more features and require face-to-face interaction by agents to explain these features to customers.
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The breakdown of the 1H performance is: During the MCO, the life insurance industry recorded a surge in direct channel sales for Temporary Insurance, Critical Illness Insurance and Medical and Health Insurance due to the restriction of face-to-face selling by agents and bank staff and to the efforts taken to develop direct life insurance distribution channels, especially though digital innovation, since 2017. Customers now have the option of purchasing these types of insurance plans namely Term Insurance, Critical Illness and Medical and Health via direct channels.
Ms Loh Guat Lan, president of LIAM, said “The COVID-19 pandemic has increased in the awareness among Malaysians on the importance of life insurance protection. The role of life insurance has become even more important as an essential financial tool to reduce uncertainties in life. Therefore, I would urge all industry players to come together and offer our best service in protecting more people out there with adequate insurance protection to create a better future for themselves and their families.”
She added, “The recent pandemic has been the unexpected catalyst for the adoption of technology than ever before. During the MCO and RMCO, insurers continued to serve its customers via digital platforms or assisted by the customer service centres. While new methods and technologies will impact how business is conducted on a day to day basis, I believe that the adoption of technology is inevitable in order for us to be more efficient, responsive and productive to connect with our customers.”
LIAM has a total of 16 members, of which 14 are life insurance companies and 2 life reinsurance companies. TOP Source
Australia: Front loaded discount policies likely to increase lapses - Asia Insurance Review
Front loaded discounts in insurance policies are likely to increase lapses for a number of reasons, says a research paper was commissioned by PPS Mutual prior to the outbreak of COVID-19.
Firstly, they encourage customers to switch to a policy with a lower first year premium in the first instance. Secondly, they mostly have higher premiums on average from the third policy year onwards. Lastly, they will also differ even more markedly to new business quotes where the first year discount still applies.
Front loaded discounts Undertaken by respected actuarial consultants Rice Warner, the research shows that while new life risk policies (especially for Life, TPD and Trauma) with stepped premiums and front loaded discounts can increase affordability in first-year premiums, they are more costly to consumers from the third policy year onwards.
The research indicates that front loaded discounts represent poor consumer practices that should be fixed by the retail life risk insurance sector in Australia.
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Increasingly, in a bid to secure market share, the retail insurance industry has adopted initial short term discounts for new business premiums. The research demonstrates how over 5–20 years, policies with front loaded discounts have significantly higher premium increases relative to the first policy year.
PPS Mutual said, “While many of the issues the industry is grappling with are a function of the macro socio-economic environment, an historic and aggressive chase for market share by various insurers has created highly undesirable outcomes for consumers. We believe that there has never been a more important time to reassess past dynamics of the sector, and work towards building a strong and sustainable insurance industry for all Australians.” TOP Source
Insurance industry reputation battered by pandemic - Asia Insurance Review
Insurance has fared particularly poorly in terms of news sentiment since the start of the pandemic. GlobalData has found that the insurance industry has seen more positive stories since May this year although the prior three months were extremely negative in coverage and will be damaging to the industry despite the recent recovery.
The news sentiment index tracker noted that the insurance sector reached its lowest ebb in Q2 2020, with a sentiment score of 0.42, but has since recovered to 0.44 in the first month of Q3. The score was 0.57 before the pandemic.
Global Data insurance analyst Ben Carey-Evans said, “The insurance industry has always struggled with its image and consumer trust, and that fell to new depths in March and April 2020 because of the news that many insurers, especially in travel and business interruption, would not have to payout once COVID- 19 was declared a pandemic, which was incredibly damaging to consumer trust and will have lasting damage, despite the very slight upturn in sentiment.”
The recent upturn in more positive news may be due to certain sectors such as travel beginning to open up to consumers again. Similarly, some business interruption insurers agreed to do a U-turn and pay out in some cases when they faced pressure from the Financial Conduct Authority of UK in April.
Mr Carey-Evans said, “The upturn may also be the news cycle running its course and the damage to the industry caused by widespread stories about insurers not paying out could cause lasting damage.” TOP Source
Australia: Actuaries Institute study shows equity gap growing between generations - Asia Insurance Review
Falling rates of home ownership, government spending that skews to older Australians and deteriorating environmental factors are some of the factors that have driven a wider gap in equity between Australia's young and old.
The Actuaries Institute’s latest Green Paper, “Mind the Gap – The Australian Actuaries Intergenerational Equity Index (AAIEI)”, launched yesterday, tracks how wealth and wellbeing for different generations have been changing over time. The Index was commissioned by the Actuaries Institute and compiled by actuaries Hugh Miller, Ramona Meyricke and Laura Dixie.
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25-34 age group "The Australian Actuaries Intergenerational Equity Index indicates that the relative wealth and wellbeing of those aged 25-34 sits lower than at any other time in the past two decades," the Green Paper states. "The wealth effects of the housing boom, plus rapid increases in government payments on pensions and services for older people are key reasons that young Australians today have relatively lower wealth and wellbeing index scores than that of their parents at a similar age."
Deteriorating environmental conditions have also had a significant negative impact on intergenerational equity. The AAIEI shows that since 2012, there has been a marked widening of generation gaps.
The report states: "The results are striking; from 2012 onwards, there was a marked increase in the Index for the 65-74 age band, while over the same period, there was a pronounced drop in the index for the 25-34 age band. This period coincides with the Baby Boomers entering the 65-74 bracket and Millennials entering the 25-34 bracket, so suggests a wider gap between these generations than has been present for previous cohorts." A similar gap exists between those aged 45-54 and those aged 65-74. Those in the older cohort are pulling away from both younger groups.
COVID-19 The impacts of the COVID-19 pandemic, while not yet visible in the data underlying the AAIEI, are also discussed; in many ways the pandemic has accentuated intergenerational issues.
Expectations and reality "We are all very used to the idea our children will live better lives than we do," Dr Miller said. "We expect continuous improvements in government services, better products, higher incomes, and improved health. But an increasing majority of parents fear that as today's children grow up, they will be worse off financially than their parents. There are a broad range of economic, housing and environmental issues that appear to be worsening."
"It is very important to understand how equity is changing between generations over time," said Elayne Grace, chief executive of the Actuaries Institute. "It helps inform public debate, and government policy, to deliver the best and fairest outcomes for all Australians. We need policy and outcomes that are sustainable." TOP Source
Australia: 'Panic buying' of life insurance during pandemic - Asia Insurance Review
With the number of Australians concerned about COVID-19 on the rise again, 'panic buying' has now extended to life insurance products according to data and analytics firm GlobalData.
Data from the firm’s ‘2020 Global Wealth Managers Survey’ revealed that COVID-19 is driving demand for life insurance products among Australia’s high-net-worth (HNW) investors.
Survey results show that 88% of wealth managers report increased demand for life insurance products as a result of the pandemic. This is the highest proportion among the 19 countries surveyed. GlobalData senior wealth management analyst Heike van den Hoevel said that Australian HNW investors are looking for ways to care for their families in the face of growing concerns surrounding COVID-19 infections.
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Data from GlobalData’s ‘COVID-19 Tracker Survey’ shows that 83% of Australians were ‘quite concerned’ or ‘extremely concerned’ about the outbreak of COVID-19, as of 5 August. Another 12.1% were ‘slightly concerned’, leaving 5% who voiced no concerns.
In addition, 61.5% of Australians believed that the COVID-19 situation would get ‘a bit’ or ‘a lot worse’ over the next month. This compares to only 28.7%, who expected the situation to deteriorate at the beginning of May.
“This negative sentiment will continue to support the demand for life insurance products. Roughly half of the wealth managers GlobalData surveyed expect demand to continue to rise over the coming year while virtually none expected demand to fall,” said Ms van den Hoevel.
However, she noted that the lack of trust in insurance providers continues to have a significant effect on the provider selection. According to her, the crisis has been a double-edged sword with COVID-19 driving demand but has also leaving a negative impact on the insurance providers’ image.
Data revealed that 96% of wealth managers agree that customers have lost confidence in the life insurance industry as a result of the COVID-19 pandemic.
“The reputation of insurers has taken a battering amidst COVID-19 and HNW investors will be more likely to buy insurance products via a third party they already trust and have an established reputation with. This means now is clearly the time for wealth managers to review their life insurance proposition,” said Ms van den Hoevel. TOP Source
Philippines: 77% of clients likely to buy additional policies - Asia Insurance Review
The Manulife Asia Care Survey 2020 shows Filipino insurance clients are more concerned about the effects of the pandemic than their counterparts in most of Asia.
The survey conducted in late May, surveyed 300 insurance owners in the Philippines and most respondents expressed concern about the pandemic’s long-term impact on the local economy and their day-to-day living.
The pessimism of Filipinos about the likelihood of COVID-19 slowing down in the next six months was second to that of Indonesians, among those across the eight markets surveyed. More than half (58%) of the Filipino respondents said they thought COVID-19 would get more serious during the second half of 2020, above the regional average of 41%.
The health crisis brought awareness of the need for health insurance with 77% of respondents in the Philippines saying that they intend to buy additional insurance in the next 18 months, “which is the most robust level among all the markets surveyed and well above the regional average of 62%.”
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Life (33%), health (29%), hospitalisation (31%), accident (28%) and critical illness (27%) were the main new insurance products being considered by insurance owners in the Philippines. The survey showed a greater willingness to use online services to monitor their finances.
According to Manulife, “the Philippines is one of the region’s most under-insured countries.” One measure of insurance penetration is gross written premiums as a percentage of per-capita GDP. In the Philippines, along with a few other markets in the region, the penetration rate is less than 1%, far below the rates in markets such as Hong Kong and Singapore. TOP Source
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