INSUNEWS Issue No

145559

19th – 25th September 2020

INSUNEWS Issue No. 2020/38 Weekly e-Newsletter

QUOTE OF THE WEEK INSIDE THE ISSUE

Insurance Industry 2 “Reading furnishes the mind only Insurance Regulation 12 with materials of knowledge; it is Life Insurance 14 thinking that makes General Insurance 25 what we read ours.“ Health Insurance 32 Insurance cases 54 John Locke Pension 55 IRDAI Circular 59 Global News 59

INSURANCE TERM FOR THE WEEK

Underwriting Risk

Definition: Underwriting risk refers to the potential loss to an insurer emanating from faulty underwriting. The same may affect the solvency and profitability of the insurer in an adverse manner.

Description: Underwriting is a critical risk mitigation mechanism adopted in the insurance industry. The process helps in deciding the appropriate premium for an insured. The underwriter needs to match the premium received with the claims paid with an eye on profitability. In the event of a dichotomy between the two, with the premium received not sufficient enough to cover the claims, the insurer is confronted with the probability of loss.

The premium charged by the insurer must incorporate the risk premium that covers not only the claims but also the capital requirements, also called the solvency requirements. In the event that the matching is not done in a pragmatic manner, the underwriting risk arises.

Source

INSURANCE INDUSTRY

Indian Insurers adopting cloud and how! - The Economic Times – 24th September 2020

India’s young insurance industry as compared to the global peers is steadily evolving with adoption of new age technologies which enable faster deployment of services not internally but end users too. Indian insurance companies have started adopting cloud and all are at different stages. Insurance CIOs & CTOs believe having a right cloud roadmap which is aligned to the enterprise’s policy is critical in determining the pace of cloud adoption.

The pandemic has fastened the pace of cloud adoption as India had imposed one of the most stringent lockdowns where all the economic activities and physical exchange of services had come to halt. Face to face selling of policies was a pre- dominant factor across the insurance industry and more heavily in life insurance. The lockdown forced insurers to enable end-to-end digital delivery of services right from on boarding to policy issuance to settlement of claims.

Max Life Insurance is leveraging cloud to deliver scalable, agile technology platforms for meeting their customer expectations. Most of their customer facing applications are hosted on cloud and they were able to scale up applications across 1000 of users overnight. Manu Lavanya, COO, Max Life Insurance, said, “We have started to build a comprehensive data lake on the cloud to create a 360 view of the customer which can help us in leveraging intelligence to create personalised journey’s and Omni channel service experiences. We’ve built a conversational interface powered by Google Cloud to solve queries and improve services. We have kickstarted a strategic initiative wherein we will transition the bulk of our IT infra to cloud over the next 3 years.”

Adopting the right cloud strategy as per the insurer’s requirements has few important benefits in terms of its cost effectiveness, faster deployments, scalability, simplification and a few other benefits. At Reliance General Insurance, they’ve partnered with Microsoft Azure for cloud based services. Rakesh Jain, ED & CEO at Reliance General Insurance said, “We run a hybrid cloud environment with a dozen or so critical services and large applications running on the cloud and the remaining ones in our On- Premise data center.”

Their strategy is to remain in a hybrid environment giving them the best of both worlds - the cost efficiency of an on-premise environment, the scalability and robustness of the cloud. He added, “Leveraging the cloud is a progressive journey as we must manage business expectations along with our re-engineering needs.”

At IndiaFirst Life Insurance, the cloud journey was started recently and is still in the initial stages. It’s Chief Technology Officer, Sankaranarayanan Raghavan said, “We’ve started on it and are on Office 365, from a data centre perspective we are majorly on-premise both the disaster recovery and main data centre. But we’ve started our journey and implemented with Nutanix and thought of how we can do it right from storage to orchestrating to managing licenses, etc. Second, we will be going ahead to move development platforms to the cloud.” “Third, all the digital assets and channels we’ve got will go into the cloud. Not all of it has gone; it's in the pipeline and roadmap. We will be accelerating this much faster in the coming times as it gives us agility to do things.”

Future Generali Life Insurance’s Chief Technology Officer, Byju Joseph believes, cloud adoption is a gradual process. According to him anything distribution facing and customer facing has to be cloud native without any questions. He added, “While we can move the virtual infrastructure to the cloud, we’ve taken a conscious call to make it a private cloud within the data center. By 2021 end, around 65% of my infrastructure will be on cloud. We take a balanced approach, I would want to put an application on cloud only if it’s cloud natïve and not just for the sake. Technology supports and enables the growth engine. CIOs are looking to be ready with the capabilities that require expanding whenever the need arises and cloud gives the enterprise the agility to expand. TOP Source

Insurance: Data analytics can make insurance firms smarter - Financial Express – 23rd September 2020

As the value chain continues to become more digitally connected, insurers have the prerogative of better understanding customer segments and partners, and adapt to consumer needs in near real-time. In the near term, most of the digital insurance consumers will likely be young, educated and with higher levels of income.

To meet customer needs, most insurers have already started to collect a wealth of data. However, they have been slow in monetising this asset. To understand and meet consumer needs, there is an immediate need to create new business lines or models to capture the value of data and analytics. As more and more insurance consumers shift online to interact, compare products and prices, and make purchases, the volume of available data is increasing exponentially.

Data-enabled processes Over time, Big Data and refined models will work for allowing risk pricing at an increasingly granular level. There

3 is nothing to deny the fact that the insurance industry is a major component of the economy. It enables individuals and companies to take more risk, which further empowers innovation and growth. And the fuel of the insurance is data.

Technology revolutions of the last few decades and falling cost of technology create new opportunities for insurers to harness the data.

Data-enabled processes will minimise friction and streamline the customer insurance journey, from request for coverage to claim. Digitalisation will thus help improve the customer experience and also the efficacy of back office processes. The true opportunity, however, lies in leveraging the collected data to fundamentally change how a particular business operates and delivers value to its customers.

Engaging with customers Most insurers are striving to fundamentally change their relationship with consumers through the use of real-time monitoring and visualisation. Consumers who agree to let insurance companies track their habits can learn more about themselves, while insurers can use the derived data to influence behaviour and reduce related risks. For instance, in the auto insurance industry, telematics is being used to monitor driving habits and behaviour of the consumers in real-time.

Apart from providing digital transformation, use of more data and better tools to collect and report on data means better compliance. And this is particularly because insurance companies are subjected to increasing regulatory mandates at various levels. As insurance companies consider new uses for the data they collect, they must also be aware of the mandates from multiple agencies. In all the cases, the ability to collect, report and use data makes regulatory reporting easier and more consistent.

Yet another important reason why insurance companies need to embrace data is for fraud detection. One of the biggest issues that insurance companies are facing right now is fraud. According to most insurers, 1-1.5 out of 10 claims is fraudulently filed. This is alarming, given the limited number of policyholders that an insurance company may have. While some policyholders do it sloppily, some do it meticulously and get away with it. With the use of Big Data analytics, a large amount of data can be checked in a short amount of time. It includes a variety of Big Data solutions, such as social network analysis and telemetric. This is the biggest weapon insurers have for detection of fraud while filing claims.

(The writer is Saurabh Tiwari.) TOP Source

Coming soon: An all-new customer experience in the Insurance space – Live Mint – 22nd September 2020

Circa 2030. You will be able to buy an insurance policy for yourself at the click of a button and a chatbot embedded in the digital interface of the insurer will offer instant redress to all your queries. Your policy will be tailor-made for you, seeing your history and other risk parameters.

The insurance industry is at the cutting edge of innovation and the Covid-19 crisis has accelerated the need for this digital transformation. As the modern-day customer seeks value and ease of use in every aspect of their lives, the Insurance sector has also embarked on their digital journey and even areas like customer acquisition – where face-to- face contact was considered essential – are being digitized. Tech tools are being deployed to reimagine

4 processes of filing claims or applying for renewals. The latest episode of virtual panel discussion series – ‘Driving Innovation in Insurance’ – puts the spotlight on reimagining customer experiences in the Insurance sector by leveraging AI/ML driven decision-making.

Here are a few highlights from the session: Complete digital makeover on the cards The pandemic has accelerated the digital journey in the Insurance space by leaps and bounds. While a lot was happening on the digital side in the sector, Customer Experience was not the area of focus. A complete shift is expected by 2030 when a digital makeover will redefine the way customer interactions are defined.

“We have taken to digital not by our immediate voluntary reaction but on the rebound. But the way we have scaled up over the last few years is very interesting. We have tried to create a digital superstore on SBI’s app and you have to see how different the experience is on that. Customers are ready to accept digital, even through intermediaries as they get value and it makes their life smooth and easy," said Pushan Mahapatra, Director, Strategic Investments and Digital Initiatives, SBI General Insurance.

A majority of the Insurance business is driven by offline channels like brokers, intermediaries and banking agents. But a shift to digital has been noticed globally and has caught up in India too, which seems to be getting accelerated due to people’s no-contact attitude during the pandemic.

“In 2020, there is a domination of digital channels in Germany – 84 percent is phone, 70 per cent email and 49 per cent through intermediaries and agents. But an overarching change is predicted for 2030 when digital will dominate. The trend is very similar for India and every insurance company will have to go through the journey from the offline to digital world," said Oliver Borner, Transformation Lead, Financial Services, SAS (DACH region).

Understanding changed customer expectations In the age of one-click digital experiences offered by the likes of Amazon and Google, customer expectations have changed. Traditionally, selling insurance in India has been about the push and not about a need felt by the end consumer to buy such a product. But a shift is being witnessed to offer the customer an end to end experience, which is made seamless with the advent of digital technologies like AI and ML.

“General insurance companies are bleeding paying customer claims and still the general perception is that the claims are not paid and the processes are cumbersome. The problem has been that the consumer expectations have never been there from a front-end. We have always been focussed at the backend," said Sourabh Chatterjee, President and Head, Technology, Digital Sales and Travel, Bajaj Allianz General Insurance. It is about adding value to the customer journey beyond just acquisition, which accounts for 60-70 per cent of the insurer’s cost.

“The real customer experience is around all parts of the value chain, from onboarding to claims and renewals. Insurers need to look beyond the direct to consumer channel and create value for the traditional channels too, where a bulk of the business comes from. It is critical to deliver customer experience which is the best in class," said Prasad Lad, Partner, McKinsey and Company.

Using technology to enhance customer experience Insurance companies have the tough task of delivering a “good" customer experience at your worst hour, be it a life event, health exigency or even a car accident. But as the modern-day consumer seeks value in every aspect of their lives, the insurance sector is reinventing its ways.

Over the last couple of years, a lot of work has happened to digitalise the operations in the Insurance sector and use technology to bring about efficiency. A lot of AI/ML solutions are being used for media buying and even customer acquisition. But, insurers need to venture into new horizons of customer experiences.

“For customer on boarding where you can use a lot of third-party data or ride on the Jandhan-Mobile- Aadhar trinity which is available, AI/ML solutions can be used for purposes of underwriting or deciding the nature of underwriting that an application needs to go through. On the other hand, it can be introduced for complete application processes without the need for a face to face interaction," said Vishal Subharwal, Executive VP, E-commerce and Digital Marketing, HDFC Life Insurance Co Ltd.

Changing role of intermediaries Digital platforms like Policy bazaar have made insurance much easier for people to consume and buy online and compare. The future is to personalise the experience for the customer and offer an end to end solution.

“We have a privilege of collecting data from the customer right from the time he comes onto the portal to purchasing the policy and take him to the level where he can be serviced for a long time. This data will be our focus area and we want to use it to personalise the experience for the customer," said Saurabh Tiwari, CTO, Policy bazaar.

Intermediaries are looking at collaborating with insurers to build the right solutions tailored to the individual needs of their customers. “The product that we are building for the consumer can’t have a one size fits all approach. We need to innovate on building the product construct and that is the area where we can partner with companies to offer all the information they need to build these products. It’s not just about bringing customers but also serving them well," he added.

Using AI and ML to break the silos Insurance companies have a whole pool of data available at their disposal which can be processed to derive solutions for improved customer experiences. Technologies like AI/ML are game changers in the efficiencies they bring about as they take away some of the aberrations which happen in human processes.

“Our solution is a central decision engine which connects to all the different kinds of data which is available – inventory data, external data about customer demographics, events, triggers. You need to apply analytics on the vast pool of data that is available. Without tools of AI and ML, it is very hard to find the solution that offers the best balance between customer satisfaction on one hand and revenue on the other," said Borner. But these technologies must be backed with the right vision to deliver the desired results. There is, therefore, a need to synchronise basic processes before the switch to digital is made.

“We are seeing a large transformation right from chatbot to customer servicing channels. But it is important to have the basic processes set right in the organisation to deliver optimisation as AI and ML learn from them. These technologies also develop biases easily making it imperative to review them from time to time so they don’t lead to wrong conclusions," said Mahapatra.

Building digital trust Today, every organisation is adapting to digital and using new tools to engage with customers. But building digital trust and at the same time ensuring that customer privacy is not threatened is critical to this process of transformation. “If you look at the framework around data privacy, it is all about what is in it from a consumer standpoint. We must deliver that at each and every part of the value chain with a clear consent," said Chatterjee.

The customer must be at the heart of all the digital innovation and it is important to explain why you want the information. “As long as the consumer knows what’s in it, they will provide whatever you need. AI and ML will help to get all the relevant information from the vast pool of data that we have. But it is not like a magic button. The understanding of the information to provide the right answer is very important," said Borner.

Proactive risk management is the future The future? Actuaries see insurers play the role of proactive risk managers rather than merely providing compensation for loss. Value driven sales is fast becoming the new norm and insurers are not just

6 mitigating risks for an individual’s health or vehicle or life, but want to be viewed as risk managers who are offering something of value.

“The paradigm shift is already happening. Instead of doing asset-based underwriting, we are offering a risk solution. Traditionally, we were selling one product at a time, say for a fire, or shopkeeper’s policy in the SME space and underwriting only one risk at a time. Now, we have to look at the inherent risk of that individual plus their family, and their business," said Chatterjee.

Insurance companies need to invest into the intermediary networks and provide them with the technological backup needed to boost customer experience. “Historically, in India and across markets, the intermediaries were the source through which insurance companies interacted with customers. For them, they were one level away from the customer. The agent is supposed to deliver the customer experience and companies should help them in doing so. If we look at 2030 as a benchmark, insurance companies can really turn this around," Lad added. TOP Source

Buying insurance during coronavirus pandemic? Here's how video-based KYC will benefit policyholders - The Economic Times – 21st September 2020

Banks and mutual fund houses have been allowing their customers to complete their KYC process via video facility for a while now. And soon, even those looking to buy insurance policies can complete their Know Your Customer (KYC) process via the video route.

The Insurance Regulatory and Development Authority of India (IRDAI) announced recently that it will soon allow insurance companies to use real-time video-based authentication methods to vet customer credentials for new on boardings.

IRDAI's circular issued on September 21, 2020, states, "Video Based Identification Process (VBIP)is an alternative (optional)electronic process of Identification / KYC in paperless form, carriedoutby the insurer/authorised person (person authorised by the insurer and specifically trained for face-to-face VBIP) by undertaking seamless, secure, real-time, consent based audio-visual interaction with the customer/beneficiary to obtain identification information including the necessary KYC documents required for the purpose of client due diligence and to ascertain the veracity of the information furnished by the customer/ beneficiary."

Here is a look at how it will work and how it will benefit policyholders.

How the process will work IRDAI has stated the following VBIP process for insurers

The authorised person of the Insurer performing the VBIP for KYC shall record video as well as capture live photograph of the customer present for identification and obtain the identification information as below:

Insurers can use offline verification of Aadhar for identification, if voluntarily submitted by the customer or they may also perform OTP based Aadhar e-KYC authentication if voluntarily submitted by the customer, subject to notification by the government under Section 11 A of Prevention of Money Laundering Act (PMLA).

The insurer shall ensure that the video is clear and the customer in the video shall be easily recognisable and shall not be covering their face in any manner.

IRDAI said, "Live location of the customer (Geotagging) shall be captured to ensure that customer is physically present in India. Also, insurers should ensure that the video recording bears the date and time stamp, which has to be stored in a safe and secure manner as per PML Rules."

Insurer shall ensure that photograph of the customer in the Aadhar matches with the customer undertaking the VBIP and the identification details in Aadhar shall match with the details provided by the customer.

Insurer shall ensure that the sequence and/or type of questions during video interactions are varied in order to establish that the interactions are real-time and not pre-recorded.

All accounts opened through VBIP shall be made operational only after being subject to concurrent audit/ underwriting/ verification, to ensure the integrity of process.

Insurers shall ensure that the process is a seamless, real-time, and secured, end-to-end encrypted audio- visual interaction with the customer and the quality of the communication is adequate to allow identification of the customer beyond doubt. Insurers shall carry out the liveliness check in order to guard against spoofing and such other fraudulent manipulations.

To ensure security, robustness and end to end encryption, the insurers shall carry out software and security audit and validation of the VBIP application before rolling it out, IRDAI said.

How it will benefit policyholders? Online video KYC will not only help smoothen and expedite the entire process of buying an insurance policy, but it will also help authenticate the documents and the information provided on a real-time basis.

Insurance agents can avoid making multiple visits to the customer using this KYC method. Besides, even customers do not have to visit the insurance office to buy policies. They can get life, health or any other type of insurance policies in electronic form by giving their consent to the insurer via a one-time- password (OTP), without using a wet signature on the hard copy of the proposal form.

"The video needs to be clear and without a face mask/cover such that the applicant can be clearly identified and the same needs to be done from the advisor's registered mobile number with live tracking of the person on Google Maps. This would surely help reduce frauds as real-time live videos would be recorded and then reproduced whenever needed," Dhirendra Mahyavanshi, Co-Founder, Turtle mint, an insurtech firm.

Mahyavanshi added, "With the advent of technology, video KYC can now be implemented everywhere without compromising on personal safety or overruling the social distancing norms for the current pandemic."

(The writer is Navneet Dubey.) TOP Source

As Covid-19 upends traditional functioning, insurance goes digital - Business Standard - 21st September 2020

The insurance industry has always depended on “touch” to engender trust among its customers. But the Covid-19 pandemic, and the new norm of social distancing, has hugely altered the way it functions, prompting insurers to make the leap from manual, paper-bound processes to digital-based selling. The industry had already embraced a variety of new technologies to enhance customer experience, tap into new customer bases and reduce costs. But the push to go completely digital came from the stringent lockdown imposed in March to contain the spread of the coronavirus, which disrupted traditional distribution channels. General insurer ICICI Lombard, for instance, was was already using digital

8 platforms for most of its sales partners, including distribution tie-ups, agents, brokers for policies and other transactions, as well as for claim settlement. The lockdown only accelerated the adoption of some of these platforms. “During the lockdown, we printed almost no paper. We were only sending electronic versions of policy documents through mediums such as email and WhatsApp,” says Girish Nayak, chief, service, operations and technology, at ICICI Lombard. “We are leveraging technologies such as natural language processing and robotic process automation for quick policy issuance and servicing, and artificial intelligence and machine learning for claims and policy servicing.”

ICICI Lombard says almost 90 percent of its policy issuance for certain products aimed at small and medium enterprises is made through an automated platform. The company has provided customers with an insurance app, which makes it easier for them to transact. Their queries are addressed through a chatbot which is part of the app. “We have also provided consumers with an option of having a two-way video chat at the time of claims.

This helps us service claims faster,” Nayak adds. At ICICI Lombard’s sister concern, ICICI Prudential Life Insurance, some 98 percent of new business was logged online and 92.5 percent of all transactions were done digitally, between April and June 2020. “Digital enablers like WhatsApp, Chatbot LiGo, Mobile App and the website have ensured uninterrupted service delivery, and claimants can use them to raise claims,” says Ashish Rao, chief, customer experience and operations. The company also makes most payments electronically.

Another life insurer, PNB MetLife, launched a “co-browsing” facility to better educate customers about its products, since insurance sales require a high level of interaction between customers and salespersons. A prospective customer and a sales agent can log in to the same web platform and speak to each other over video conferencing and screen-sharing. To acquire customers, it is important for insurers to pitch products that match the customer’s financial goals.

To this end, Max Life Insurance takes the help of the social data of prospective customers, which is available on various platforms. “We use smart algorithms and machine learning to segment our customers, and artificial intelligence models on right risk selection and pricing,” says Suhail Ghai, executive vice-president & head of information technology at Max Life Insurance. “We also undertake real-time integration with bancassurance partners, customer relationship management and industry databases to deduce more about the customers. This helps us cut journey times for new customer on boarding to less than 10 minutes, with minimal documentation.”

Another major challenge before insurers during the pandemic has been to carry out medical tests of customers, as most are reluctant to visit diagnostic centres. Aditya Birla Sun Life Insurance therefore uses tele-medicals to conduct medical check-ups wherever possible. “A visit to a diagnostic centre is arranged only in cases where medical tests are absolutely required,” says Kamlesh Rao, managing director and chief executive officer, Aditya Birla Sun Life Insurance.

ICICI Lombard on its part uses a medical underwriting bot that asks customers health-related questions through an interactive voice system and, based on the responses, applies the underwriting lens to segment them. This helps decide which customers are safe from risk and can be directly issued a policy, and which need to be evaluated further by a medical professional. In most cases, the medical evaluation is done by a doctor over the phone. “This process has, in many cases, eliminated the need for medical tests to be done by prospective customers,” says Nayak of ICICI Lombard.

Even though the lockdowns have now been lifted, most insurers plan to stick with digital selling platforms. Earlier, they used digital platforms to engage with only those customers who came to them online; now, they interact with even offline customers digitally, to minimise travel and ensure faster customer on boarding. “After the unlocking, we opened our branches as per government norms. However, we were conscious that people are wary of touching documents. Which is why we try to provide them with a touchless user interface,” says K V Dipu, head, operations and customer service, at Bajaj Allianz General Insurance.

The company also provides voice-based services by integrating its chatbot with Alexa and Google Assistant. Moreover, it has deployed barcodes. Customers merely need to scan the barcodes, and their requests — policy issuance, refund processing or claim filing — get fulfilled. “Digitisation has been a great hit with our customers. Digital adoption has been significantly ramped up to 80 percent, while grievances have fallen by 90 percent. We were able to sell close to 3 million policies and settle around 1.5 million claims digitally during the lockdown period,” Dipu adds.

(The writer is Subrata Panda.) TOP Source

220 Covid-19 insurance claims pending with insurance firms till Sept 17, Parliament told - The Pioneer - 21st September 2020

As on September 17, at least 220 Covid-19 insurance claims are pending with the insurance companies. Of these, in 212 cases, complete claim documents are to be submitted by the states and eight claims approved by the insurance company are pending for the nominee details, said the Government in Parliament on Sunday.

The Centre has, through a number of letters, asked states and Union Territories to ensure swift processing of insurance claims under the ‘Pradhan Mantri Garib Kalyan Package’ to frontline health workers fighting COVID-19, Minister of State for Health Ashwini Choubey said in a written reply in Rajya Sabha. Replying to another question, the Minister said that disposal of biomedical waste including PPE kits worn by healthcare professionals and public became a challenge during the ongoing Covid-19 pandemic.

Replying to another query, Choubey said India has 15,403 Covid-19 treatment facilities with 15,54,022 isolation beds, 63,758 ICU beds and 2,32,505 oxygen supported beds while so far, a total of 344.78 lakh N95 masks and 141.46 lakh PPE kits have been supplied to states, Union Territories and central government institutions.

“There is no shortage of PPE kits and ventilators in the dedicated Covid-19 facilities across the country,” the minister said. TOP Source

Commit to a policy before buying it – The Hindu – 20th September 2020

With no social security scheme worth its name covering a majority of the citizens of our country, it has become imperative for everyone to opt for individual insurance schemes or policies.

While doing so, many commit some common mistakes, as a result of which those policies do not help meet the intended goals. The purpose of this article is to create awareness among those evaluating an insurance policy. Some of these erroneous approaches appear silly but happen all the time.

The usual missteps ‘The adviser is my brother-in-law or childhood friend or classmate. Hence, I have to take a policy otherwise he may feel bad.’ But, after taking the policy, it is you who will actually end up with bad feelings. So, initial refusal is always better than refusal at the final stage.

Second: ‘The adviser is virtually after me, pestering constantly to take a policy. I need to take one and get rid off him at the earliest.’ But once you take a policy, you might have succeeded in getting rid of the adviser but not the policy itself as it is meant for a lifetime.

Three: ‘I need a policy to avoid tax or avail myself of tax concessions under section 80C.’ There are a host of other products eligible for tax concession under section 80C such as PF (which is mandatory for every employee), APF etc,.

Four: ‘Just because every earning individual has a policy, I too should have one.’ Just like one has a table, sofa set or a chair, should you also buy an insurance policy just so that the policy bond may be displayed in the showcase?

Five: ‘For the fear of mortality.’ One wants to take a policy whenever one encounters such a situation concerning near and dear. An very small percentage of policyholders fall under this category.

Taking a policy is easy and simple but to continue the same after the initial euphoria subsides is critical. That is why it is important to continue the policy till the end of the term. Because discontinuation or lapsation of a policy is a loss both to the policyholder and the insurance company alike. For the policyholder, it will be like holding a torn umbrella which does not cover him or her come rain or shine. For the insurance company, it will be like a single plant that is neither watered nor nurtured in an entire field, ultimately withering away.

Above all these lies the fact that one’s commitment towards one’s family viz. parents, spouse and children, which leads to the decision in taking an insurance policy. These commitments are to be kept in mind while taking a policy. After all, an agent or a broker or an intermediary works to earn a commission on his sale. But the client needs to delve into all aspects of an insurance firm before taking a policy. Responsibilities at every stage of life are to be articulated in advance and need to be planned in a foolproof manner to absorb any unforeseen shocks or incidents.

Be it life, vehicles or medical insurance, one needs to be doubly cautious and careful while buying policies. The purpose for which they are being taken should be fulfilled in the first instance.

Enter young The younger the age, the lower will be the premium. As age advances unnoticed, responsibilities increase, which require more caution and planning. Term insurance for a longer term taken at a younger age, commensurate with one’s income, costs a lot less.

With no social security scheme to protect us, one should also plan for one’s retirement expenses, starting from the time of joining employment. Due to its longer gestation period, this fund grows exponentially to meet one’s post-retirement expenses.

ULIPS and SIPs are also to be considered at an early age because corrections in the markets can be neutralised over a longer term.

Once a person gets married and has children and the need for vehicle and housing loans crop up, one should plan for different goals at different times. Mediclaim for the entire family and children’s education or marriage needs decide the type of insurance protection one needs at this stage of life.

There are several schemes offered by insurers.

They are broadly traditional insurance policies that combine risk coverage and savings and where the returns at the end of the term are defined: term insurance policies (pure risk coverage with zero returns); ULIPS (which are exposed to stock market nuances and where returns are not at all defined); pension policies (longer gestation periods with defined returns that make them attractive) and health policies (which cover hospitalisation expenses in case of any illness).

An insurance policy serves a purpose in the same way an estate created in one's family’s name does, if free from encumbrances. Hence, one must think twice before taking a policy, be it for a vehicle, a house, a person or his health.

(The writer is M.S.R.A.Srihari.) TOP Source

INSURANCE REGULATION

Nearly 95% of SMEs uninsured: Irdai – The Times of India – 24th September 2020

Insurance regulator Irdai has said that the Covid-19 pandemic has highlighted the need for insurance in the MSME sector where only 5 percent of the businesses are insured. To make up for this shortcoming, Irdai will be directing insurance companies to mandatorily offer a standardised cover for this segment.

“A standardised product will reduce disputes in interpretation of insurance conditions and make it easier for small businesses to pick up insurance plans. I also urge all businesses to take out group health insurance policies for workers and employees,” said Subhash Chandra Khuntia, chairman, Irdai. He said that such group products were necessary in the interest of workers and also to instill confidence in them at a time when they are afraid to come to the workplace.

Speaking the Indo-American Chamber of Commerce’s annual convention series on banking, financial services and insurance, Khuntia said that besides providing protection to businesses insurance helped provide investment resources for the economy. “The insurance industry collects about $100 billion a premium annual and has $600 billion of assets under management, which is available for economic development. This is going to grow phenomenally in the next few years,” he said.

Speaking at the same event, LIC MD Vipin Anand said that the pandemic has heightened the awareness of insurance and given the uncertainty protection has become a basic need. “If we have to insure 100 crore Indians in life and health it will require a large amount of automation. We have taken advantage of the pandemic period to re-engineer our work processes. By end of September, we would have digitised all our processes,” said Anand.

At the same time, customers were still more comfortable from buying life insurance from someone face- to-face, which would mean that industry would need 50 lakh agents. According to Anand, there was a need to rewrite the policy bond and design one which a lay policyholder can understand, which would help in addressing the trust deficit in respect of products.

(The writer is Mayur Shetty.) TOP Source

Irdai permits insurers to conduct video-based KYC - Financial Express – 21st September 2020

Regulator Irdai on Monday permitted life and general insurers to conduct KYC of prospective customers through Video Based Identification Process (VBIP), a move that will help company officials to complete mandatory requirement online during the pandemic.

The objective of the VIBP, Insurance Regulatory and Development Authority of India (Irdai) said, is to leverage various electronic platforms to simplify know your customer (KYC) process and make it customer-friendly.

Insurers may undertake live VBIP by developing an application, which will facilitate the KYC process either online or face-to-face in-person verification through video, the regulator said.

“This may be used for establishment/continuation/verification of an account based relationship or for any other services with an individual customer/beneficiary, as the case may be, after obtaining his/her informed consent…,” Irdai said in a circular. It further said all accounts opened or any service provided based on VBIP should be activated only after being subject to proper verification by the insurer to ensure that integrity of the process is maintained and is beyond doubt.

Also to ensure security, robustness and end-to-end encryption, the insurers shall carry out software and security audit and validation of the VBIP application as per extant norms before rolling it out and thereafter from time to time.

Irdai also stressed that insurers should take the assistance of latest available technology – including Artificial Intelligence (AI) and face matching technologies – to strengthen and ensure the integrity of the process as well as the confidentiality of the information furnished by the customer/beneficiary.

However, the responsibility of identification will rest with the insurer, it added. The Reserve Bank of India has already amended the know your customer (KYC) norms, allowing banks and other lending institutions regulated by it to use video-based customer identification process. TOP Source

LIFE INSURANCE

Embedded Value: When claim is rejected due to suicide clause - Financial Express – 25th September 2020

Life insurance covers the risk of death during policy term but one cause of death is excluded from the risks that the insurer undertakes for paying the sum assured under a policy. When the policyholder dies “willingly” within a stipulated time frame, generally one year from the commencement of risk under a policy or from the date of revival of the policy, which is considered a contract ab initio, the claim filed is rejected.

Rejection of the claim is based on the final police report which includes the inquest report as well as the post mortem report so that the insurer doesn’t appear to be taking arbitrary decisions in this regard. Sometimes the claimants’ dispute rejection of such claims but this procedure is a settled practice in the insurance industry and confirmed by the judiciary too.

One-year clause The suicide clause is invariably included in the life insurance contract around the world. Suicide is looked upon by law as a criminal act, but judiciary views suicide as a manifestation of great stress due to a variety of factors; hence, it treats suicide with abundant care. Hence rejection of life insurance claim following an episode of suicide within the period of one year is handled with utmost care.

Some companies are more empathetic and they refund the premium paid partially or fully. However, one year is supposed to be a fairly reasonable time for a person to rethink on the plan or decision to take the extreme step, hence the suicide clause is a safety against any moral hazard in undertaking risk on someone’s life.

Insurance companies globally hedge themselves against such risk through such clauses in the policy terms and conditions. However, if a policyholder commits suicide anytime after one year (or two years in some cases) of commencement of risk or revival of the policy the insurer is bound to settle the claim for the full sum assured. It is thus treated as a normal claim.

Suicide is a tragic event. Generally, it happens when people face hopelessness due to some reason or other and can no longer suffer hardship, exploitation or oppression, mental or physical. But at the same time it cannot be denied that mostly suicide is a well-meditated act on the part of the person resorting to this method of ending one’s very existence.

Claims process According to the National Crime Record Bureau during 2019, every fourth minute one person claimed his life in our country by committing suicide. This is alarming as some of them could be policyholders. Not getting any claim amount after losing the bread earner could be a very traumatizing experience. But people have to understand the rationale behind the “suicide clause.” Insurers do not undertake the risk of planned death and no insurer can afford to do so. It is also farfetched to think that someone could believe that his family would be happier in his absence with the sum provided by the insurance company. Hence the insurance claim payment can never be sufficient reason to plan a death claim.

Often the police come across a suicide note which makes the enquiry easier but absence of any such proof makes the case complicated giving rise to several theories. All of these situations make the job of the insurer more difficult and complicated.

The claimants will have to have patience in such a situation and submit the final police report to the insurance company before expecting it to settle the claim when the policyholder’s death is suspected to be a case of suicide. The silver lining in insurance claim settlement process is that suicide after one year is considered as good as death from natural causes and claims are settled without hassles. In case of any problem the case must be brought before the insurance ombudsman or contested at the consumer forum.

(The writer is Kamalji Sahay, former MD & CEO, SUD Life.) TOP Source

Why buy Term Insurance despite the increase in premiums? - India CSR - 23rd September 2020

Pandemic has led to a very special rather weird situation in the country where people are fearing the contraction of the deadly virus. Since it has started creating an environment of fear, more and more people are taking life insurances and term insurances seriously. Interestingly, pandemic fear is not the only reason for people buying term insurance.

The growing mortality rate and unpredictable turns of life with respect to health, increasing lifestyle diseases due to sedentary lifestyle also constitutes the increased sale of term insurance policies. Due to this, many insurance companies have increased their premiums across tenures.

You might think that increasing premiums for a fixed life cover might have led them to drop the idea of buying term insurance. Well, that is not the case. In fact, the graph is still moving upwards. In this article, we will give you a few reasons that will convince you to buy term insurance despite the increase in premiums.

Reasons to Buy Term Insurance despite Increasing Rates Term insurance policies are pure protection covers that help you take care of your family’s financial security and needs way before time. All you have to do is choose the right cover and pay a small premium every year towards it. There are various reasons for increasing term insurance which you should take into consideration as the premiums are affected due to increasing critical problems.

We will discuss each one in detail to help you understand why they are important.

Increasing mortality rate The year 2020 has not been the best year for India. We have seen a spike in death rate not only due to the pandemic situation but also due to floods, earthquakes and storms in different parts of the country. Due to this, death claims have increased over the last few months.

The premiums are directly proportional to the mortality rates and expected future claims. There is an expected number of claims that any insurance companies decide based on the present scenario and then a premium amount is decided. In case, the gap is increasing between the expected and actual claims, premiums rise in order to bridge the gap.

Rising demand for term insurance There are many term insurance plans in the market and the demand for them is increasing due to the rising awareness among people. You can buy term insurance online and various websites help you compare term insurance plans. The fear of death due to the increasing pandemic situation has also led people to realize the importance of term insurance plans in India.

Another reason for the surge in demand for protection plans is a low term insurance premium and flexibility in opting the death benefits. Also, the rising demand for term insurance is not a time-being thing but it might keep increasing over time.

Should You Buy A Term Insurance Now? Yes. That is a short version of the answer to your question if you should buy term insurance. But, if you think increasing term insurance premiums might reduce the demands, you are wrong.

Term insurance is becoming an essential investment for everyone especially if you are in your early adulthood. However, the spike in premium should not hold you back from investing in term insurance plans.

You can do a few things before buying a term insurance. For example, check the background of the insurance company. Look at their history and reviews online. Many websites on the internet can help you recognize a term policy that best suits your requirements.

Know your requirements before buying one and read all policy document twice if needed before you sign them. Make sure you see the claim settlement ratio of the company. The more, the better.

We hope you got your answer and know that rising premium rates shouldn’t bother as the main aim is to safeguard your family from financial hardships in your absence. If you buy the right term insurance at the right time, the benefit would be as good as low premium still. So, what you waiting for, get term insurance for you and your family, now. TOP Source

Pandemic pain: Life insurers face challenge in falling persistency levels - The Hindu Business Line – 23rd September 2020

Amidst signs of some recovery in sales, life insurance companies continue to grapple with low persistency levels, especially in market- linked and endowment products.

Experts and players attribute this to the current Covid-led economic crisis and concerns about job losses and salary cuts along with volatility in markets that have impacted products like ULIPs. However, there continues to be demand for protection products given the current uncertainty, they said.

“Historically, in the pre-Covid times, there has been an uptick in the persistency levels for life insurance companies. But the pandemic has led to a new set of challenges for many customers. While it has created much more awareness about insurance and led to higher demand for term plans and protection products, persistency ratios will remain under pressure, especially for products that are market linked,” said Saurabh Bhalerao, Associate Director, CARE Ratings.

Option for customers He also noted that customers may choose to defer premium payments or opt for lower value in case of plans with a higher premium due.

Santosh Agarwal, Chief Business Officer, Life Insurance, Policybazaar.com, said renewals on protection products have not been impacted and there has in fact been a demand for term insurance since the pandemic.

“On the savings side, both in endowment products and ULIPs, there has been a slight de-growth in terms of persistency. This could be because of affordability due to concerns about income and jobs,” she said.

The Insurance Regulatory and Development Authority of India too has urged the industry to ensure 13th month persistency at least 90 per cent and 61st month persistency at a minimum of 65 per cent.

Insurers are keeping their fingers crossed about a recovery across these businesses. With the second quarter of 2020-21 now coming to a close, insurers will throw more light on persistency levels in their reporting data.

At the recent CII Insurance and Pensions Summit, IRDAI Chairman Subash C Khuntia had said the regulator would be monitoring these ratios.

A report by Motilal Oswal last month noted that due to the lockdown in April and May as well as choppy markets, persistency trends were weak across cohorts as customers utilised the grade period in making renewal payments.

“Among the segments, decline was seen in persistency in ULIPs, while improving trends were observed in protection,” it said, adding that most insurers indicated that renewal trends were gradually picking up and better trends would be seen in the coming quarters.

In the first quarter this fiscal, 13th month persistency declined for SBI Life Insurance to 81.6 per cent from 86 per cent last fiscal and for HDFC Life to 87 per cent from 90.1 per cent in 2019-20.

(The writer is Surabhi.) TOP Source

COVID19: Life insurance sector struggling to recover – KM – 22nd September 2020

COVID19 has not only crippled the life but has given major blow to economy all over the world including India.

Like other sectors, life insurance companies have reported a contraction in new business premiums, four months in a row.

As uncertainty prevails over salaries and job loss, there are less takers for new insurance policies. This has resulted in the industry losing around four million policies and premiums worth around Rs 45,000 crore.

“The industry as a whole lost four million policies and around Rs 15,000 crore of new business premium. Since the lockdown happened, people were saving money for necessities. So, around Rs 30,000 crore of renewal premium did not materialise,” Raj Kumar, managing director of Life Insurance Corporation (LIC) said.

Rating agencies quote higher numbera. According to Care Rating, the life insurance sector witnessed a 18.6 per cent drop in the first year premiums to Rs 49,335 crore in the April-June quarter of the current financial year. Insurers claimed that even when business was bouncing back to normal from August, growth in renewals is only marginal.

“The increase in new businesses are driven by HNIs. There have been a substantial amount of defaults, especially in the lower and middle income group. which means only high value renewals are coming. This year certainly it will not remain the same,” another LIC official added.

This is certain to impact future business. According to data and analytics company Global Data, the life insurance business in India is likely to contract in 2020, declining 0.9 per cent this year, compared to 8.8 per cent growth recorded in 2019, mainly on account of civic and financial uncertainties due to job loss and no growth in income. The trend is similar for private insurers too. “There is demand for health insurance products. But we have witnessed lukewarm response in life insurance,” an official from Bharti Axa Life insurance said. TOP Source

Life insurance sector struggling to recover from COVID-19 hit - The New Indian Express - 21st September 2020

Starting March, life insurance companies including Life Insurance Corporation have reported a contraction in new business premiums, four months in a row. As uncertainty prevails over salaries and job loss, there are less takers for new insurance policies. This has resulted in the industry losing around four million policies and premiums worth around Rs 45,000 crore.

COVID-19: Wakeup call for millennials to invest in term insurance for a secure future - Financial Express - 21st September 2020

A common misconception about millennials is that they don’t give a shit about insurance, given their lousy and “I know what’s best for me” attitude towards life. But ask any savvy millennial and they will tell you that the COVID-19 has driven home the point that everyone needs insurance, particularly term insurance aka life insurance. Thanks to the unexpectedness of healthcare events and expensive medical care costs, be it COVID-19 or chronic ailments, term insurance plans are best for people who have a FOMO on good health insurance packages.

Recently Gen Y have been seen purchasing health and life insurance for the COVID-19 cover in record numbers. Besides basic medical expenses, the financial security of their families is what works overtime on millennial minds. But naturally, term life insurance can play a great role in offering financial and emotional security.

Life insurance policies offer death-risk cover for certain periods. In case a policyholder takes off for heavens, the nominee receives the sum assured amount either as a one-bullet payment or via monthly payouts. Life insurance provides max coverage at minimum premiums. Millennials benefit by investing in such a policy at a lower premium because of their lower age of entry.

Approx. 426-million millennials in India make up about 34% of the population and about 47% of the nation’s total working guys and gals. Tech-savvy as ever, millennials are gung-ho about online term insurance policies because buy Life insurance online is as easy as going through your Facebook on the toilet seat.

So, let me show you how much more I know about this than you, let’s get on terms with various insurance policies available. In India, seven types of life insurance policies exist. The first is term life insurance – highlighted above. The second is ULIPs (Unit-Linked Insurance Plans), which offer the triple benefits of insurance, wealth creation and tax savings, things millennials dig. ULIPs are so named because the premiums are invested in funds as well as risk cover.

Third come endowment plans – a combo of insurance coverage and investment opportunities. In case a policyholder goes to the happy hunting grounds, the sum assured goes to the nominee or the family. If the insured person outlives the policy period, s/he receives the sum assured plus the accumulated bonus. Fourth are money-back policies. Here, the insured person receives specified sums at intervals during the policy period and a sum assured, either on death or maturity. Accrued bonus is also paid on maturity.

The fifth is whole life insurance, which covers an insured person during his/her lifetime or, in some cases, up to 100 years. If the policyholder passes away, the nominee receives the sum assured. If the person lives past 100 years, s/he is paid the maturity amount.

Sixth comes the child plan. Such an insurance plan builds the capital base for milestone events in the child’s life. These can range from higher education or overseas studies to marriage and other events. Most child plans offer one-time payouts or yearly payments once the child reaches maturity at 18.

The seventh is the retirement plan, which helps in building substantial capital for ensuring stress-free retirement years. Policyholders can opt for a single payout after reaching 60 years or annual payments. If the insured person meets the Maker, the nominee receives a payment as per coverage or the fund value or 105% of the premiums paid. Isn’t that cool?

According to need or greed, millennials should decide which term life policies set with their life cover and investment goals. Moreover, as the pandemic has proved, even the best plans of individuals and institutions can go for a six when a black swan event strikes. The situation is worse if a person is a sole breadwinner and suddenly slinks away into everlasting peace.

In such scenarios, term insurance plans are best for millennials since they generally offer insurance covers for predetermined periods of 30, 40 or 50 years. Going by individual needs, one can opt for comprehensive coverage or go for policies by buying beneficial add-on riders. To reemphasize, purchasing term insurance early can offer more bang for the buck as the low premiums remain constant throughout the term even if the insured person’s risk profile changes.

As medical emergencies are notorious for pushing people into bankruptcy, term insurance ensures the family has something to fall back on even if the earning person is now in RIP mode. For caring millennials, there can be no better motivation to purchase a term insurance plan than the security of their loved ones.

(The writer is Akash Anand.) TOP Source

Covid could be "penny drop" moment for insurance companies: Vibha Padalkar, CEO, HDFC Life - The Economic Times - 21st September 2020

Covid-19 has put the spotlight on the need to insure lives, and the pandemic could well be the “penny drop” moment for an industry that had hitherto struggled to sell protection products, Vibha Padalkar, MD and CEO of HDFC Life tells ET's Ashwin Manikandan in an interview.

The coronavirus pandemic has impacted nearly every industry in an adverse manner. For the insurance sector the perception is somewhat different. What have been the positives and negatives? Life insurance in India has grown in a particular way led by savings-based products. We as a risk management company transfer the risks faced by an average person on the street to ourselves. And that is the reason why we are insurers and not asset managers at core.

There is now a slow realization that if you start early, it doesn’t cost much. The life companies unlike general cannot reprice premiums regularly as well – and hence there is a value in locking in early. This is a penny drop movement for life insurance especially for term products. We always compare how Chinese insurers have over 50% share of term protection while for India on a weighted premium basis it is in single digits. This could change with the pandemic and we are definitely feeling a pull.

While the behavioral shift is happening, there are also concerns of massive job losses. Would this act as an impediment? Our market segment is largely the middle class. We are keen on targeting Bharat and not just India and what we have seen is in the burgeoning middle class there is a fear of job loss and salary cuts.

In such a scenario, we are suggesting people to themselves to get some cover. While the average ticket size has fallen to 75% than pre-pandemic, there is a definite pull towards getting insured. Another factor is an increase in disposable incomes. People are spending less on discretionary and as more people gain

20 awareness on having life insurance, we feel the penetration will also improve. In terms of product mix for life insurers, it has always been savings over pure protection. But that’s a low margin business.

What can be done to make it more profitable? Endowment plan gives topline, and other products contribute to the bottom line. Protection, for example, if done sensibly, can be quite a high profitable business. However, three protection policies need to be sold to match the premium that a single endowment product brings. Therefore, we have to balance the mix. Products like riders and annuity are also good to have for building strong bottom lines.

You had set aside a provisionary fund of Rs 41 crore for settling covid-19 claims? Has that been sufficient as of date? To be honest, we have not faced a lot of claims. We have settled 235 claims since March with sum at risk is about 22 crore and very much in line with our actuarial funds; we didn’t have to dip too much into it. It’s still an evolving situation and I wouldn’t want to make any predictions yet.

Separately, studies have shown that the overall deaths in general have gone down. This could be because of reduced accidents which to an extent has had a neutralizing effect on the impact of coronavirus.

It is well documented that guaranteed return products have contributed to your growth and the industry as well. Are insurer companies in the process piling up risks? Last year when we launched the product it caught the imagination of customers. Over 60% of the business in that quarter was through that product. However, now we have brought it down to 25%.

We constantly monitor the segment and reprice for new policies according to interest rates. Then there is asset backing as well where we write against long dated government paper which provides us the hedge.

LIC is set to be listed soon. What kind of impact would this have on the life insurance market? The biggest impact is that it would bring transparency. Today, when listed companies make disclosures it’s not just on accounting profits but also on long term profit emergence and value creation. The listing of LIC is of utmost importance as it’s the largest financial institution in the country. It’s not a welcome situation, even for India Inc, where the largest FI is unlisted. Like it did for us, the listing will bring more vigor to LIC as well.

The demand for investment-linked products have contracted. Is this a cause of worry? We follow a balance product mix and we like Unit Linked Investment Products (ULIPs) to be at 25% of the mix. We are able to sell enough to maintain it but for companies having 60-70% mix could struggle. There is a dampener for any investment linked product where there is volatility in markets. But that’s where the balance in product mix comes to play.

Because of increased automation and digitization, there is a negative perception about the future of agent networks. Can both co-exist? I think they definitely go hand-in-hand. See, there is an India, and, there is a Bharat. There are young people adept at doing their own research to purchase online while there are older people who like assistance and hand-holding.

What is heartening is our agents are at the forefront of embracing digital. Maximum number of people getting trained are on our digital platform. While banca partners are targeting branch walk-ins, the financial advisors are getting savvy with digital to push digital through existing channels. It’s not an ‘either/or’ situation but rather the merging of ecosystems in a seamless form without borders.

(The writer is Ashwin Manikandan.) TOP Source

Insurance for MSMEs is a key ingredient towards nurturing the Atmanirbhar Bharat – SME – 20th September 2020

With over 70 million units, India has one of the largest micro, small, and medium enterprises (MSMEs) base in the world. According to estimates provided by Ministry of MSME (Government of India), the sector contributes a massive 38 per cent to India’s GDP and accounts for 40 per cent and 45 per cent towards export and manufacturing output, respectively. MSMEs are employment generators, innovators, factors in the supply chains of larger enterprises, and important contributors to gross domestic project.

Though cash optimisation is the need of the hour, MSMEs are innovating during this period and striking interesting synergies. The pandemic and the resulting lockdown have impacted the small businesses units, which already operate on a tight liquidity position and credit availability. While the Government, through its several relief schemes, is aiming to address the situation, there is all-pervasive need for creating a safety net for small business owners.

Finance is the key to success in any business, and this holds especially true for MSMEs. Small businesses require funds to buy equipment, refill inventory, expand operations and increase working capital.

Traditionally, MSMEs owners do not have sufficient awareness of business risk management. It makes them vulnerable towards several factors such as theft or act of God, bad health, loss of income due to reasons beyond their control etc. They also need to consider Employee benefits, assets & liability management, and family protection. Therefore, MSMEs need to draw up a prudent financial strategy to navigate such unplanned incidents.

Surprisingly and according to a FICCI-KPMG report, only 10 per cent of employees of SMEs have health cover, and only 0.1 per cent of other core property risks like fire, marine etc. are covered. A lack of awareness, coupled with thin margins, makes insurance a low priority and so it is often neglected by SMEs. And in all the need to protect margins, sometimes these entrepreneurs forget the basics – protecting the very asset against calamities that is their dream! Sometimes the SMEs leave insurance to the lenders that they have borrowed from in which case most of the times the covers may be lower or different than what the entrepreneur should actually have.

Insurer companies have the experience and expertise to quantify the probable risk and offer insurance products that help businesses protect against these. However, we have seen over the years that most MSMEs do not have access to quality insurance from subject matter experts. Even today, the common perception is that insurance translates to either life insurance or health insurance.

The fact is that insurance can cover almost every aspect of the business, be it damage due to natural calamities, supply chain disruptions, unfavourable market movements, or even untimely demise of an employee. Moreover, insurance products can be customised to fit the requirements of industries and small businesses. Depending on the industry and geography, there are several cost-effective and overarching insurance solutions available for them to stay strong with a firm growth cycle. Thus, including insurance as a part of long-term business investment is critical for MSMEs, which may not have huge cash reserves or funding to absorb market shockers.

In most cases, the financial fortunes of their organisation are intricately linked to their well-being. Most MSMEs borrow heavily from the market, and hence there is an obvious need for Life Insurance. To address the problem of under-penetration of insurance among MSMEs, Insurance Regulatory and Development Authority (IRDA) along with insurance companies are taking a step towards educating the MSMEs about various insurance solutions and create awareness on the need for financial security for their business.

Recently, Aviva India partnered with CII for Money Mobility Week, a virtual platform to make over 1000 MSMEs financially self-reliant through connectivity with the financial institutions along with other allied service providers and a step towards the materialisation of the Government’s announcement of special financial package for MSMEs as part of ‘Atma Nirbhar Bharat Abhiyan’. As people are spending more time on digital platforms nowadays, companies can offer a customised and transparent solution to cater to the specific needs of MSMEs.

A case in point is Aviva SME Assist. It is a digital tool that helps small business owners understand their risk profile within three simple steps. The industry needs similar ‘Do it Yourself’ solutions which help MSMEs take more informed financial planning decisions.

Taking lessons from the recent crisis, it is vital to chalk up an effective crisis management plan that will take into consideration both immediate and long-term impact. Hence, from creating a financial back-up, investing in insurance policies and reservoir of funding, to have a robust digital and technology-enabled ecosystem that can ensure minimum damage to productivity needs to be in place. Supporting MSME sector development is essential to employment and economic growth.

As such, reducing the credit gap and improving access to finance is crucial, especially credit for MSMEs. In addition to initiatives targeting availability of executable collateral and credit risk assessment, the improvement of MSME risk management systems is important. At the same time, as insurers, we also need to simplify the entire customer journey, i.e., evaluating, buying, and claiming the insurance benefits to secure their future.

It will help MSMEs secure their future and play an even bigger role in India’s economic growth in the days to come. If anything, the lockdown can help us learn important business lessons that can help us not only survive but also thrive and be well prepared for any other crisis that might come our way in the future.

(The writer is Anjali Malhotra.) TOP Source

Looking for insurance policies? Consider ones that waive health check-ups - Business Standard - 18th September 2020

The pandemic has brought home a new-found realisation of risks to our lives. This has sparked demand for annuities, life and health insurance products, according to media reports. In keeping with these times, insurers are now offering products where you don’t have to step out of your house to undergo a medical check-up. People are increasingly buying what has always been a push product.

Says Melvin Joseph, founder of Finvin Financial Planners: “There has been a sea change in people’s mentality after Covid, with many looking to buy high-value term policies with a sum assured of Rs 1-2 crore.” Earlier, endowment and money-back policies sold more, but that is changing. Says Joseph: “The returns are barely 3-4 percent on traditional plans. If you are your family’s sole breadwinner, you need a high-value term plan. Anyone with a white-collar job, dependent spouse, children and a house should have a term cover of around Rs 2 crore nowadays.”

Here are some factors that you should consider when selecting an insurer: Brand matters: Purchase term insurance from a reliable player. Says Naval Goel, chief executive officer and founder of PolicyX.com: “This is a long-term, high-value product. Buy the policy from a big, reputable brand that will still be around 30-50 years later.” The claim settlement ratio reveals the percentage of claims the insurer has paid out during a financial year.

Higher the ratio for an insurer, the better it is. This information is available on insurers’ websites. Medical and non-medical policies: Policies usually require a medical test, but nowadays there are some that waive this requirement. Take, for instance, ICICI Prudential’s I Protect Smart Policy launched exclusively with Policy bazaar. Says Santosh Agarwal, chief business officer-life Insurance, Policybazaar.com: “This non- medical offering does not require you to undergo a medical test. There’s no verification call from a doctor either. This policy is machine underwritten.” This means you get the policy if you meet a few predetermined criteria.

For some, however, it might be a good idea to undergo a medical test at the time of purchase, or at least a verification call with a doctor. Says Pankaj Mathpal, managing director, Optima Money Manager: “If you have a medical history, a complicated case, or the simple need to explain things, a policy where a physician verifies the medical papers or talks to you on a call and goes through your history works better.”

Adds Goel: “If you have a pre-existing condition, disclose everything and opt for a policy with a compulsory medical test, and not one based on self-declaration.” Never lie at the time of purchase. Says Joseph: “If you provide misleading information, it could lead to rejection at the time of claim.” Finally, diversify to reduce risk. If you are buying a Rs 5-crore term cover, buy two policies of Rs 2.5 crore each from separate insurers. “In case one claim gets rejected, the other might be accepted. Diversifying is also beneficial since these are very long-term products,” says Goel.

(The writer is Bindisha Sarang.) TOP Source

ULIP: Tax advantages of Unit Linked Insurance Plans - The Financial Express - 18th September 2020

ULIP or unit-linked insurance plan offers you life cover along with the opportunity of investment. A portion of the investment is towards insurance cover and the balance towards investment in a fund consisting of equity or debt or both. The investment serves a twin purpose of life cover and earning a return on investment. Investments in ULIPs have a lock-in period of five years.

The investments in ULIP are managed by fund managers and also offer the benefit of switching funds depending on the market conditions. In case the markets are volatile or returns are not stable, you can switch from one fund to the other options available under the ULIP. The switching is generally free up to a certain number of times and thereafter it is subject to the levy of a switching fee.

Traditional life insurance policies offer a reasonable return with bonus accruals along with the maturity amount. In comparison, ULIPs offer a return based on the market performance of the fund. Both are beneficial as long term investments in a horizon of 10 to 15 years. Let us have a look at the tax advantages of investing in a ULIP.

The investment or the premium payments made towards a ULIP are entitled to a tax deduction on a yearly basis. The premium paid qualifies for a deduction under section 80C as a tax-saving investment. You can claim a deduction for premium payments for a policy in your name, or in the name of your spouse or children. The deduction is within the overall limit of Rs 1.5 lakh per financial year. Also, the switching of funds within a ULIP is not liable to tax. You can switch as per your needs and within the options available to maximize benefits under the policy.

The maturity proceeds of the ULIP are exempt from taxation subject to the below conditions: – The premium paid should not exceed 10 per cent of the sum assured in case the policy issued after 1 April 2012. – In the case of policies issued before 1 April 2012, the premium paid should not exceed 20 per cent of the sum assured.

The sum assured refers to the minimum amount that is assured to the survivor under the terms of the policy. The ULIP policy meeting the above conditions on insurance premium enjoys a complete tax- exemption on maturity. There is no separate taxation of the realized value of the units held in the fund similar to the capital gains tax on mutual funds. In the case of the death of the policyholder, there is a complete exemption on proceeds received without any conditions attached to premium payments.

The risk in ULIP depends on the type of fund it invests in: – Equity funds: The risk is high for investments in the equity market securities. – Balanced funds: In the case of balanced funds which invest in a mix of equity and debt, the risk gets spread over the investments and stands minimized. – Debt funds: The risk is low in investments in the debt securities and returns are lower than equities.

ULIPs offer the tax benefits of deduction at the time of investment as well as exemption of the receipts upon maturity or death. While investing in a ULIP, one must choose the policy bearing in mind their risk appetite and the conditions under income tax law to claim a complete exemption upon maturity.

(The writer is Archit Gupta.) TOP Source

GENERAL INSURANCE

The pandemic has made investments in cybersecurity even more essential - Quartz India – 24th September 2020

Cyber risks have accelerated by as much as 500% since the first lockdown was imposed in India in March 2020.

The surge in communications and the wholesale shift to operate businesses online have increased the risk of cyber attacks by an order of magnitude. Reports suggest that cyber frauds and ransom ware constitute 36% of the mass risks and are perceived as long-term threats to the success of the organisations.

Lack of a safe infrastructure can lead to loss of sensitive information, market share competitive advantage, and ultimately impact the company’s reputation.

Increasing cyber frauds, growing concerns Fraudsters are quick in finding newer ways to break into official firewalls and conduct unethical data thefts. Cybercriminals are using the heightened digital footprint and traffic to find vulnerabilities, or to siphon off money.

They are launching Covid-19-themed attacks in the form of phishing emails with malicious attachments that drop malware to disrupt systems or steal data and credentials.

Attackers are creating temporary websites or taking over vulnerable ones to host malicious code. They lure people to these sites and then drop malicious code on their digital devices.

Clickbait websites pretending to be official government webpages have also resulted in major cyber frauds and have affected companies severely. The awareness around the different forms of cybercrimes is at its nascent stage in India and therefore, it is of prime importance to address the different scenarios that could be unfavourable.

A robust cyber security response In this new environment, investment in cyber security is more important than ever before.

A well-secured IT infrastructure along with a distinct cyber security policy can aid long-term growth of companies by protecting the data systems. It would be imperative for every business to put in place, internal practices to prevent cyber-attacks and at the same time have a good knowledge of potential risks related to current or potential issues.

For starters, companies need to quickly identify, prioritise, and highlight cyber risks that require immediate action.

They can do so with help of Cyber Risk Assessment reports. These reports use the latest cyber data/trends to instantly report vulnerabilities and identifies threats based on company’s current cyber risk. This lets companies identify and segregate the risky exposures which need immediate attention and helps companies save themselves from serious damage. This will also be more cost and time-efficient as compared to building these reports in-house from scratch.

Challenging times for companies venturing online The recent outbreak has magnified the need for businesses to foray onto the online platforms. Anticipating a flurry of cyber and telecom attacks is getting very difficult for companies that have extended their business online recently.

During the time of registration of the business online, companies might be prone to web jacking.

Various SMBs have reportedly been facing a number of cyber-attacks like hacking, phishing, logic, and email bombing, denial-of-service, salami slicing, data diddling, and many more.

It will be helpful for companies to secure their data and technology and opting for cyber-insurance can be a lucrative solution. Cyber-insurance is a specialty lines insurance product intended to protect businesses and individuals providing services for such businesses, from risks of IT infrastructure, information privacy, information governance liability, and activities related thereto.

Crucial aspects that are covered under cyber insurance are identity theft, social media liability, cyber stalking, malware attack, IT theft loss, phishing, email spoofing, media liability, cyber extortion, privacy, and data breach by the third party, financial loss due to cybercrime, etc. This can aid companies to tackle major cyber risks that are potential threats to their success.

Building a more sheltered set-up While ensuring the company database can make companies safeguard their confidential information, it would be fruitful for them to be prepared in advance to navigate the risks before they even arise.

There are various cyber risk report providers, that provide simple, easy to read, and user-friendly offerings that easily assess cyber risks related to businesses and fraudulent behaviours. It is now possible

26 to not only monitor company email addresses, corporate credit card, user account, and IBAN numbers but also provide alerts of the potential risks that may arise.

This highlights vulnerabilities and helps protect the companies before any disruption occurs to customers or suppliers through pointed reports.

It would be safe to say that the pandemic has brought forth some silver lining by accelerating the transition to digital avenues and introducing businesses with some more operational efficiencies. The unseen benefit is the fact that companies now would be more conscious of their cyber security. This will lead to the formation of a more safeguarded ecosystem wherein businesses will be able to assess, act, and monitor their operations for smarter risk management.

(The writer is Wilfred Sigler.) TOP Source

Important things to look at while choosing a critical illness plan - Financial Express - 23rd September 2020

Most people are trying to get themselves insured especially given the pandemic but experts say there are a lot of things policyholders should look at before zeroing on a policy. For instance, depending on the need of a policyholder, one can also look at disease-specific policies, such as critical illness plans.

Subramanyam Brahmajosyula, Head – Underwriting and Reinsurance, SBI General Insurance, says, “Buying a critical illness cover (rider or standalone policy) with a regular health insurance policy helps in covering the overall cost of hospitalization.” While a standard health policy covers the policyholder for expenses incurred during hospitalization, a critical illness policy offers a lump sum benefit in case the policyholder is diagnosed with any of the named critical illnesses covered under the policy.

A health insurance policy with critical illness cover provides a pre-defined lump sum for the diagnosed critical illness. Additionally, the hospitalization expenses for treating critical illness is also covered. Experts say this ensures full protection even after the diagnosis of critical illness.

Here are some points that you should look at while choosing a critical illness plan; Benefits in basic health insurance policy – Different insurers offer different benefits in their health insurance policies. Before choosing a right/suitable basic health insurance plan, conduct thorough research on the benefits of the policy and the ailments covered if you buy an add-on critical illness rider. History of family health – One of the essential aspects of health is the history of ailments running in the family. Hence, evaluate your family’s health history and consider purchasing critical illness cover with adequate coverage of the specific illness.

Illnesses covered – While buying a critical illness cover, experts say to look for the number of critical illnesses covered in a policy, as different companies have a different set of critical Illnesses covered in the policy.

Waiting period – There is a waiting period involved in critical illness plans. This waiting period starts from the date of the policy purchase until the time policy benefits kick in. Mostly, the critical illness insurance plans have a waiting period of 3 months to 4 years, after which a pre-specified illness is covered. So, experts say try to select a critical illness cover as early as possible.

Claim amount – Consider factors such as costs of treatment, medicine, and follow-up plans while deciding your sum insured. Brahmajosyula, says “Policyholders have the choice of opting for either a standalone plan or just a rider. Stand-alone plans, although more expensive, will allow policyholders a higher claim amount.”

Individual plan or family floater – You can buy a Critical Illness plan as an individual plan or even as a family floater. Note that some non-life insurers and standalone health insurance companies also allow CI to be added to a base Mediclaim plan. Based on the family members’ financial condition and medical history, you can decide to opt for either individual or family floater plan. Brahmajosyula, says “It is advisable to opt for a standalone critical illness policy as it offers the flexibility in choosing the sum insured and gives larger covers as compared to a family floater plan.”

Type of cover – If you are confused about getting a standalone or add on, note that standalone critical illness policy can be ported to other insurers, but critical illness rider alone cannot be ported.

Health insurance policy with critical illness cover provides a pre-defined lump sum for the diagnosed critical illness. Besides, the hospitalization expenses for treating critical illness is also covered, which ensures full protection even after a diagnosis of critical illness.

Should you consider a critical illness plan for your parents? Brahmajosyula, says “There are multiple reasons basis which one should consider buying a critical illness plan for their parents. First and foremost, if there is a family history of critical illness, especially for a disease like cancer, the risk is higher. Under such circumstances, one should definitely opt for a critical insurance plan.”

Additionally, if you are a sole earning member of the family, medial costs involved in providing treatment for critical illness for any of your loved ones can be financially crippling. Hence, it makes sense to invest in an insurance policy.

(The writer is Priyadarshini Maji.) TOP Source

Fire, health segments drive non-life insurers' rebound, Q2 may be better - Business Standard – 23rd September 2020

Non-life insurers have witnessed 3.6 per cent growth in premiums in the first five months of FY21, a signal that the second quarter (Q2) will be better for the industry than Q1 when firms saw a drop in premiums. Growth was driven by fire, engineering, health, aviation, and liability segments.

In the first five month of FY20, the firms had seen 14 per cent growth in premiums.

Till August this year, the motor segment witnessed 15.7 per cent reduction in premiums, with own- damage premium falling over 17 per cent and third- party premiums declining almost 15 per cent.

Muted growth in the economy and subdued activity in auto sales impacted motor insurance business. Holding the premium rates for motor third-party insurance steady at last year’s level may also have been a contributing factor, say experts.

The health segment, on the other hand, saw 13 per cent in rise, with retail health premiums growing at 33 per cent compared to the 10 per cent growth in group business and a fall of 26.6 per cent and 83 per cent in government schemes and overseas travel insurance, respectively.

According to CARE Ratings, the industry could return to growth in the second or third quarter of FY21. Overall, the outlook is expected to be stable in the medium term.

(The writer is Subrata Panda.)

TOP Source

Space Liability Pool a way out to cover space risks? - Telangana Today – 21st September 2020

With the Indian government deciding to allow the private sector to manufacture and launch rockets and satellites, the next issue facing the industry is the availability of insurance cover for third party liability against damages to property and lives a” on the ground and in space.

In India, space insurance is almost zero. “The Indian Space Research Organisation (ISRO) would take insurance cover only for satellites it launches from outside India through other space agencies. It does not insure its rockets or satellites launched from India by its own rockets,” G. Srinivasan, Director, National Insurance Academy (NIA) and former Chairman-cum-Managing Director, New India Assurance Company Ltd.

Srinivasan said, a consortium of four public sector insurers would provide insurance cover for ISRO satellites launched from a rocket port outside India. Presently there are two startups in India — Agnikul Cosmos and Skyroot Aerospace — which are in the process of manufacturing small rockets — with a carrying capacity of 100-300kg satellites — to low earth orbit (LEO).

Similarly, satellite manufacturing start-ups are also there in the country. Speaking at a recent space sector conference Niti Aayog member V.K. Saraswat said the launch of small satellites will be a dominant factor in the global space sector, as around 7,000 satellites are expected to be up in the skies by 2027.

He said that market researchers predict remarkable growth in the launch of small satellites. Over the last five years, 190 such satellites have been launched globally. The Indian rocket and satellite makers are hoping to get some part of that business.

For the insurers, to arrive at a proper risk cover and the premium rate, there is no India specific data as ISRO is the only player operating and did not take any insurance covers for its launches from India.

The rocket and satellite insurance can be divided into various phases — production, pre-launch, launch and in-orbit. During these phases the rocket and the satellite are exposed to varied risks. Apart from the risks at their factories, the rockets and satellites are also exposed to several perils while they are in transit from their factories to the rocket port and finally to the launch pad.

Once the rocket lifts off from the launch pad with the satellite, there is the risk of damage to the launch vehicle and its payload, lives and properties of third parties as well as to the rocket port. There is also the risk of damage to third party satellites orbiting in the skies.

“The damage to third party properties – orbiting in the space or on the ground — by a rocket built and owned by a start-up can break the companies in the nascent sector if they have to bear the liability in full,” Pawan Kumar Chandana, Co-Founder, CEO and CTO of Skyroot Aerospace had told IANS.

He wants part of the liability to be shared by the government at least in a graded manner – based on the turnover or number of launches or other manner. “Though there is no clarity on the space liability insurance, the premium should also not be high. On the other hand, the insurance for property damage on the ground could be like that of the aviation insurance,” Chandana added.

“In order to derisk new start-ups, the government should set up something like Nuclear Pool. Collect minimal premiums from the entrepreneurs and pay liability claims as per international norms and for the amount exceeded, be the insurer of the last resort. This is what the governments of the UK and US did after 9/11. Set up pools of last resort,” R. Raghavan, former GM, General Insurance Corporation of India, and the founder-CEO of the Insurance Information Bureau, told IANS.

According to NIA’s Srinivasan, the aviation insurance sector itself is a small segment in India and the space sector is minuscule in terms of the number of launches. “The space sector insurance is largely reinsurance driven. Globally the experience is not very adverse. There is sufficient reinsurance capacity available now and there is no need for a Space Liability Pool,” Srinivasan said.

Responding to that Raghavan said, the proposed pool could be a Capacity Pool (each insurer declaring the capacity up to which he can provide cover). “The government can provide the top-ups. The Pool can act as a buffer between the private sector and the insurers. Further, the Pool ensures safety and self-reliance. The compliance cost of insurance will be high for small space start-ups,” Raghavan, also the former Chief Operating Officer of ITI Reinsurance Ltd added. TOP Source

All you need to know about home insurance – Live Mint - 18th September 2020

We painstakingly build our dream home and take measures to protect our loved ones by installing security doors, cameras or essential locking systems. Most of us, spend most part of our lives paying our home loans but forget to take one essential protection measure, which is home insurance. This cover safeguards your home against unknown adversities that can cause substantial financial losses.

Overall insurance penetration in India is less than 1% and the contribution of home insurance is even lower.

Who can buy and what is covered? Anyone who is the owner or occupant of a property, including tenants, can purchase a home insurance policy. The policy can also be bought by organizations or firms who are owners of a property that is being used for residential purposes by employees, partners or other invitees. Home insurance provides

30 coverage against fire and allied perils, burglary, theft, terrorism, and among others, for the building, contents, jewellery and valuables, curios and works of art.

Additionally, those staying on rent can buy insurance for contents they own, as assets are also valuable and any damage to them can lead to financial loss. Owners can also opt for loss of rent cover, which helps in case your rental property gets destroyed due to some peril, and your tenant vacates it and you stop receiving rent. Some home insurance policies also give customers an option to buy a policy for a period as low as a day to a long-term period of up to five years.

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 actual economic loss and insured losses.

During natural calamities, damages to homes, properties, assets are substantially large, which are either insured or not insured. The losses that are insured by the policyholder are insured losses. Thus, opting for home insurance can shield not only the structure of your house but also the contents.

Protect content, valuables and portable equipment: Under home insurance, an individual can insure the contents at home such as appliances, furniture, clothes, portable equipment like cellphones or laptops. Valuables like your jewellery can be separately covered under home insurance as well. You can also insure your jewellery that you are wearing not just at home, but also while travelling anywhere in the world.

Covers risk arising due to fire and 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’s terms and conditions but also offers add-ons such as resettlement cover for situations 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 against liabilities: At times, physical or property loss of a third person caused by some accident at your home, such as a cylinder blast or perhaps a repair activity 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 between three types of cover. One, on an 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. Two, reinstatement basis, where the insurer will settle the loss by replacing the damaged property or item with a new one. Three, indemnity basis where the insured will get the compensation as per the market value of the house or item damaged after deduction for wear and tear.

Add-on covers: Home insurance also has add-on covers like loss of rent, temporary resettlement cover, public liability, pet dog insurance cover, ATM withdrawal cover, lost wallet cover, key and lock replacement cover which provides wider protection for your home.

The premium for home insurance can be as low as ₹5 per day. Most people realize the importance of home insurance only after they have suffered uncertain losses but it can be too late. One builds or buys a home which is a permanent asset and can face severe financial losses if not adequately protected. Make your house your home and let insurance shield you against ominous events.

(The writer is Tapan Singhel.) TOP Source

Drone insurance must be on lines of aviation liability - The Hindu – 18th September 2020

A working group of insurance regulator IRDAI has highlighted the need to extend comprehensive insurance coverage for drones.

Such covera ge, addressing the different risk profile, is necessary to ensure public confidence as the market for drones develops, the working group on ‘Remotely Piloted Aircraft System/Drone Technology’ said in its report.

The working group that went into different aspects of drones, across technology, operations, market and international practices, sought to differ with the draft Unmanned Aircraft System (UAS) Rules, 2020, notified by the Civil Aviation Ministry, on the issue of third-party compensation.

Noting that the draft rules suggest that the compensation should be on the lines of the Motor Vehicle Act, the working group said “this is not in line with international practices. Creating a solatium fund, similar to motor vehicles, for hit and fly / hit and crash drones is unthinkable as there is little opportunity for the drone insurance segment to generate such funds.”

Noting that international markets have considered insurance options for drones under aviation lines of business and not in the traditional lines of business, the report said it recommended third-party liability insurance to be in line with aircraft /aviation liability.

The report said drone insurance coverage can broadly be offered across three categories – physical damage/loss to the equipment due to various contingencies; Third Party liability resulting from the usage; and additional coverage such as invasion of privacy and noise liability. On pricing, the working group said it has no intention to suggest a particular price and leaves the determination to each insurer’s appointed actuary. TOP Source

HEALTH INSURANCE

Health insurance norms set to change from October 1. Here's how it will benefit policyholders - Times Now - 25th September 2020

In a bid to remove ambiguities, Irdai has asked insurers to standardize the exclusions — diseases or medical conditions that are not covered under a policy. Any disease or ailment that is diagnosed by a physician 48 months prior to the issuance of the health cover will be classified as pre-existing diseases. Besides, any condition whose symptoms have resulted within three months of the policy issuance will also be classified under pre-existing diseases. Treatment for mental illness, stress will now be covered under health insurance policies.

Amit Chhabra, Head-Health Insurance, Policybazaar.com said: "Coming October, your health

32 insurance policies will receive a much needed to revamp and they will be re-introduced in accordance with the guidelines and specification issued by the Insurance Regulatory and Development Authority of India. The new guidelines were issued to the insurer in a staggered manner in the last one year in order to make the health insurance policies more standardised and customer-centric. The many revisions in the existing laws around health insurance are believed to benefit the customers to a great extent. The revisions are set to make the coverage way more comprehensive and efficient for the policyholders."

Modern treatment to be covered To ensure that the policyholders are not denied the availability of health insurance coverage to Modern Treatment Methods Insurers shall ensure that the following treatment procedures shall not be excluded in the health insurance policy contracts. These Procedures shall be covered (wherever medically indicated) either as an in-patient or as part of domiciliary hospitalization or day-care treatment in a hospital. Uterine Artery Embolization and HIFU, Balloon Sinuplasty, Deep Brain stimulation, Oral chemotherapy, Immunotherapy- Monoclonal Antibody to be given as an injection, Intravitreal injections, Robotic surgeries, Stem cell therapy, etc.

No Rejection of Claim After 8 Years In June last year, IRDAI stated that if a health insurance policy has completed eight years, i.e., the policyholder has been paying a premium for eight years continuously a health insurance claim cannot be rejected except for proven fraud and permanent exclusions. This means a customer’s health insurance claim won’t be rejected from the ninth policy year unless you have indulged in fraud or are making a claim for a permanent exclusion.

"In the month of June last year, IRDAI propped that if a health insurance policy has completed 8 years i.e. the policyholder has been paying a premium for 8 years continuously, under such a scenario, a health insurance claim cannot be rejected except for proven fraud and permanent exclusions," Chhabra added.

Krishnan Ramachandran MD & CEO Max Bupa Health Insurance said: "The inclusion of the moratorium clause in which - health policy of more than 8 years will not be contestable except in case of any fraudulent claim, would make a consumer stay invested for long and take the optimum benefits of the health policy."

New Definition of PED As per the guidelines issued in regard to standardization of health insurance policies, the definition of pre-existing diseases (PED) has to be modified as per the needs of the customer. In accordance with the issued guidelines, any disease/s or ailment/s that is/are diagnosed by a physician 48 months before the issuance of the health cover will be classified under PED.

To ensure that policyholders suffering from pre-existing diseases get adequate health insurance coverage, IRDAI has mandated that insurers include permanent exclusions only after due consent of the customers. It has said: "it is emphasized that these permanent exclusions shall be allowed only in cases where the policyholder may be denied coverage as per the underwriting policy of the Insurer for the existing diseases disclosed at the time of underwriting."

Accrued continuity benefits in waiting periods the latest guideline issued on June 11, 2020, said, "The insured person will get the accrued continuity benefit in respect of the "Waiting Periods", "Specific Waiting Periods" in the event of payment of the premium within the stipulated grace period." So, since health insurance policy premiums can now be paid in monthly, quarterly and half-yearly instalments, there will be specific grace periods for each period mentioned by the insurers. Usually, health policies with annual premium payment mode have a grace period of 30 days, however, policies with monthly premium payment mode might have a different grace period.

How will this impact policyholders? The implementation of the new guidelines from October will bring a positive impact for customers as the standardization of wordings in the terms and conditions, waiting periods, and exclusions will make health insurance simpler, easy to understand, and compare.

Naval Goel, CEO & Founder of PolicyX.comsaid: "Standardization of health insurance is a great move by IRDAI. It will make things easier for customers and will provide clarity on what the health insurance company is covering under the chosen plan. With this in mind, it will be easier for customers to compare and get the most suited plan for themselves. Moreover, with this move, IRDAI wants to bring uniformity and transparency in health insurance."

Further, Ramachandran said: "The health policies that cover consultations through physical visits will need to include consultations over telemedicine as well. Telemedicine has become more prominent in the current times and policies with OPD will be more beneficial."

Also from October, health insurance premiums may increase. Goel said: "Coming to the pricing part, yes it might increase the cost of health insurance product as now the company has to offer a standard product to all."

(The writer is Aparna Deb.) TOP Source There’s No Missing the ‘Middle’ as Insurers Ready Health Cover - The Economic Times – 25th September 2020

The health insurance industry is looking at ways to implement the government’s ambitious ‘Missing Middle’ universal health project that aims to cover more than 600 million uninsured Indians in the middle-income category — either self-employed or in the unorganised sectors. More than 20 non-life insurance companies have expressed interest to the National Health Authority (NHA) and are in advanced stages of submitting their detailed proposals on running the schemes that are being monitored by the NHA and Niti Aayog, according to two officials in the know. The first stage of implementation would involve a pilot in two states, which are yet to be specified. The Missing Middle project was launched in August 2020 by NHA to enhance the scope of existing central government insurance schemes and make them more inclusive. As per some of the specifications provided to insurers, only group, and not individual, medical covers can be sold. Every policy must have its basic terms aligned with the central government’s Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PMJAY).

“These include a minimum sum assured of ₹5 lakh and standard treatment coverage as applicable under the PMJAY scheme,” said a source cited above. “It is yet unclear whether the government would provide subsidised rates for intended beneficiaries.” Additionally, insurers can also use existing state machinery, including the technology platform on which the 23,000-plus hospitals under the Ayushman Bharat scheme are registered. “The idea is to extend the benefit of the existing insurance schemes for the segments of the population that are not covered under any sort of central or state insurance programs or are not benefited by any employer or corporate group covers as well,” said PC Kandpal, CEO of SBI General. According to Sasikumar Adidamu, chief distribution officer – institutional sales Bajaj Allianz GI, the proposed project could be one of the major policy initiatives for enhanced coverage of health insurance in the country. “The scheme will address the beneficiaries employed in the unorganized sectors and MSMEs where the penetration of health covers is rather low,” said Adidamu. “The insurers are currently in the process of submitting proofs of concepts (POC) which would cover several aspects of the project, including the type of groups and the geographies they intend to cover.”

Out-of-pocket expenditure on healthcare in India is rather high. “The healthcare financing and delivery system in the country needs a major overhaul, particularly when it comes to providing access, cost, and quality to the 1.3 billion population of the country,” said Prasun Sikdar, CEO of Manipal Cigna Health Insurance. “The Ayushman Bharat scheme will insure around 45 percent of the poor and the vulnerable. However, this still leaves large middle-income groups bereft of any health insurance coverage.” Ashvin Parekh, a leading insurance industry consultant, said that while schemes such as Ayushman Bharat have been successful in parts, the major challenge has been in the implementation. “Primary caregivers (hospitals) often don't adhere to the terms of the insurance policies, resulting in very high outgo for patients. This is an area that requires to be addressed by the government as well,” Parekh said. India’s health insurance penetration ratio in terms of coverage is less than 1 percent of the country’s GDP.

The writer is Ashwin Manikandan. TOP Source

Be worry-free when making health claims – Live Mint – 24th September 2020

Covid-19 has increased the awareness about the importance of buying health insurance. In August, premium collection by stand-alone insurers went up by 25.85% compared to the same time last year, according to data from the Insurance Regulatory and Development Authority of India (Irdai).

However, the awareness about the details of the policies such as coverage, disclosures, sub-limits, exclusions and so on is still a matter of concern as it directly affects the policyholder at the time of claims. This is reflected in the number of claims reported for covid-19 against the number of claims settled: according to data General Insurance Council shared with Mint, from March last week to 10 September, 130,080 claims were settled against the total claims of 207,291. While some of these claims may still be in process, the gap is quite wide.

“The top reasons for health claims to be rejected are non-submission of complete documents, waiting period, non-declaration of pre-existing conditions, non-coverage under policy terms and conditions and fraudulent papers," said Bhaskar Nerurkar, head, health claims, Bajaj Allianz General Insurance Co. Ltd.

We tell you what to keep in mind to not land yourself in trouble at the time of making a claim.

Disclose all details At the time of purchase, disclosing all information to the best of your knowledge is important. It is best to fill in all the details yourself and not rely on your agent or broker.

Read all the terms and conditions on pre-existing diseases (PED) and waiting period. Concealing details related to pre-existing conditions or family history will only make things difficult for you when a claim arises. Remember that insurers apply a waiting period for some PEDs. Nerurkar said if a claim materializes due to any of the prevailing conditions listed in the terms and conditions of the policy contract, then the claim gets rejected.

“Many times, customers are unaware of this condition or assume that the hospitalization is not linked to the PED or waiting period. This linkage is purely decided by the medical professionals of the insurance company. Sometimes they get in touch with treating doctors to evaluate exact linkages," said Nerurkar. Even if you feel that a particular surgery was minor and happened long ago, being transparent about the status of the PED at the time of policy purchase is crucial.

Look at the clauses The annual MintSecureNow Mediclaim Ratings (MSMR) rates down policies that come with sub-limits. If your policy has sub-limits such as a cap on room rent and if you opt for a room with a higher tariff, the insurer will apply proportionate deduction on other expenses too as, typically, most expenses are related to the room rent. This means you will have to pay the balance.

“To avoid paying inflated bills on medicines and incidentals when staying in a deluxe or premium hospital room, try to get a health insurance policy that has no room rent capping or has a higher ceiling on room rent so that it can cover any room you may have to take," said Indraneel Chatterjee, co-founder and principal officer, Renewbuy.com.

The usual, customary and reasonable (UCR) clause to avoid the abuse of services may also affect claims, said Nerurkar. This clause is used by insurers to restrict the claim amount payable in accordance to what they deem reasonable. A lot of claims are settled only partially due to this clause, said experts.

“While the clause is justified in certain cases, it can be misused to restrict the insurer’s liability. It is tough to fight against it unless the insurer has settled the claim with blatant deduction. Hospital charges in India are not regulated and, hence, insurers, based on their experience, decide on how much is reasonable payment for a procedure at a specific grade of hospital," said Chatterjee.

If you have two indemnity policies and the first insurer deducts a chunk of the claim amount, you have the right to claim the balance under the second policy, but it isn’t easily done. The only way to lower the burden—in case of planned hospitalization—is to get an estimate of expenses from multiple hospitals and choose a reasonable one.

Avoid Hospitalization If your insurer finds that an outpatient claim has been converted into an in-patient claim, there is a possibility of your claim getting rejected. “Sometimes the patient is admitted only to be kept under observation due to the caregiver’s insistence. Such claims are not payable," said Nerurkar.

If hospitalization was indeed required and the claim is still denied, gather all the proof. “Get additional certificates and declarations from your doctor. Show the pre-hospitalisation diagnostic reports. If you can convince the insurer that you were rightfully hospitalized, the claim may get honoured," said Chatterjee.

Ensure that the details shared by you at the time of purchasing the policy match with those filled in the claims form. Attach all relevant documents. “Concealment may lead to repudiation of claim and cancellation of policy contract as well," said Nerurkar. Multiple instances of claim rejection may impact future claims.

If you’ve done all the due diligence and the claim is still rejected, you can ask the insurer to review it. The next recourse is to approach the insurance ombudsman.

(The writer is Disha Sanghvi.) TOP Source

Two years on, Ayushman Bharat has ground to cover on universal health care - The Hindu Business Line - 23rd September 2020

The Centre’s flagship Ayushman Bharat health insurance programme has completed two years. But this time, the buzz around the milestone has been low-key, coming at a time when hospitals are coping with the surge in Covid-19 numbers. Launched on September 23, 2018, in Ranchi, the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana has seen over 1.26 crore hospitalisations, involving a spend of over ₹15,772 crore to cover these healthcare bills. In fact, Health Minister Dr Harsh Vardhan said the two-year milestone is as significant as his involvement with polio eradication efforts in the country. The National Health Authority’s Chief Executive Dr Indu Bhushan said, at an event to herald the two-year milestone, over 23,311 hospitals were on board the scheme covering over 1,500 procedures. The scheme has

36 generated savings to the tune of ₹30,000 crore, he said. But the scheme still has ground to cover in terms of being more universal in its coverage, say public health voices, even as private healthcare representatives seek greater dialogue to “iron out the wrinkles”.

Making a case for universal healthcare, KM Gopakumar with the Third World Network, points out that a bulk of the middle class remains outside the scheme. And the “package system”, where a set number of procedures are covered for reimbursement by the government, leads to further exclusion of ailments and people, he said. The scheme is the first step towards providing universal healthcare, said Dr Sudarshan Ballal, Chairman, Manipal Health Enterprises. “Not just the Western nations, but even countries such as Thailand have a well-developed healthcare system,” said Dr Ballal, who is also a former president of NATHEALTH, a platform for hospitals, diagnostics, insurance providers etc. The last six-odd months have been low-key, he admits, as all efforts have been redirected to tackling Covid. But the effort now should be to dialogue with private providers, address their viability problems and encourage more low-cost or no-frills hospitals, upscaling of teaching hospitals, and even private-private partnerships like the one Manipal Health has with the Tata’s hospital in Jamshedpur for clinical training, he said.

In the early days of the scheme, the pricing of procedures had been a major bone of contention for private healthcare providers, including smaller nursing homes run by medical professionals. In fact, Ballal says, large corporate hospitals are still not entirely participating in the scheme for these reasons. Lauding the concept of wellness centres, he said there should be attention on prevention and greater screening at the primary centres before a patient lands up at a tertiary care hospital. Hospitals will be willing to get more involved if there was a viability-gap funding mechanism to help hospitals support low-cost procedures. Other alternatives that private healthcare providers have been suggesting to the government include a differential pricing of sorts to support cross-subsidisation of those who cannot pay, by those who can. Patient experiences, though, include difficulties in getting covered when there are repeated procedures, for instance, as in a chemotherapy that has multiple cycles; or when they travel to a different State for treatment. Presently, Odisha, West Bengal and Telangana are not part of the scheme. These are some of the ground realities the scheme will have to fix, so it can deliver the benefit it sets out to provide.

9The writer is PT Jyothi Datta.0 TOP Source

4 lakh people availed benefit of health insurance scheme: Sidhu – The Times of India – 23rd September 2020

About 4 lakh people in Punjab have availed free treatment under the scheme Ayushman Bharat- Sarbat Sehat Bima Yojna (AB-SSBY), of which 51 percent are women.

Punjab has empanelled 767 private and government hospitals which provided a free treatment facility of Rs 455.46 crore under the scheme. Punjab health minister Balbir Singh Sidhu said around 46 lakh e-cards have been issued so far. “Till now, more than 6,700 heart surgeries, 1 lakh dialysis, 7,600 newly born babies got treatment facility, 4,000 joint replacements and more than 9,300 cancer patients have got the benefit of treatment under AB-SSBY,” he added.

The health minister disclosed that 44,000 people availed the benefit of the scheme in Bathinda, highest in the state, followed by Ludhiana.

Highlighting the features of AB-SSBY, the minister said under this scheme farmers, small traders, registered construction workers, accredited journalists, smart ration card holders were entitled for health insurance cover of up to 5 lakh per year per family. The Punjab AB-SSBY completed one year of implementation on August 20, 2020. Subsequently, in the second year there has been an increase in the health benefit packages to 1,579, he added. TOP Source

The need for having a comprehensive health insurance plan, in COVID times - The New Indian Express - 22nd September 2020

They say that 'The greatest wealth is health' but the harsh reality today is that it costs a fortune to stay healthy! From consultations & medicines to in-patient accommodations, hospitals don't hesitate to charge a hefty amount.

Unfortunately, it's not possible for an individual to ensure 100% safety against illnesses or injuries but one can surely be prepared the expenses involved through Health Insurance Plans.

What is Health Insurance? Health insurance is a type of insurance that compensates the insured for expenses incurred from treatment of an illness or injury. Insurance companies either compensate the insured individual or pay the care provider directly.

Over 472 million Indians were covered under various health insurance schemes in the fiscal year of 2019.

With the above-mentioned statistics, it's clear that citizens of our country are slowly realising the importance of having health insurance.

Moreover, the current pandemic has practically dominated almost every aspect of our lives. It has caused a stir in our general wellbeing leading us to be prepared for the unexpected. Although the government has taken important measures like increased testing, strict guidelines, and public sanitization, positive cases for COVID-19 are still rising at a record pace.

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.

This brings us to a question which most of us must have asked ourselves "Do current health insurance plans cover treatment for COVID-19?" And the answer is yes!

Max Bupa, India’s leading health insurance provider, has various plans which are carefully designed to cater to individuals and large families, especially in this time of crisis as all their indemnity plans provide cover for Covid-19 treatment. Their diverse services across the health insurance sector have dominated the health insurance market in India for 10+ years now. Therefore, we would suggest considering the following plans to ensure your family’s safety.

One of their most popular platinum plans is - Health Premia. It's a comprehensive health insurance plan that covers the whole family. An important point to note about this plan is that one can enjoy the benefits internationally as well. Max Bupa has tied up with multiple hospitals abroad to make travel hassle-free.

Health Premia provides cover up to Rs 3 crore in medical bills which specifically include emergency coverage across 5000+ hospitals in India and even provide cover for emergency treatment abroad. One of the most attractive features of this plan is that it covers maternity and new-born baby care worldwide!

In India, people fall into different income brackets with various health insurance needs. Max Bupa currently caters to 3 million plus customers because they're able to design and customise insurance plans for all.

One of their most appreciable health insurance plans is the 'ReAssure'. ReAssure is an all-inclusive plan designed to provide health and financial aid for the whole family! This carefully designed plan comes with key features like: Coverage up to ₹ 1 crore Unlimited reinstatement benefits for the base sum insured Inpatient care including hospitalization charges, doctor's fees, investigative tests. PPE kits etc. Modern technology coverage such as Oral Chemotherapy, Deep Brain Stimulation, Stem Cell Therapy, Robotic surgeries etc. Living Organ Donor Treatment coverage including transplant charges, Organ Donor care etc. Alternative treatment coverage such as Ayurveda, Unani, Siddhi and Homeopathy.

Additionally, Pre & Post hospitalization charges are covered for the sum insured and day care treatments for procedures like dialysis, angiography, radiotherapy and more.

The most significant featur of the 'ReAssure' plan and Health Premia is that it provides full Covid-19 coverage. Keeping the urgency in mind, Max Bupa has reduced the initial waiting period to just 15 days. The thought of stepping in a hospital brings a great deal of anxiety and panic among patients and attenders. Further, the exorbitant charges add more to the sensitive situation, affecting our mental health in the process.

ReAssure is a standalone health insurance plan that ensures care in and out of the hospital. With several merits and discounts in each health insurance plan, one can be prepared for any circumstances.

We cannot predict health emergencies, but being prepared definitely benefits in the long run! Getting the whole family's health insured is a huge step towards collective welfare. TOP Source

Covid bonanza for health insurers, 25% growth recorded - The Economic Times - 22nd September 2020

The Covid-19 pandemic has increased the propensity of consumers to opt for a comprehensive health insurance product that gives proper financial protection for meeting any medical emergencies.

Accordingly, overall growth in the health business of general insurers was strong at 25 per cent yoy in August (13 per cent yoy in 5MFY21) with strong performance reported in retail health and government business at 40 per cent yoy each, according to analysis report by Kotak Institutional Equities.

"Increasing risk aversion among consumers, strong uptick in demand for new Covid-related

39 policies ('Corona Kavacha' and 'Corona Rakshak') and penetration among mass segments through the newly launched 'Arogya Sanjeevni' plans were likely drivers," the report said.

In the health insurance category, people preferred taking policies from entities having expertise in this line of operation. Accordingly, standalone health insurers reported 39 per cent yoy increase in health premiums led by 51 per cent yoy increase in the retail health business. Private players were up 16 per cent yoy in the health business (up 40 per cent in retail health) while PSUs were up 21 per cent yoy.

Investment by health insurers in digital renewal of policies has likely paid off. Private players witnessed 40 per cent yoy increase in retail health insurance premiums on the back of 1.1X yoy growth for Reliance General, 66 per cent yoy growth for Tata AIG and 65 per cent yoy growth for Iffco Tokio. Chola MS, ICICI Lombard and Bajaj General reported 62 per cent yoy, 28 per cent yoy and 35 per cent yoy growth, respectively, the brokerage report said.

On an overall basis, General insurers reported 10 per cent yoy growth in premiums (excluding crop) in August 2020 (7-8 per cent in past two months) led by 29 per cent yoy growth in fire and robust 40 per cent yoy growth in retail health. Motor continues to drag growth (down 2 per cent yoy). TOP Source

Getting a fresh health insurance cover? Do this instead - The Financial Express – 22nd September 2020

With the necessity of being hospitalized especially due to COVID-19, and with a steep rise in medical costs, people have started taking health insurance seriously. According to industry data, most people are seen dependent on their employer’s health insurance policy only. What these employees don’t consider is that corporate medical insurance policies mostly do not cover the entire expense/ hospitalization bill.

Depending only on an employer’s policy will leave you partially covered. Experts say it is often seen due to the low sum assured of health plans, policyholders fail to meet the medical expenses during a crisis. Note that, major accidents or diseases are not covered by corporate medical insurances, or at least not the entire bill.

Hence, experts suggest one should get additional coverage on one’s own, apart from the one provided by the employer. Having said that, instead of opting for a basic health plan, in addition, you can alternatively opt for a top-up or a super top-up plan, depending on your requirements. When compared to basic health plans, top-up or super top-up plans are more cost-effective options. These top-up plans can be availed for both individual and family floaters.

These top-up and super top-up plans work as supplementary health plans, especially for policyholders that only hold an employer’s health plan as well as for policyholders that have a low sum insured in their basic health plan. According to experts, for policyholders with a lower sum insured, enhancing the basic policy could be an expensive approach as compared to buying a top-up plan.

Additionally, basic health insurance policies include limitations such as exclusions of a certain disease, co-payments with high percentage, corporate health covers (come with various restrictions), along with that the coverage also varies from year to year. Top-up plans come with higher deductibility, because of which the premiums are also low than the basic health covers.

Basic Health Cover and Top-Up: Combining the two Experts say the ideal way to be fully insured and to avoid the rising healthcare costs and paying from your own pocket is to opt for a basic health insurance plan and combining it with a top-up. You can also combine the top up with your corporate cover. Having a cover this way ensures that once you have exhausted the sum insured of your basic health cover/corporate cover, the top-up cover can come into play.

While opting for a top-up cover, you need to choose a deductible for it, an amount that you will have to pay either using your basic health policy or corporate policy or from your own pocket before the top-up cover activates. The bill that goes above the deductible limit is paid through the top-up plan.

In contrast to a top-up plan, a super top-up plan offers a better deal. For instance, a top-up plan only gets activated in case a single claim is made and the amount exceeds the deductible amount. However, a super top-up plan does not require a single claim amount to exceed the deductible amount, it accepts two or more separate bills as one expense and pays for the claim.

For example, if you have a top-up cover with a deductible of Rs 1 lakh, meaning any expenses above Rs 1 lakh will be borne by the top-up cover, and in a year you get two hospitalization bills of Rs 60,000 and Rs 90,000 – your top-up plan will not get activated. It needs a combined bill of Rs 1.5 lakh to reimburse the Rs 50,000. However, with a super top-up plan, even if you produce three separate hospitalization bills of Rs 50,000, Rs 60,000, and Rs 40,000, a total of Rs 1.5 lakh in a year, you will get the reimbursement of Rs 50,000.

(The writer is Priyadarshini Maji.) TOP Source

Health Insurance: Mediclaim policies set to be less opaque now - The Financial Express – 22nd September 2020

From October 1, all new indemnity-based health insurance policies will have standardised clauses. For existing policies, the same will come into effect from April 1, 2021 at the time of renewal of the respective policy. The insurance regulator’s circular underlines that the objective is to simplify the wordings of general terms and clauses of the policy contracts and ensure uniformity across the industry.

The premium can be paid in instalments —half yearly, quarterly or monthly. Insurers cannot deny renewal of a policy on the ground that the insured person had made a claim or claims in the preceding policy years. The insurer will inform the policyholder about renewal and collect the premium before the end of the policy period.

New guidelines If the policyholder misrepresents or does not disclose any material fact, then the policy will be void and all premium paid will be forfeited to the company. After completion of eight continuous years, health insurance claims will not be contestable except for proven fraud and permanent exclusions specified in the policy contract. However, the policies would be subject to all limits, sub limits, co-payments, deductibles as per the policy contract.

Prasun Sikdar, MD & CEO, ManipalCigna Health Insurance Company, says the measures taken by the regulator are in the interest of the policyholders. “The standardisation of exclusions will help customers

41 to understand and compare policies, leading to an informed decision. Also, instalment of premiums will ease the mode of payments for customers, the crystal clear exclusions will ensure there is less ambiguity with respect to policy wording,” he says.

Similarly, Krishnan Ramachandran, MD and CEO, Max Bupa Health Insurance, says the implementation of the new guidelines from October will have a positive impact as the standardisation of wordings in the terms and conditions, waiting periods and exclusions will make it easy to understand and compare health insurance policies. “As each policy will have the same wordings for exclusions, and general terms and conditions, it will remove the ambiguity across products and bring more transparency. The inclusion of the moratorium clause in which health policy of more than eight years will not be contestable except in case of any fraudulent claim, would make consumers stay invested for long and take the optimum benefits of the health policy,” he says.

Claim settlement The insurer will have to settle or reject a claim within 30 days from the date of receipt of last necessary document. In case of delay in payment of a claim, the insurer will be liable to pay interest to the policyholder from the date of receipt of the last necessary document to the date of payment of claim at a rate 2% above the bank rate. If the claim warrants an investigation, then the company will initiate and complete it within 30 days from the date of receipt of the last necessary document. If one has multiple policies, then the insurer chosen by him will have to settle the claim as within the terms of the chosen policy. If the amount to be claimed exceeds the sum insured under a single policy, then the policyholder can claim the balance amount from the other insurer.

Uniformity in exclusion The guidelines bring more uniformity in the list of excluded diseases as health conditions such as age- related macular degeneration, mental illnesses, enteral feedings, internal congenital, genetic diseases will now be covered. “The modern way of treatment will be covered across all health insurance plans which will eventually help consumers to access quality and effective methods of treatment. The health policies that cover consultations through physical visits will need to include consultations over telemedicine as well. Telemedicine has become more prominent in the current times and policies with OPD will be more beneficial,” says Ramachandran.

Proportionate deductions The regulator has mandated that insurers cannot recover any expenses such as pharmacy and consumables, implants and medical devices and diagnostics towards proportionate deductions other than the defined ‘associate medical expenses’ while processing claims. Proportionate deduction takes place when a policyholder opts for a room where the tariff is more than the tariff capped by the insurer.

The regulator has directed insurers to ensure that proportionate deductions are not applied in hospitals which do not follow differential billing or for those expenses in which differential billing is not adopted based on the room category. Insurers are not permitted to apply proportionate deduction for ICU charges as the regulator has underlined that different categories of ICU are not there.

(The writer is Saikat Neogi.) TOP Source

Company health insurance might not be sufficient for you and your family—here’s why - Hindustan Times - 21st September 2020

When Aravind’s mother returned from the hospital after undergoing treatment for 10 days at a private hospital for the novel coronavirus, the relief that washed through him evaporated soon when he came to know about the hospital bill. Aravind, who had been working as a senior manager at a top-notch MNC, had harboured the notion that the company’s health insurance policy, which provided coverage for him and his widowed mother, would be enough to keep them from going bankrupt in the event of a medical emergency.

In reality, Aravind ended up paying a substantial amount from his own pocket. The insurance policy provided by his company was only worth Rs 5 lakh and the total amount came out to be much more than that. He realized that it had been a mistake to rely solely on the corporate health plan and that he should have opted for a separate health insurance plan with sufficient coverage as well.

Insurance penetration remains abysmally low in India. In the fiscal year 2018, the insurance penetration in India was 3.7 percent of the gross domestic product (GDP), as against the global average of 6.31 percent. Most people underestimate the importance of insurance and tend to relegate including it in their financial plans until they reach an age where visits to the hospital become more frequent. This also explains why health coverage provided by employers is deemed as adequate by many employees, who do not consider seeking additional health coverage.

Although there are undeniable advantages of the medical insurance provided by your company for you and your immediate dependants, it may offer limited coverage. Here is why you should consider getting independent health insurance coverage, besides the corporate health plan.

Insufficient coverage People are living longer and the relentless rise in medical inflation coupled with the burden created on the healthcare infrastructure by the pandemic has given rise to a situation where one medical emergency can become a major financial setback. This has amplified the need for high health insurance coverage and, sadly, most corporate insurance plans do not provide that. Insurance provided by group policies are generally worth Rs 10 lakh or less, which isn’t much for a family. The number of dependents may also be limited, which means your entire family may not have any insurance cover at all.

Restrictive clauses Many corporate health plans have the room-rent capping and the co-payment clauses, both of which can cause you to shell out money from your bank account for medical care facilities. Under the co-payment clause, a fixed percentage of the medical bill needs to be paid by the policyholder and the insurer is only liable to pay a fixed percentage. The room rent-capping means the insurer will only pay up to a certain amount towards room rent in a hospital and should you choose a higher tariff room, you will have to bear the differences in the cost. By opting for a regular policy you can choose one that has a minimum or no co-payment clause and provides higher coverage for hospital room tariffs. Sub-limits on hospitalization, diagnostic tests, and ambulance charges are also common in group policies.

Lack of flexibility The fact that your entire family may not be covered by corporate policies is an indication that ultimately, it is the employers who negotiate all the aspects of group policies including diseases covered, critical illnesses, inclusion of dependents and the sum insured with the insurer. Should you or any other member of the family have a history of any critical illnesses, there is little chance that the corporate policies will have you covered.

Besides the policy clauses, it is important to remember that the power rests with your employer when it comes to providing continued health insurance coverage. If your employer defaults on the premium payments or terminates the contract, you will be no left with no insurance coverage.

Job changes A group health policy is one of the many benefits that you get by virtue of your association with your employer. If you switch jobs or if the employer decides to shut shop or terminate your services, you can no longer reap any benefits from the group policy. Even if your new employer provides health insurance,

43 you may have nothing to fall back on in the absence of a regular policy in case of a medical emergency. You never know when you would need the protection offered by a health insurance policy and having an additional cover is a wise decision for these gap periods.

Perks of a regular health policy While there’s no reason not to reap benefits of any free or inexpensive insurance provided by your employer, thinking of it as a complete solution for your healthcare needs may not be a wise decision. The biggest advantage of having a regular health insurance policy is that you get to choose based on your and the needs of your loved ones – you can ensure the coverage is sufficient, the clauses are appropriate, you can avail tax benefits and, most importantly, you can revise it from time to time. After all, you would know best about your health and that of your loved ones and not your employer. So, go ahead and buy health insurance online to safeguard your finances during emergencies.

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Insurance: How to get adequate health cover at a nominal cost - The Financial Express – 21st September 2020

As Covid-19 cases rise in India, treatment costs in a good hospital would require Rs 4-5 lakh. If more than one family member gets hospitalised, it may become a precarious situation if you have a policy of Rs 4-5 lakh. So, how can you ensure adequate health insurance at a nominal cost?

Base health insurance plans The base health insurance plan covers hospitalisation expenses including pre and post-hospitalisation expenses such as cost of medicines, doctor fees, diagnostic tests etc. Regular health insurance plans come in two basic variants: Individual plans and family floaters.

The family floater plan brings the entire family under one umbrella cover. This plan should be good enough to cover normal hospitalisation in a good hospital. We suggest a minimum of Rs 10 lakh base hospitalisation cover, given the high treatment cost in good hospitals. However, in case of multiple hospitalisations in the same family or long-term hospitalisations, a higher sum insured will be required.

The cost-effective way to increase the health cover would be a super top-up plan. However, take note of deductibles in a super top-up plan, which is the level beyond which the super top-up can be utilised for paying the expenses. The deductible is a cost-sharing requirement under a health insurance policy. A super top-up plan is best utilised when your deductible amount is equivalent to your base health cover.

Also, in most super top-up policies, there is no requirement of medical check-ups up to the age of 55 years. In regular health plans, this is usually 45 years. One may not be able to buy a sizable base health plan for Rs 30-40 lakh given the high premium but can look at a combination of Rs 10 lakh of base cover along with Rs 30 lakh super top-up which comes at a very meagre premium.

Critical illness insurance plan The critical illness insurance plan provides coverage for life-threatening/ chronic illnesses that require treatment over a long period of time. A critical illness plan covers a specific number of listed critical illnesses with claim disbursement in the form of lump sum to a policyholder at the time of diagnosis provided he survives for a certain period depending on the plan.

In case of critical illness, generally people end up staying at home translating to “loss of income”. Since the policy pays a lump sum on diagnosis, the money can be invested to ensure reasonable monthly returns to meet daily expenses.

There are long-term expenses associated with a critical illness in the form of medicines for 9-10 months, periodical doctor visits and medical tests. It is useful in covering long-term expenses that can’t be covered in the base health plan beyond the post-hospitalisation period. These plans are extremely low cost. Critical illness plans for people up to 40 years should cost about Rs 5,000 for a Rs 10-lakh plan.

A combination of base health insurance plan along with super top-up and critical-illness would ensure a sizable health cover at a very nominal cost. It would take care of cost on account of long-term hospitalisations due to severe illnesses and long-term expenses associated with it.

(The writer is Sanjiv Bajaj.) TOP Source

Now policyholders can get reward points, wellness coupons for staying fit - Times Now - 20th September 2020

As medical costs are ever-increasing, it is important to have health insurance. Also, preventive healthcare is equally important. Modern-day health insurance plans have evolved from covering only the medical expenses incurred on hospitalisation to include a range of value-added benefits for policyholders.

Preventive and wellness related coverage benefits were offered in few health plans but now the Insurance Regulatory and Development Authority of India (IRDAI) has issued guidelines in this regard.

In its latest guidelines, IRDAI stated that insurers can offer discount coupons and vouchers for health supplements and yoga centers, and also reward points to policyholders complying with the specified criteria.

Amit Chhabra, Head-Health Insurance, Policybazaar.com said: "Wellness is critical to keeping good health, and these guidelines are an endeavour in the right direction. It has become important to prioritize health & include preventive healthcare measures in one’s daily life. With this move, we believe that health insurance will no longer be perceived just as a measure to secure oneself against unforeseen illnesses; rather it will become a part of a customer's daily health needs. "

In a circular, the Insurance Regulatory and Development Authority of India (Irdai) said: "Any wellness and preventive feature shall be designed only with the objective of maintaining and improving good health, thereby enabling affordable health insurance."

Wellness and preventive features under a policy can be offered either as optional or add-on cover, it said, but clarified that nothing should "be offered without it being filed or incorporated as part of the product in terms of the Product Filing Guidelines," the IRDAI stated.

The regulator asked the insurers to assess the pricing impact of wellness and preventive features and disclose them upfront in the ''file and use'' application as per the Product Filing Guidelines.

Naval Goel, CEO & Founder of PolicyX.com said: "The aim of new guidelines by IRDAI is to formalise the wellness benefits as part of the product. This move is going to prevent the mis-spelling and misuse of

45 wellness benefits. It requires insurers to file wellness benefits along with the product. It ensures that the ambiguous wellness benefits are properly defined."

Rewards Till now, some health plans offered discounts on premiums based on the number of steps you took in a policy year or if your annual medical check-up report was found favourable. Many plans also offered wellness-related discounts for promoting healthy living. However, the benefits were restricted to a handful of insurance companies only.

With these guidelines, which came into effect immediately, all health insurance companies are being asked to include wellness benefits as a part of their product.

Bhabatosh Mishra, Director Underwriting, Products & Claims at Max Bupa Health Insurance said: "We expect the industry to shift towards products that take care of customers in ‘illness and wellness’ and with the new guidelines in place, wellness will soon become a core benefit of health insurance, rather than just a value add. We at Max Bupa, have been offering wellness linked product Go Active since 2018 and have recently launched ReAssure which comes with Live Healthy benefit which can offer up to 30% reduction in premiums depending on number of steps taken by a policyholder. Our clear intent has been to incentivise customers and pass on the financial benefits for keeping healthy.”

Insurers have also been allowed to offer discounts on premiums and an increase in sum insured at the time of renewals based on wellness regime followed by policyholders in the preceding policy period.

As per the guidelines, the insurers will be prohibited from publishing the trade names or trade logos of third party merchandise in any of the insurance advertisements but may refer to the services in generic terms. Insurers, however, will be allowed to disclose the specific items of services on their website with necessary details and may provide a link in their insurance advertisement and policy contracts.

(The writer is Aparna Deb.)

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Time to go beyond COVID-19 health cover – The Hindu – 20th September 2020

COVID-19 has spread to more than 213 countries, infecting over 30 million people in different parts of the world. The U.S. remains the worst-hit country by the pandemic with cases soaring up to 6.8 million and fatalities at 2.05 lakh followed by India with 5.2 million cases and 85,000 people who have lost their lives.

As per the World Health Organisation’s latest epidemiological update, the novel coronavirus continues to spread.

The pandemic has changed the health insurance landscape in the country completely in numerous ways. People have now started to take health insurance more seriously; insurers believe that the new trends that have surfaced in the last couple of months will continue in the post-COVID-19 era as well.

Now, there’s an urgency driven by the fear of contracting the virus. Numbers from the industry tell us that most general and specialised health insurers have witnessed an increase in demand for health insurance policies by almost 40% between April and August, from a year earlier.

The growth is quite enough to prove that India has successfully set a brilliant example of showcasing that having an insurance policy as a fixed part of financial planning is of utmost importance.

However, what we must not forget is while COVID-19 may be the latest nail in the coffin, it is certainly not the last. The pandemic is not the only thing eroding health and livelihood.

The numbers While COVID-19 continues to take centre stage, all other severe ailments and conditions have been sidelined, causing immeasurable suffering.

No doubt, COVID-19 is a highly infectious disease but its mortality rate is quite low compared with other pandemics in the past, including ebola, smallpox and SARS. Till the time of writing this article — in a span of almost six months — COVID-19 has claimed about 85,000 lives in India, which has a population of almost 1.4 billion, with a mortality rate of less than 2%.

Also, of the total number of health insurance claims recorded from April till August, COVID-19-related claims account for merely 11% — as per data from Policybazaar.com, which accounts for about 10% of India’s retail health insurance market. On the other hand, some major lifestyle diseases and conditions account for many more deaths per year.

Each year, in India, more than 7.8 lakh people die due to different types of cancer, almost 3.7 lakh lives are lost following cardiovascular ailments, and three lakh and two lakh people die due to gastroenteritis and kidney diseases, respectively. Yet, questions around COVID-19 coverage remain among the most frequently asked, by customers in a country where health insurance penetration is a measly 4%.

Now let’s compare cost of treatment for various conditions. For a COVID-19 infection, on average, the cost of treatment without ventilators or other life-saving equipment is about ₹10,000 — ₹15,000 daily.

That makes for ₹1.5—₹2 lakh for 14 days in urban areas and ₹75,000—₹1 lakh in semi-urban and rural areas. However, the cost of treatment of cancer often crosses ₹20 lakh, including surgery and chemo sessions.

For treating kidney-related ailments, the cost is about ₹5—₹7 lakh, while for cardiovascular ailments one has to spend about ₹4 — ₹7 lakh.

Comprehensive plan Hence, we can easily conclude that COVID-19 accounts for a very small fraction of deaths in our country. Also, the cost of treatment is lower than for other ailments. Yet, consumers are giving COVID-19 a disproportionate amount of importance when buying a health insurance policy. It is observed that most consumers are buying policies specific to the treatment of COVID-19 and not other ailments. However, this approach may turn out to be costly. While COVID-19 may get over as soon as a vaccine is launched, lifestyle-related ailments and other serious conditions requiring hospitalisation are here to stay.

While buying health cover, you must consider the significant mortality and treatment cost of all major illnesses. In such a scenario, insurance is no longer a luxury that can be overlooked. Health insurance, has become a necessity and must hold its ground even in a conservative and minimalistic savings and investment plan.

It is important to stay financially protected against a pandemic and other ailments that may strike at any age. In situations like these, the only way to stay financially protected is by buying a comprehensive health insurance policy. If one gets hospitalised for treating COVID-19 infection, the overall health insurance plan will help cover medical expenses for this condition as well.

Buying health insurance not just for yourself but for your entire family is important to make sure your hospital admission and treatment expenses are covered seamlessly.

(The writer is Amit Chhabra.) TOP

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IRDAI wellness guidelines simplified: Get reward in insurance plan for maintaining good health - The Financial Express - 19th September 2020

IRDAI wellness guidelines: Modern-day health insurance plans have evolved from covering only the medical expenses incurred on hospitalisation to include a range of value-added benefits for policyholders. New-age health insurance plans offer the benefits of the sum insured restoration, international coverage, air ambulance coverage, coverage against robotic surgeries and much more making them suitable for modern age coverage needs. Moreover, to stay in the competition, some insurers also offer wellness and preventive health benefits to policyholders to promote healthy living.

Preventive and wellness related coverage benefits were offered in few health plans but now the Insurance Regulatory and Development Authority of India (IRDAI) has issued guidelines in this respect. According to the IRDAI guidelines, health insurers are being motivated to offer wellness and preventive healthcare facilities to customers as a part of their insurance plans.

What are the benefits being pushed? The IRDAI has asked the insurance companies to offer the following services to their policyholders –

Preventive healthcare coverage Under this category, health insurers have been asked to offer coverage for outpatient consultations, cost of pharmaceuticals, health check-ups, diagnostic tests as well as outpatient treatments. This coverage can be offered at networked hospitals or other hospitals empanelled with insurance companies.

Health insurers can either cover these preventive healthcare costs or they can offer discounts on these costs if such costs are incurred at specified hospitals.

Wellness related benefits Insurance companies can offer redeemable vouchers to their customers. These vouchers can be redeemed to buy health supplements or to avail a membership at sports clubs, yoga centres, gymnasiums or fitness centres.

Insurers can also provide policyholders with a discount in their renewal premiums or an increase in the sum insured on renewal if the insured follows a wellness regime during the policy tenure.

Coverage for non-payable hospitalisation costs In the case of inpatient hospitalisation, some medical costs were not paid by health insurance policies. The IRDAI has asked insurance companies to offer coverage for such non-payable costs to policyholders as a part of their wellness programs.

The fine print Though the IRDAI has recommended these wellness measures to be adopted by insurance companies, here’s what the fine print reads – The wellness benefits offered by insurance companies should be with the objective of promoting healthy living among policyholders These benefits would be offered to policyholders who meet the specified wellness-related eligibility criteria set by insurance companies These wellness related benefits can be offered as an inbuilt plan benefit or as an optional add-on Customers can be given the choice to choose from the wellness benefit that they need The list of service providers proving wellness related benefits to policyholders should be clearly stated in the insurance company’s website

For family floater plans, it should be clearly stated if the wellness benefits would apply to all members or not The terms regarding carrying forward of wellness benefits to the next policy year, if not used in the current year, should be clearly stated

What’s in it for you? Till now, some health plans offered discounts on premiums based on the number of steps you took in a policy year or if your annual medical check-up report was found favourable. Many plans also offered wellness-related discounts for promoting healthy living. However, the benefits were restricted to a handful of insurance companies only.

With these guidelines, which came into effect immediately, all health insurance companies are being asked to include wellness benefits as a part of their product. This has been done to – Make policyholder conscious about their health Motivate the insured members to maintain a healthy lifestyle Reward policyholders for their efforts in maintaining a good health Make health plans more wellness-oriented

Overall, this welcome move by the IRDAI would make India healthier and reduce the burden of diseases on Indians. Today, like ‘organic’, ‘vegan’, ‘Zumba’, ‘Pilates’, ‘Yoga’, etc. have become common in an average millennial’s vocabulary, this move would make health plans more in sync with the current trend of healthy living. With these changes the health plans would become more inclusive which would offer you, the policyholder, increased coverage benefits and the motivation to practice healthy living.

(The writer is Dhirendra Mahyavanshi.)

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Health insurance premiums set to increase from next month. Key things to know – Live Mint – 19th September 2020

Starting from October, your health insurance premiums are set to increase. To make health insurance products more 'customer-centric', the Insurance Regulatory and Development Authority of India (Irdai) has introduced a host of changes in last one year. The insurance regulator made it mandatory for the insurance companies to follow the guidelines and implement the changes in products with effect from October.

To remove ambiguities, Irdai asked the insurer to standardize the exclusions — diseases or medical conditions that are not covered under a policy. Any disease or ailment that is diagnosed by a physician 48 months prior to the issuance of the health cover will be classified as pre-existing diseases. Besides, any condition whose symptoms have resulted within three months of the policy issuance will also be classified under pre-existing diseases. Treatment for mental illness, stress will now be covered under health insurance policies.

"Insurers are using this time to revamp their offerings by adding new features and standardizing products, according to IRDAI’s guidelines. They will launch the revamped products with a higher price. The rise in premiums could be in the range of 5-20%," said Nirmal Bhattacharya - chief underwriter, Universal Sompo General Insurance Company.

"Removal of ambiguity in exclusions and inclusion of modern treatments methods such as oral chemotherapy, balloon sinuplasty, deep brain stimulation will widen the scope of health insurance. Treatment for mental illness, stress or psychological and neurodegenerative disorders have also been brought under the purview of health insurance. This inclusion would have pricing impact on the basis of the increment in the procedure expenses," he further added.

The standardization of health insurance product aims to help the customer, Bhattacharya believes. These standardised clauses should be incorporated in the new policies filed by insurers on or after October 1, 2020, and for existing products which are due for renewal from April 1, 2021.

How is standardization of insurance products going to benefit the policyholders? He answered, "Due to availability of multiple health insurance products in Indian insurance market, people are often confused which one to take because they don’t have time or energy to go through bulky policy documents. Standardization of health insurance will help to know about product and claim settlement process merely through word of mouth."

On whether you should pay some extra cash on health insurance, Bhattacharya said, "You must know that by paying extra premium, health insurance products will become more inclusive, less complicated and more attractive for customers."

Apart from the standardization of products, Irdai asked the insurance companies to ensure coverage for telemedicine. In the wake of coronavirus outbreak, telemedicine service is gaining popularity. The regulator also advised insurers to provide more rational and customer-friendly claim deductions to policyholders.

(The writer is Anulekha Ray.) TOP Source

Important things to look at while buying health insurance for your parents – The Financial Express - 18th September 2020

It is imperative for us to get covered by health insurance, especially during this time. More importantly, if your elderly parents are not covered under a policy, it is time to get them insured.

Rakesh Goyal, Director of Probus Insurance, says, “Having a health cover ensures that your parents get the finest treatment during medical emergencies without the need of financial worries. Considering the age factor, your parents are more vulnerable to various health issues or illnesses, and getting a high insured plan for them can make the treatment process relaxing without any financial constraints.”

Most salaried people usually depend on their employer-provided health plans, and do not get an additional health plan. Hence, after retirement, these people are left without a separate health cover. But it is important for the retired and the senior citizens to get covered by a policy, especially because they are the ones with high chances of getting a host of health problems. Additionally, with the steep rise in healthcare costs, without a health insurance policy, it could leave a hole in your pocket.

While buying a policy, note that if your parents have any kind of pre-existing diseases, then those diseases would also be covered after a specific period (waiting period). This would help you to save on the heavy expenses on the treatment of these pre-existing diseases, post the waiting period. The waiting

50 period varies from insurer to insurer. Also, there are certain health insurance plans that not just cover the hospitalization charges but also cover various other expenses such as medicines, tests, periodic health check-ups, ambulance costs, day-care surgeries, etc. This coverage definitely adds some ease to your pocket. You also enjoy tax benefits wherein the health insurance premium that you pay for your parents is qualified for deduction under Section 80D.

Things to consider while buying a policy Factors that one must consider while looking for a health insurance policy is selecting the right insurance amount, checking the network hospitals, seeing if the coverage is adequate as per the age of the family members, understanding the waiting period (if any).

Goyal adds, “One must also research on the claim settlement history of the insurer (from where the policy is to be purchased). Also, check if the plan comes with other additional factors such as maternity benefits, free medical check-ups, No Claim Bonus (NCB), co-payment option, etc.”

Points to consider while choosing the right policy: Health history of your parents – For senior citizens, it is suggested to disclose all previous health- related diseases along with any ongoing health issue, symptoms, and diseases that are not formally diagnosed. Also, before looking into insurance policies it is better to have an idea of the medical state of your parent’s so that you can get the policy that provides relevant coverage. Additionally, try to keep your parent’s health history handy, so that when a claim arises, you are able to produce it.

Sum insured – The sum insured of a policy should be decided after considering factors such as medical inflation and the health of the parents. It is better to take time and decide the policy sum insured as once the policy is issued and comes into effect, it gets difficult to increase the sum insured. Hence, experts say the sum insured should be chosen assuming an inflation rate of 7 to 10 per cent annually.

Parameters of a policy – Evaluate policies based on a few parameters, such as co-pay, room rent limits, treatment limits, surgery, etc. There are plans which will have a lower premium but based on the aforementioned parameters you should choose your policy. Usually, most policies with a low premium have various restrictions that limit the usage of the policy significantly. Hence, it is better to read the terms and conditions of the policy wordings carefully to understand the applicable limitations of the policy.

Disclosures – Give all correct information while filling up the proposal form for an insurance policy. You need to give your parents personal details while filling up the proposal form such as their health status and history. Then once the insurer analyses the application, you could also get a call to explain more about your parent’s health conditions. Insurer generally asks such policyholders to undergo a medical check-up, depending on which the insurer can either issue a policy, increase the premium, or, can also decline the application. Also, not disclosing all health conditions could lead to claim rejection during a crucial time.

(The writer is Priyadarshini Maji.)

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Super top-up health insurance plan vs top-up plan: What policyholders should know - The Economic Times - 18th September 2020

If you have a health insurance policy with a comparatively low sum assured, you can consider buying a top-up insurance plan. A top up plan increases the insurance coverage over and above your existing base policy at a comparatively lower cost as compared to increasing the sum assured in the base policy.

The top-up plan will come to your rescue in case your medical insurance claim crosses a threshold limit (also known as a deductible). What this means is that the top up plan becomes active only when the claim amount is higher than the top-up deductible.

Under a top-up plan, a deductible is the limit up to which the healthcare costs are borne by the insured or the policyholder depending upon the type of insurance policy.

Types of top-up plans "There are two types of top-up plans. One where deductible is applied on each medical insurance claim separately. The second type, known as a super top-up plan, is where the deductible is applied on the total admissible claims in one year. People should be careful with what they are buying - per claim deductible or annual total based deductible," Biresh Giri, Appointed Actuary, Head of Product Development & CRO, Acko General Insurance said.

Regular top-up plan: This type of plan offers additional coverage beyond the deductible/threshold limit. The deductible in a top up plan is often/usually kept equal to the existing health insurance policy. In such top-up plans, the deductible is applied on single hospitalisation or per claim basis in a year, that is, a top- up plan covers only a single claim above the deductible. So, if your first, second or any subsequent hospitalisation bills do not exceed the deductible, the top-up plan will not help you get the claim settled for those medical expenses.

When you claim from a base health policy and a basic/regular top-up plan Here, your insurer generally links the top-up plan deductible with your base health policy (as per the policy terms and conditions).

For instance, if you bought a top-up plan with a maximum sum insured of Rs 10 lakh which has a deductible of Rs 5 lakh, and you also have a base health policy of Rs 5 lakh. You were then hospitalised for which the medical bill came up to Rs 5 lakh. Out of Rs 5 lakh, the insurer only settled a claim of Rs 3.5 lakh from the base health policy (assuming that the insurer did not pay for proportionate deduction, co- pay, sub limits and other non-medical expenses amount)." Giri explains, in such a situation, consider the following scenarios:

"First, you cannot use your top-up plan to settle the balance amount of your medical bills, as the claim amount is less than the top-up deductible. Now, if a second claim of Rs 4 lakh is triggered in the same year, it will again not pe paid under the top-up policy since the sum insured under the base health policy is not exhausted. This way if a second claim arises, it will have to be lodged under the base health policy first," Giri said. Moreover, since again the second claim amount is less than the top-up deductible, the balance amount will not be paid under the top-up plan.

Super-top up plan: A super top-up plan covers the total of all hospitalisation bills (up to the super top- up plan limit) above the deductible amount, that is, the deductible is applied to the total claims in one year. Hence, once the deductible is paid, the plan becomes active for subsequent claims.

How super top-up plan works When you claim from a base health policy and super top-up plan As mentioned above, the super top-up plan comes with a certain deductible. The insured/policyholder has to choose the deductible limit above which the super top-up plan would become active (as per the policy terms and conditions).

Let us say you bought a super top-up plan with a maximum sum insured of Rs 10 lakh which has a deductible of Rs 5 lakh, and you also have a base health policy of Rs 5 lakh. You were then hospitalised for which the medical bill came up to Rs 5 lakh. Out of Rs 5 lakh, the insurer only settled a claim of Rs 3.5 lakh from the base health policy (assuming that the insurer did not pay for proportionate deduction, co- pay, sub limits and other non-medical expenses amount). In such a situation, you cannot use your super top-up plan for the first claim as the medical bill did not exceed the deductible. However, you can use the super top-up plan for subsequent claims.

"If you have a super top-up plan, it will provide coverage for subsequent claims, as total Rs 5 lakh of medical expenses have been incurred by the insured. It doesn't matter who paid for these expenses (base health policy or the patient)," said Chandan D. S. Dang, Executive Director, SecureNow.in, a Delhi-based

52 online insurance broking firm. Besides, the standard inclusions and exclusions will also apply on the respective claim amounts as per specific policy terms.

Now, what if you want to make a second claim? For the second claim, or any subsequent claims during the same year, the policyholder can use either of the policies (base or super top-up) to settle the claims. The base policy amount of Rs 1.5 lakh will still be available, and the super top-up will become active since Rs 5 lakh of the hospitalisation expenses have already been incurred.

"For convenience, you may invoke only the base health policy if the second or subsequent claim amount is up to Rs 1.5 lakh, and only the super top-up if the claim amount say, is between Rs 1.5 lakh and Rs 5 lakh (assuming the 'net coverage' of Rs 5 lakh is fully available in the super top-up plan). You can also choose to use both policies if the amount cannot be covered by either policy alone," Dang said.

What should policy buyers know? Experts generally suggest that you must buy a super top-up/top-up plan with a deductible equal to the sum assured under your base health policy. This is because when any claim arises, you can use your existing base health policy to pay medical bills up to the deductible and then make a claim using the super top-up/top-up plan for the remaining amount.

Giri said, "In any case, the super top-up/top-up plan will first evaluate the claim payable amount for any claim based on its coverage terms concerning room type, sub-limits, waiting periods etc. If the top-up deductible is Rs 5 lakh and after applying all the top-up cover rules if the amount assessed is more than Rs 5 lakh, then the amount above Rs 5 lakh will be payable in the top-up policy up to its sum insured."

Rakesh Goyal, Director, Probus Insurance, online Insurance Broking firm, said, "If you have a co-payment clause under your base health policy, you will have to share the hospital expenses with the insurance company. For example, if your policy has 10 per cent co-payment then you must share 10 per cent of the hospitalisation cost or admissible claim."

What can existing policyholders do? Experts say that if you already have a base health policy or are already covered by your employer under a group mediclaim policy, then you may consider buying a super top-up plan instead of a top-up plan.

Unlike a top-up plan where the deductible limit applies afresh to each claim, in the case of super top-up plans, the deductible limit applies to the total medical expense admissible under the super top insurance policy, incurred during the year. This simply means that top-up plans work on per claim basis. Therefore, the plan is beneficial if you have made a single claim over and above the threshold limit/deductible limit.

"The super top-up plan becomes active when you have incurred cumulative expenses in an year (admissible for claim under the policy) equal to the deductible/threshold limit (as per the policy). It does not matter who paid for the initial expenses - it could be the patient or their base health insurance policy. Therefore, you can consider buying a super top-up with base health policy to avoid confusion related to deductibles," Dang explained.

Points to note If your medical expense/bill is less than the deductible/threshold limit, then a super top-up or top-up plan will not become active for any claim.

When you buy a super top-up/top-up plan, you must look for the 'net coverage' under the super top- up/top-up policy and know the deductible separately. Amit Chhabra, Head- Health Insurance, Policybazaar.com said, "If an insurer says that the top-up policy has a maximum coverage of Rs 10 lakh then the policy may include Rs 5 lakh as deductible (the amount that has to be borne by the policyholder) and Rs 5 lakh as net coverage (actual base sum insured of the policy). The threshold limit/deductible may vary from policy to policy."

(The writer is Navneet Dubey.) TOP Source

So you thought corona was good for insurance companies? - Deccan Chronicle - 18th September 2020

Health insurance may be the fastest growing business segment in the general insurance sector due to popular awareness about the Covid-19 pandemic, but a significant surge in the number of claims is a cause of concern for insurers.

Insurers have earned revenue to the tune of Rs 450 crore through the sale of corona-specific products, whereas they settled a huge number of claims, paying out Rs 1,430 crore -- almost three times the premia they earned.

This fact was revealed by Insurance Regulatory and Development Authority of India (Irdai) chairman S C Khuntia during a virtual summit held by CII on Thursday.

"Life insurance claims relating to Covid-19 are being settled by insurers within a week’s time. There has been a surge in health insurance claims relating to Covid-19 with a total of 2.38 lakh claims. Of these, 1.48 lakh claims amounting to ₹1,430 crore have already been settled," Khuntia said, adding that the sector has still witnessed a positive growth of 2.4 per cent between April and August end 2020 as compared to a year ago.

The insurance regulator, however, will be introducing the risk-based solvency margin for insurers in the next three years. "As of now, insurers are supposed to maintain solvency margin to the tune of 1.5 times of their total premium. As the risk varies segment wise, it is why the regulator is working on varying solvency margins for various segments," he said.

Khuntia also further asked all general insurance companies to ensure repeat purchase and renewal of policies as these are largely for a one-year time period. "This should be an indicator of your efficiency and customer relationship,” he said, adding that the Irdai is working on standard products for insurance of dwelling units as well as term insurance which would be introduced by all insurers.

The insurance regulator is monitoring the persistency levels of life insurance companies and is also working on standard products for dwelling unit insurance and term insurance as well. The Irdai also wants 13th month persistency at at least 90 per cent and 61st month persistency at a minimum of 65 per cent. “I would urge all of you to move towards this at the earliest. The Irdai would be monitoring this and has also asked all life insurers to try and meet these targets," he added.

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INSURANCE CASES

SC stays NCDRC order asking BMW to replace damaged car of customer with new one - The New Indian Express – 22nd September 2020

The Supreme Court has imposed an interim stay on an order of consumer commission NCDRC directing German automobile company BMW to compensate a customer by replacing his vehicle with a new one after it got damaged in an accident. A bench headed by Justice D Y Chandrachud issued notices to the customer, Dassault Systemes India Private Limited, Bajaj Allianz General Insurance Company Limited, Bird Automotive Pvt Ltd and sought their replies.

"There shall be an interim stay of the judgment and order of the National Consumer Disputes Redressal Commission (NCDRC) dated 10 December 2019, pending further orders. List the Special Leave Petitions for final disposal after four weeks," said the bench also comprising Justices Indu Malhotra and K M Joseph.

The apex court was hearing an appeal filed by BMW challenging the NCDRC order. NCDRC on December 10, 2019 directed BMW to compensate a customer by replacing his vehicle with a new one of the same model after it got damaged in an accident.

It asked Bajaj Allianz and BMW to compensate the loss incurred by a Delhi resident Mukul Aggarwal after the vehicle, which was insured under the BMW Secure policy, met with an accident.

Under the BMW Secure policy, a damaged vehicle is replaced with a new one upon confirmation of total loss of vehicle by a survey report. The NCDRC also asked the company to pay Aggarwal all the expenses incurred, including the registration, road tax and logistics charges paid by him.

The commission, while upholding the state commission's order, dismissed the review pleas filed by BMW and the insurance company, holding it guilty of deficient service for repudiating Aggarwal's claim, which was made after his vehicle got badly damaged in an accident in July 2012. "Now, since it has been held that the repudiation of the claim by the insurance company (Bajaj Allianz) was wrong and amounted to deficiency in service, under the BMW secure policy, the complainants are entitled for a new car from the appellant," the NCDRC said in its order. TOP Source

PENSION

NPS offers option to continue with the same PRAN after partial exit - The Hindu Business Line – 24th September 2020

The National Pension Scheme (NPS), a voluntary defined contribution pension system in India, allows investors to exit from the scheme before maturity after completing 10 years in the scheme. However, in this case, at least 80 percent of the accumulated pension wealth needs to be utilised for purchase of an annuity from an annuity service provider; and only the balance (up to 20 percent) is paid out as lump sum. According to the pension fund regulator - PFRDA (Pension Fund Regulatory and Development Authority) - there have been requests from subscribers, who have withdrawn their lump sum but have not yet availed of the annuity, and subsequently decided to continue the NPS Account. TOP Source

PFRDA offers early leavers a second chance to join NPS – Live Mint - 24th September 2020

The Pension Funds Regulatory and Development Authority of India (PFRDA) has offered another chance to the National Pension System (NPS) subscribers opting for premature exit to join the scheme, it said in a circular issued Wednesday.

Subscribers can do so through re-deposit of the withdrawn amount or opening of a new Permanent Retirement Account Number (PRAN). Under current rules, subscribers can prematurely exit the NPS

55 before it matures when they turn 60. However in this case, 80% of their corpus is converted to an annuity (regular pension) and the balance 20% can be withdrawn as lump sum. Both components are taxable.

After receiving a lot of requests from subscribers who have withdrawn their lump sum (20%) but have not yet availed the annuity (80% of corpus) to rejoin the NPS, the regulator allowed them to return to the pension scheme.

The PFRDA has given two options to such subscribers opting for premature exit, who subsequently change their minds. First, they can pay back the 20% they have withdrawn and continue contributing to the system under their existing PRAN. This option can only be availed once in a lifetime and the re-deposit must be done in a single instalment. Second, they can opt for the annuity and complete the withdrawal process. Following this, they can open a new NPS account with a new PRAN and begin contributing to it.

The 20% withdrawal from NPS is tax free and no TDS is deducted on it by the NPS Trust or pension fund manager. The balance 80% used to buy an annuity is also tax exempt. However, the annuity itself is added to your income and taxed in every year of payment. But there is a smoother alternative to premature withdrawal and re-deposit. You can instead consider the partial withdrawal option under the NPS. Three such withdrawals are allowed up to 25% of the subscriber’s total contributions and are free of tax.

(The writer is Neil Borate.) TOP Source

Atal Pension Yojana gave 11% returns in one year. Here's what it means - Live Mint – 22nd September 2020

Atal Pension Yojana (APY), a government's minimum guaranteed pension scheme specially for workers in the unorganised sector has performed far better than most pension plans. The scheme has given over 11% returns in the last one year. LIC Pension Fund has given 10.94% in the last one year, SBI Pension Fund has generated 11.24% and UTI Retirement Solutions has given 11.01% in the same time period, shows data from Value Research. What does it mean for a subscriber? Will he receive a higher pension amount?

APY provides a minimum pension ranging from ₹1,000 to ₹5,000 on attaining the age of 60. But if your contributions earn more than the assumed rate of return for the minimum guaranteed pension, the excess sum earned would be given to you as an additional benefit.

"If the actual returns on the pension contributions are higher than the assumed returns for minimum guaranteed pension, over the period of contribution, such excess shall be credited to the subscriber’s account, resulting in enhanced scheme benefits to the subscribers," says PFRDA.

However if the actual realised returns on the pension contributions are less than the assumed returns for minimum guaranteed pension, over the period of contribution, such shortfall shall be funded by the Government.

Atal Pension Yojana completed its five years of implementation in May this year with over 2 crore workers under its ambit. The scheme was launched in 2015 by Prime Minister Narendra Modi to deliver old age income security particularly to the workers in the unorganised sector. APY aims to provide a guarantee of minimum pension after 60 years of age.

Any Indian citizen between 18 and 40 years of age can subscribe to Atal Pension Yojana. The amount of pension is guaranteed for lifetime to spouse on death of the subscriber and lastly, in the event of death of both the subscriber and the spouse, entire pension corpus is paid to the nominee.

In April, PFRDA had temporarily stopped auto-debiting savings account of the subscribers for APY contribution till June 30. This was done to protect the subscribers from financial impact of coronavirus crisis. Auto debit for APY contributions resumed from July 1. Any pending contributions towards the scheme, for April to August 2020 can be paid by September 30 without any penalty.

(The writer is Avneet Kaur.) TOP Source

Four situations when your EPF account will not earn interest – Live Mint – 21st September 2020

Once an EPF or employee provident fund account becomes inoperative, no interest is credited further from that date. Until such time, interest will continue to accrue on provident fund, but no interest will accrue once the account becomes inoperative. According to the rules of retirement fund body EFPO, the subscriber's EPF account does not further interest in these situations:

-if an employee retires from service after 55 years -if the subscriber migrates abroad permanently -if the subscriber passes away - if no claim has been received for settlement for 36 months from the date when the amount became payable on cessation of employment (In other words, the subscriber does not apply for withdrawal of his accumulated balance within 36 months of quitting the job. But until such time (36 months), interest will continue to accrue on the PF balances.)

It has to be noted that if the accumulated EPF balance payable to the employee is exempt from tax if he has rendered continuous service for a period of five years or more.

In cases when the employee has rendered services at different organizations, if the EPF balances are transferred to the account it is considered that the employee has has rendered continuous service for a period of five years or more for taxation purpose.

If there is no new contribution to the EPF account, then the account becomes inoperative but still continues to earn interest. However, the accretion to your PF balance after will be taxable in subscriber's hands. Taxes may be paid by way of advance tax or self-assessment tax, as applicable.

(The writer is Surajit Dasgupta.) TOP Source

Contributions to National Pension System grow 6 per cent in Q1; more join up - The Economic Times – 19th September 2020

Bucking the general trend in retiral savings schemes, contributions to the National Pension System grew by 6% in the first quarter of the fiscal despite thousands losing jobs amid a national lockdown to contain the spread of Covid-19.

The government-initiated pension scheme also increased its subscriber base by 1.5% to 35 million in the June quarter, up from 34.5 million as of March end, with maximum additions under the Atal Pension Yojana, official data showed.

“Tax incentives under the scheme for savings was extended by the government twice during the pandemic for 2019-20, which resulted in new additions and increase in contribution,” said an official at Pension Fund Regulatory and Development Authority (PFRDA) that regulates NPS.

Total contribution under the scheme in the first quarter stood at Rs 3.38 lakh crore against Rs 3.18 lakh crore in the quarter ended March 31, showing a growth of 6.3%, according to official data reviewed by ET.

Even withdrawals from the scheme fell by 8% during the pandemic, contrary to Employee Provident Fund Organisation (EPFO) that witnessed a dip in subscriber addition and a surge in withdrawals after the government made special provisions to withdraw under the scheme.

Partial withdrawal under the scheme during the April-August period stood at Rs 59.5 crore against Rs 64.9 crore withdrawn during the same period last year. The number of withdrawals decreased to 8,814 during April-August from 10,527 a year earlier.

Lower withdrawal from NPS can be attributed to a lower percentage of funds available under the scheme for withdrawal, which makes it less lucrative, an industry expert said on the condition of anonymity.

NPS allows only 25% of subscribers’ contribution to be withdrawn at any given time. On the contrary, the government had provided that EPFO subscribers could withdraw either three months’ basic salary of 75% of the kitty, whichever is lower, during the pandemic to help its subscribers tide over any financial crisis.

From the corporate sector, 57% of the contribution to NPS comes from workers in the 26-35 age bracket while the maximum contribution of 34% from all individuals comes from people in the 36-45 age bracket. TOP Source

RFP to onboard new Pension Fund Managers by Dec-end, says PFRDA chief - The Hindu Business Line - 18th September 2020

The Pension Fund Regulatory and Development Authority (PFRDA) will issue the Request for Proposal (RFP) to onboard new Pension Fund Managers (PFMs) by December-end, said the pension regulator’s Chairman Supratim Bandyopadhyay.

The proposed RFP will come up with some entry barriers so that only “serious players” can enter, he said at the 22nd CII Insurance and Pensions Summit, which was virtually held this year due to the pandemic.

“Everybody is welcome. Hopefully, we will not be restricting the numbers. There will some entry barriers to see that only serious players should come. We welcome everybody if they wish to manage it,” said Bandyopadhyay.

Currently, the entire NPS monies (nearly ₹5-lakh crore) are handled by seven pension fund managers, including a few in the private sector. The PFRDA is keen to bring in more players with better remuneration structures. “We are certainly reviewing the existing cost structures of PFMs and other intermediaries. We are doing a cost benefit analysis and definitely very soon we will see some changes,” he said.

For the past few months, the PFRDA has been working closely with the Department of Financial Services (DFS) in the Finance Ministry on the draft FDI rules in the pension sector.

“Once the final FDI rules for pension sector is issued (by DFS), we will come out with a RFP for onboarding new PFMs. Rules for FDI is important and that is why we could not earlier go ahead with the RFP. We don’t want confusion at later point in time,” Bandyopadhyay had recently said.

Meanwhile, the PFRDA Chairman also said that time has come for annuity products in the country to be market linked. “I think there is need for viable annuity and this has to be looked into. Like floating rate home loans, why not there be floating annuity rates,” he wondered. TOP Source

IRDAI CIRCULARS

Gross premium underwritten by non-life insurers within India (segment wise) : For the month / Upto the Month Of August, 2020 (Provisional & Unaudited) is available on IRDAI website. TOP Source

IRDAI issued circular regarding “Video Based Identification Process (VBIP)” to All Life and General Insurers (Including Standalone Health Insurers). TOP Source

GLOBAL NEWS

COVID-19 has changed perceptions towards life and health insurance worldwide - Asia Insurance Review

The attitude towards life and health insurance has changed due to COVID-19. People are being more risk- averse about their own health and showing more concern over protection, according to the seventh edition of ReMark's annual Global Consumer Study (GCS).

In May this year, when many countries had already moved into lockdown, ReMark surveyed consumers in 18 countries to see whether they had changed their attitudes to insurance and risk, as they faced the threat of the pandemic.

The results showed that young people and countries classed as growth markets were among the categories which expressed the strongest views, saying their attitudes had changed towards risk, and the value they place on insurance.

51.3% of Gen Z’s(those born after 1996) attitudes have changed compared with 22.3% Boomers (those born between 1946-1964)

81.9% of people in India said their attitudes had changed compared with 13.2% of Germans.

ReMark CEO Ms Na Jia believes the results have an important message about the approach and adoption of insurance. She commented, “The global pandemic has seen an acceleration of trends which have been developing over the last few years. For younger generations, the pandemic has been a fast-track introduction to risk giving them a level of risk consciousness which normally takes a lifetime to acquire.

“With mortality tables dominating social media feeds, the so-called ‘digital natives’ are suddenly becoming more risk aware and are reconsidering the value of protection much earlier than their more experienced counterparts. There has also been a re- evaluation of risk in growth markets such as China, India and Mexico where 60% of respondents said they had changed their view on insurance as a direct result of the pandemic.”

Changes all around The changes in the life and health insurance sector, in the ReMark GCS, reflect the trends which other business sectors are facing. As 2020 has put the world in turmoil, people have redefined the concept of what is essential and have therefore re-evaluated their requirements, which includes having the correct level of insurance.

The move of markets into lockdown has also restricted traditional sales and forced people online, with the more tech-savvy markets and age groups making a faster and smoother transition to contactless purchasing.

The adoption of contactless sign-up through fast and easy to use apps has made a range of insurance products much more accessible. This was demonstrated by a 74% global increase of respondents saying they preferred contactless channels. This change was to a certain extent down to necessity but shows the direction the markets are taking. It is also important that people who have migrated to contactless channels; want to be more pro-active about their health and are looking to exercise more.

Geographical variations in the change to contactless channels is unsurprisingly linked to tech adoption. The penetration rate of insurance in China (85.7%), India (83.9%) and South Korea (82.1%), countries which have high levels of smartphone use, is a lot higher than Ireland, UK and Australia (57.2%, 46.0% and 45.5% respectively) and where there are much lower levels of smartphone usage. The move to digital services is also linked to a younger clientele which has grown up using apps.

However, these age groups also have heightened expectations when it comes to customer service, so contactless interaction must be efficient, fast and easy.

ReMark’s GCS also looked at where consumers get advice from and the sources of information they trust. The most avid users of social media when faced with questions of health, Gen Z's and millennials, are more inclined to put their faith in traditional sources of information. They will sign-up and purchase health insurance online but only 5.4% would trust social media to provide them with advice.

“When we commissioned the GCS the terms coronavirus, COVID-19 and pandemic were virtually unknown. As the research was taking place, we were all getting used to the realities of lockdown and social distancing, and the findings highlight the differences in response to the virus depending on how old you are and where you live,” said Ms Jia.

“One fact is clear, products like life insurance have become more desirable with 40.6% of consumers changing their minds about insurance because of COVID-19. And, more and more buyers of life and health insurance are buying it online. This may have been due to lockdown, stopping face-to face meetings, but this year 42.3% of consumers preferred digital channels, compared to 24.3% in 2019, which is a significant change.

It is also interesting that young audiences appear to be much more discerning where they get advice and information from, which is very good news as we go through these difficult times.”

The GCS study was conducted in 18 countries with 10,720 people surveyed between the 12 and 20 May 2020. The fieldwork was carried out by Dynata with all analysis and results preparation being carried out by ReMark. TOP Source

US: COVID-19 forces re-evaluation of life insurance needs - Asia Insurance Review

Forty-one percent of American adults feel that the COVID-19 pandemic has changed how their family handles finances and nearly one in four (22%) will consider increasing their life insurance coverage this year, according to a recent survey by disability income provider group Unum.

"The pandemic has changed our lives, and it's not a surprise that more people are thinking about how they are protecting their families with life insurance,” said Unum executive vice president of group benefits Chris Pyne.

While 22% of the people covered said the pandemic caused them to consider adding additional life insurance coverage, the numbers are even higher among several groups, including households with children (34%), black adults (36%), Hispanic adults (38%), Gen Z’s (38%) and millennials (30%).

The survey found that in nearly half (48%) of households, the death of a family's primary wage-earner would cause financial strain in less than three months. Mr Pyne said, “For most people, the ability to earn an income throughout their life is the biggest asset they have."

The survey also revealed that most Americans don't understand how much life insurance they need—and 45% don't have or know if they have life insurance.

When asked how much life insurance they need, more than one in three (36%) of respondents said they need the equivalent or double their annual income and another 28% believed they need three or four times their income.

However, non-profit organisation Life Happens recommends that people should have 10 to 15 times their annual salary in life insurance coverage for funeral expenses, household bills and future financial obligations, like education or retirement, should a wage earner die.

The online survey was conducted between 25 August and 2 September 2020 among 1,002 US adults. TOP Source

COVID-19 highlights weaknesses in insurers' enterprise risk management – Asia Insurance Review

Although enterprise risk management (ERM) has evolved rapidly over the past decade, the COVID- 19 pandemic has served to emphasise that (re)insurers still can be affected by "unknown unknowns" and "unexpected accumulations", according to a new AM Best Report.

Reinsurance, and to some extent, insurance, has thrived on globalisation with limited barriers to entry. With this has come an increasing interconnectivity of risks between markets and participants, and the consequences of a higher risk of contagion between insurance and other sectors.

As these risks have become intertwined in increasingly complex relationships, insurers cannot expect to be immune to economic slumps and supply chain disruptions, said the report.

“Conventional wisdom had led most observers to expect that the greatest impact of a pandemic would be to the life and health sector, but in reality, it is likely that property/casualty insurers and reinsurers will feel the brunt of the impact to this event. In turn, COVID-19 is testing insurers’ ERM approach, practices and resilience to current market conditions,” said AM Best criteria senior director Mahesh Mistry.

The report said that while the insurance industry is well-capitalised, the impact from the pandemic will affect insurers’ balance sheet and operating performance to varying degrees.

However, AM Best believes lessons learnt from the past and by this pandemic should equip companies to understand their exposures better and adopt even more robust risk practices in the near future. TOP Source

China: Comprehensive auto insurance reform may drag down short-term growth of property insurance - Asia Insurance Review

With the formal implementation of comprehensive auto insurance reforms beginning on 19 September, P&C insurance premium growth may be slowed in the short term.

Mr Sun Jianping, chairman and CEO of Ping An Property & Casualty Insurance, said that the industry will definitely undergo a period of pain. In the short term, the growth of auto insurance premiums in the industry may decline or even turn negative. The comprehensive cost ratio may exceed 100%.

But he added market-oriented reform is most important in China's auto insurance industry. He said, “Only by advancing market-oriented reforms can long-standing deep-seated contradictions and problems in the auto insurance market be resolved, and auto insurance can further achieve high-quality development.”

The problems include low compensation levels and high fees, unruly competition and extended operations, reported Securities Daily.

Mr Sun believes that these latest reforms are people-centred, and the relevant measures are highly targeted. They fully consider the risks and pain points faced by consumers when using cars, and can provide them with more comprehensive risk protection.

S&P Global Ratings said in a recent report that under the reforms, the auto insurance industry’s premium rate will fall over the next two years on the back of adjusted pricing factors and the slashed commission cap. These adjustments will stoke market competition. On the other hand, the reforms will expand motor insurance offerings and grant insurers more discretion in risk selection and actuarial pricing, which will promote more sustainable growth in the sector. TOP Source

China: Govt to revamp basic medical insurance system - Asia Insurance Review

China has set in motion plans to restructure the country's medical insurance system in a move that could directly affect more than 300m urban residents and likely to have implications for commercial health insurers.

The restructuring initiative marks the first revision of the 22-year-old scheme covering urban employees, and includes changes discussed for more than a decade that will alter how billions of Yuan of contributions will be managed and spent, reported Caixin Global.

China’s National Healthcare Security Administration, a sub-ministry-level government agency managing China’s public health insurance programmes, published a draft plan on 26 August to revamp the urban employee basic medical insurance system — one of the key pillars of the country’s state-backed social safety net. Exact details of key elements remain to be settled and there is still no final implementation date.

The state health insurance system includes two parts. One is for urban employees, funded by money collected directly from workers’ monthly salaries and their employers. A separate system covers the urban unemployed and rural residents and relies heavily on government subsidies because of low personal contributions. Altogether, the system covers nearly 95% of the country’s 1.4bn population, allowing people to get 50%–90% reimbursement of medical spending. TOP Source

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