Hyderabad: More people will look to take a term insurance and an adequate health insurance cover in days to come. This is mainly because the perception of risk has changed due to coronavirus. Also, most of the transactions will turn digital ensuring that there is no need for people to visit branches or the diagnostic centres.
According to Ramani Vaidyanathan, Head, Products and Innovations, Policybazaar.com, people are understanding that a vaccine for coronavirus is not likely any time soon and it is better to have an adequate cover.
Among others, the sales channels of the insurance companies will see a sea change and most of them will be through digital channels. Telemedicals, where the risk as assessed remotely, is here to stay. Many companies have already adopted during telemedicals during the Covid times, he said adding that customers will also not be willing to visit physical offices or the diagnostic centres for undergoing tests. In some cases, recent medical test reports will also be honoured.
Currently, about 15 per cent of the insurance business comes from the digital channels. There will be a significant jump in this as people will look avoid coming in contact with others, he said.
Among other things, finding customers, onboarding them and KYC will be through video conferencing and other digital channels. The underwriting processes will be standardised as much as possible.
Will premiums rise?
Gurdeep Singh Batra, Head – Retail Underwriting, Bajaj Allianz General Insurance, said: “In short term of say 6 to 9 month period, we do not see any reactive changes for product price due to pandemic. We need to look at a reasonable longer period on how this virus infection prolongs and lingers affecting health of the population.”
However, average claim costs are going up due to additional medical care like pre-medical treatment Covid-19 tests, medical sanitisation and the like.
Traditionally Indian consumers have been risk averse. Now, the risk perception has changed and many are thinking they are susceptible and are opting to take a fresh cover or top-up the existing policies to save on medical expenses, said Vaidyanathan adding that less than ten per cent of the people have health cover. Those who have a government supported health cover like the CGHS are not included in this.
In terms of customer behaviour, uninsured population has become more sensitised on the need for health insurance with more inquiries coming in. Customers already insured are looking at increasing their base sum insured and availing top up cover so as to be cost effective, Batra added.
Along with other challenges, insurance companies had to battle the mindset of expecting returns on insurance premiums paid. For that reason, some companies have come up with policies that offer to return the premium at maturity, he said.
The industry, which has seen a small percentage of frauds and impersonation, is working to lower the cost of frauds to avoid higher payouts, he said.
“Health and wellbeing will be incentivised for policy holders,” the Policybazaar official said. On the trends, he said more people will buy specific covers like for swine flu, dengue and others as these are low priced and allow them to preserve main health cover limits.
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