Category: Banking & Finance

After the second wave of Covid-19 swept India in April-May, insurance companies settled about 80 per cent, or more than 15.39 lakh health claims exceeding ₹15,000 crore as on June 22, said a top IRDAI official.

“Over 19.11 lakh Covid health claims have been reported as on June 22 as far as medical insurance or hospitalisation is concerned.

“While in terms of death claims, which is handled by life insurers, about 55,276 claims have been intimated and, nearly 88 per cent, or 48,484 claims amounting to ₹3,593 crore, have already been settled,” said TL Alamelu, Member (Non-Life), IRDAI, while inaugurating 13th Global Insurance E-Summit organised by industry chamber Assocham.

She added that the repudiated claims for health is 4 per cent and in life it is just 0.66 per cent.

Not under cover

Alamelu, however, said that these figures showcase the opportunity available for insurers; although Ayushman Bharat covers health for many people, there are other schemes, including specialised State schemes, but many people are not covered by insurance in any form.

“Now, we are grappling with the problem that most of these people have spent good amount of their savings, it has even taken down many below the poverty line, they have gone into debts, sold up their assets, pledged their jewellery and have been pushed back to worst times,” she said.

“The industry has tremendous responsibility, especially for a nation like India, to offer protection and just not assume that people will not take insurance. There has to be aggressive probably, more sort of forcefully sell insurance because it is no longer an option,” Alamelu added.

She noted that both the insurance industry and regulator have worked together to design new policies to cater to the demands of new and unprecedented situation.

“We have also eased some processes and procedures to make it easier for servicing the policyholders.”

Talking about the micro, small and medium enterprises (MSMEs), she said: “There is a lot of focus on MSMEs, with the spate of recent initiatives by the government, and insurance has a very important role to play here. The safety net offered by insurance keeps various industries thriving in a healthy manner. This spells greater employment, demand and consequent greater supply and the cycle goes on.”

“The regulator has created standard products for MSMEs with policies such as Bharat Laghu Udyam Suraksha, Bharat Sookshma Udyam Suraksha and others such as Bharat Griha Raksha for householders; all these specifically cater to the middle class and lower middle class, and the industry should take this opportunity to ensure that everybody has this sort of insurance in their pocket,” she added.

Good performance

On the insurance industry’s performance, she said that it grew extremely well to end the last financial year with combined life and non-life at 9 per cent growth, while this year, starting in April-May, a growth of 17 per cent has been registered.

On the growth prospects of insurance industry in next five years, she said that it can easily grow well at 40-50 per cent to be extremely optimistic if things are settled down and, otherwise, it should grow at 25-30 per cent as the world is there for them to take advantage.

Saurabh Mishra, Joint Secretary, Ministry of Finance, said that digitalisation is one factor that has contributed to the resilience of non-life and to a great extent in life businesses in every sphere of activity – from distribution and sales to post-sales.

This has proved to be a game-changer that has helped avoid a standstill in the new business due to mobility restrictions implemented to contain the pandemic.

“In the new normal of technology, it is not just an important element for us to drive it out, but is going to play a pivotal role in transforming the insurance businesses to make them more digital and customer-centric, cutting across every sphere of the customer experience – claims efficiency, fraud proofing,” said Mishra.