Effect Of Covid-19 on the Health Insurance Industry

Covid-19 has affected multiple sectors in India, and the health insurance sector is also one of them. There have been some positive changes and some difficulties in the health insurance industry. The insurance providers bring in these alterations to settle according to the new regulations of the pandemic and continue to provide their services to the customers without any hindrance. Covid-19 specific health insurance plans are included in the regular health insurance plans for the policyholders.

The health insurance industry has entirely opted for a digital mode to operate the purchase and renewal of health insurance policies using the official website of the companies. The purchase of health insurance policies has increased significantly in the last few years as people have understood the value of financial support for medical casualties. In addition, individual and family health insurance are purchased extensively after the pandemic. In a period where the industries have borne the brunt of the economic burden, the health insurance sector has coped quite flexibly and met the needs of the people and the world.

Covid-19 impact on the Health insurance industry

    Claim Payouts - The IRDAI has made it compulsory and informed the health insurance providers to add Covid-19 covers in their normal health insurance plans for all the customers. As the treatment of coronavirus has not been added to the active products, such claims made by the insurance holders stress the insurers, especially when not given proper treatment at the government hospitals. The companies have to re-assess their finances since the number of claims for other diseases has also increased. People continue to suffer from serious ailments like diabetes and respiratory infections, and they are more critical to get infected by the coronavirus. Moreover, due to the extension in the grace period of 30 days for renewal, the health insurance sector faces some serious liquidity problems.     Development of products - To cater to the ever-increasing and exclusive requirements of the policyholders, the health insurance providers have certain developments and changes in their health insurance policies. Certain companies have launched some new benefits, while others have included these covers under existing health insurance policies. These announcements are made to serve the people's demands, and many features like a short waiting period, broad coverage, expenses for protective gears etc., have been added.     Increased Sales - People have realized the need for financial stability for medical issues, and hence, more and more people are purchasing health insurance policies for themselves and closed ones. There is a wide range of options in the insurance sector for the customers to choose from.     Reserve requirements - Due to the economic burden caused by the pandemic, the government of India has decreased the repo rates and bond interests, which can make it difficult to keep up the reserves, credit risks and liquidity risks.     Payment of premium in Installments - After the ravaging effect of the Covid-19 pandemic, the health insurance providers have allowed the customers to pay their premiums in installments. This provision enables the policyholders to avoid financial depletion as it makes health insurance policies more convenient and covers a plan with a good sum. The premium payment option is available quarterly, half-yearly, monthly or annually.     Digitization of the sector - The health insurance companies have started an online KYC service for the customers to do away with physical verification or office visits. This has made it more convenient and easier for the customers.     Uncertainty revolving around premium collectibility - According to the predictions of the revenue impact of Covid-19 on the health insurance industry, it was observed that premium payments might be postponed to conserve cash. Latest health carrier measures have targeted giving relief to customers due to problems related to Covid-19.

The worldwide pandemic made many changes in multiple sectors across the country, one of which is the health insurance sector. Though the health insurance industry has had positive impacts, its problems are not insignificant. However, it continues to cater to the needs of its customers appropriately.

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