The health insurance industry is witnessing a rise in claims due to the Covid-19 pandemic. The stakeholders are looking at ways to deal with this situation and also trying to ensure that the consumers are not financially hit hard. Anand Roy, Managing Director, Star Health Insurance, spoke to Money9 on how his company is tackling post-pandemic challenges.
Edited excerpts:
Q: How has the health insurance policy changed post-pandemic?
Roy: Health insurance has not changed much but the awareness of health insurance has changed substantially after the pandemic. Today, we see customers across age groups across income segments, across various employment segments are coming forward and buying health insurance, which is good for the population at large.
IRDAI took a lot of steps during the lockdown and pandemic to introduce standard cover for the COVID coverage. As well as a lot of standardisation in the benefits of health insurance was brought about to help the customers in the claims processing.
So, I would say that all of this has led to greater awareness about health insurance in India. And that’s one of the reasons why the health insurance business segment is growing rapidly over the last six months.
Q: How has been your claim experience? How much amount insurers have paid so far towards COVID-19 claims?
Roy: I can divide this into two segments. One was up to September when there were a strict lockdown and customers were not so much going out at all because of which the claim hospitalization claims were relatively very low. But after the lockdown opened and the number of cases started rising we saw a tremendous surge in COVID-19 claims in the second half of the year in 2020. There was a surge of COVID-19 claims. The industry has got more than 1 million COVID-19 related claims. Star Health also, being a very large player, also got a substantial amount of claims, both in COVID-19 as well as non-COVID-19.
As we speak, there is a little bit of a downturn in the number of claims because the claims in the health insurance industry move up and down along with the general population trend. The number of cases when it was rising, the claims also were going up and as the number of cases fell down, the claims also came down. Because of the improved protocol of hospitalisation and home isolation, the number of cases came down substantially.
But now again the cases are again going up in some parts of the country. So this is an evolving scenario. We are watching it closely. We are also working closely with all our service providers that is hospitals to ensure a very seamless customer experience.
Q: Can this adverse claim experience lead to an increase in health insurance premium?
Roy: This may lead to an increase in health insurance premiums because ultimately health insurance business is dependent on the losses, which is prevalent in the business itself. So as the number of cases is going up as the cost of hospitalisation treatment is going up the premiums will also go up for the health insurance products but these depend upon company to the company upon product to product. Different companies may take a different view based on their own experience.
Q: What is the average increase likely in insurance premium?
Roy: Well, it is very difficult to say that because as I told you different companies have their own different experiences. But on average, I have seen from the past that whenever there is a product price increase at least a 20 to 30% increase in premiums are generally what can be expected.
Q: Will there be some waiting period for coronavirus survivors?
Roy: There is no special waiting period for coronavirus survivors. They will be treated as any other normal customer. As for the policy terms and conditions, there are some waiting periods that will be applicable to them also. For example, pre-existing disease waiting period or some specific treatment waiting periods which are there in most of the insurance policies. The same waiting periods will apply to anybody who was recovered from coronavirus. There is no special waiting period for them.
Q: Are you seeing people renewing their Corona specific policy, as it was meant for the short term? Does the premium change for Covid survivor or if there is some waiting period for them?
Roy: Corona Kavach policy was introduced by IRDA at the peak of the lockdown. And as a company, we did very well in promoting that product.
We sold close to 5 lakh policies across the country. Most of the policies though, there was a short-term option. Most of the customers went for nine months of coverage. That is full coverage for that policy. We are yet to see any renewals which will come up probably in the next month or two because most of the policies have not yet come up to the renewal stage.
We are proposing to reach out to all these customers and educate them about the importance of renewing their health insurance policy. Probably move from Corona coverage policy to a more comprehensive health insurance plan so that they will be covered not only from this particular virus but also for all kinds of medical ailments. We have yet to see the renewals coming up.
Q: Are corona specific policies substitute for comprehensive policies. What will be your advice for our readers?
Roy: I would recommend that they should go for a comprehensive health insurance plan, which will cover the family and themselves against all kinds of medical ailments, including coronavirus. Because as you can see the coronavirus pandemic is here to stay and not only coronavirus related ailments but people are also facing other kinds of ailments also due to this lockdown. There are a lot of other kinds of lifestyle diseases, which are on the rise because of this. So I would highly recommend that everybody should go for a comprehensive health insurance plan, which will cover their family members.
And they should also ensure that the seniors in their family are also covered. By taking a senior citizen policy because they are more susceptible to this particular virus, as well as other diseases. So this is the right time to plan for health insurance for themselves, their family and the elders in the family. So I would strongly recommend everyone to go for a full-fledged plan.
