The Indian insurance sector in general is well equipped to deal with major loss incidents, including epidemics; However, the financial implications will take time to participate in and will be explicit from the insurance company. Insurers are acting in response to the growing COVID-19 outbreak on many fronts – such as claim payers, owners and investment executives. Each has its own stand-off, not only for the insurance sector, but for the global economy and the public in general.
What would have been an amazing year for the Indian insurance sector in terms of premium growth is suddenly staring at a situation where coordinating last year’s number seems a daunting challenge. The last three months of the fiscal years were the months when the peak collection for the industry was observed.
Now due to the serious shutdown last week of April, the premium groups are starting to suffer greatly. The blow has been massive because most cities are now under lockdown. Due to flight cancellations, travel insurance is not purchased by customers. Purchasing new policies as insurance companies need medical exams takes time and delays. There is no longer a new policy to be issued to NRIs or those with an existing travel history. Therefore, in general, the insurance sector has been affected in many directions.
Insurance premiums for a death claim claim
In addition to losing new business premiums, the insurance industry is looking at the challenge of increasing death claims. Although the government has progressed positively and went into a complete 21-day lockdown even before the death toll rose to double digits. However, as early signs of community spread became apparent and the size of the state became apparent, nothing could be taken for granted. Insurance agencies feel that it would be premature at this point to comment on the massive increase in death claims in life insurance. If India can manage the spread efficiently, there may be less impact on life insurance claims. Speaking of life insurance policies, a number of organizations will continue to honor claims on existing policies to the contrary; The price of future policies will see rates increase and the number of policies offering comprehensive coverage may see a decrease,
Clarification of IRDA
Corona is heading to the main challenge that the Indian insurance sector has witnessed so far. The infection is spreading all over India and there is a very real risk of it spreading significantly. Treating COVID-19 can require lengthy hospitalizations, which can be costly. Many individuals have some type of health coverage, whether it’s a company with a personal health cover. Although this virus is new, there is a lot of uncertainty as to whether or not cases of corona will be covered under the health policies presented. To address policyholders’ concerns and to clarify coronavirus coverage, insurance regulator IRDA came with instructions to insurers on March 4. IRDA says that if hospitalization is covered, insurers must ensure that issues related to COVID 19 are addressed quickly.
Although insurance companies are listed on the Register of Exempt Services under lockdown with common restrictions on movement, there is hardly any opportunity for new business. Insurance players with a strong digital infrastructure should outperform others if there is a sharp rise in COVID-19 cases (as observed in China and Italy). One of the major challenges for insurance companies can be enabling alternative working arrangements for their employees and sales force to be more flexible and able to handle increasing claims and faster response times.