Covid-driven awareness creating more demand for health insurance: ABHI

New Delhi: Covid-19 pandemic has left a lasting impact around the world, and the masses are taking a greater interest in availing health insurance. Post-outbreak of the deadly pandemic, health insurance companies in India have seen a record sale in health and covid insurance.

Health insurance expert Mayank Bathwal, CEO, Aditya Birla Health Insurance Ltd (ABHI), speaks with Bizz Buzz on the surge of insurance trends amongst millennials and the misapprehensions that continue to cloud the insurers on aspects such as insurance policies, premiums, and covid-claims.

With a surge in Covid cases in India once again, what would be the approach of insurance companies to provide health insurance based on criteria's such as age group, place of domicile, comorbidities, and income groups?

Insurers will continue to offer covers as was the case last year during the onset of Covid. With Covid-19, the awareness for health insurance has increased and this is a great opportunity to expand the penetration of Insurance beyond traditional segments and reach the younger population and, also increase the low amounts of cover that customers typically take.

Will the premiums go up with a surge in Covid cases as the vaccination drive is at its beginning stage?

While covid and recurrence of Covid is a concern, initially, the occurrence non-covid claims had fallen to somewhat counterbalance the covid claims. But recently in the last two to three months, we are observing that the non-covid claims are slowly returning to the normal levels. Also, we have seen the cost of non-covid claims go up which is a cause of concern. In addition to the covid testing and cost of PPE, there is an approach to charge more than appropriate to compensate for loss in overall volume and bed occupancy.

This is a great challenge for the industry that assumes a particular medical inflation allowance year on year in the pricing. The shape of change in the Average claims size for non-covid in future is going to be critical for insurers to manage the portfolio. We really need concerted efforts at the industry level to impress upon this with the provider ecosystem such that customers are not unnecessarily burdened with cost increases due to higher fraud, waste and abuse.

What would be the policy approach by the insurance companies on Covid coverage for tier-II and tier-III cities?

Covid-19 pandemic has implored people to do a reality check on their health insurance coverage, and hence it has led to a surge in demand for health insurance policies. Awareness is a major contributor that has positively pushed people towards getting their health insured. In a country like India, where insurance penetration remains abysmally low, health insurance was never seen as a must-have.

This pandemic has seen a significant change in level of awareness in health insurance. People are now more aware of the benefits of health insurance and how it reduces the financial burden in case of an emergency health crisis. There has been an increase in overall health insurance penetration by significant per cent; with a three-fold increase in tier-II & III cities.

Another reason for the boom in the health insurance sector is a stressful and unhealthy lifestyle followed by most of the people these days. This has led to a significant increase in the lifestyle-related ailments including Diabetes and Hypertension, increasing the necessity of getting insured. The insurers have increased the number of network hospitals in tier-II and tier-III cities to provide quality healthcare services to the population. Considering cheaper hospitalisation and healthcare costs in tier-II and tier-III cities in India, the premium for health insurance policies offered there is also kept low.