MUMBAI: The insurance regulator has said that health insurance has become the largest insurance segment by a wide margin but the protection gap in smaller cities remains a concern.
“The insurance industry has come up with 500 health insurance products in the last 20 years. Since March 2020, we have approved 130 products. Health is already bigger than motor insurance and at the current rate will overtake motor by leaps and bounds by the end of the year,” said TL Alamelu, member, Irdai, speaking at a FICCI virtual health insurance conference.
She, however, said that the protection gap as reflected by the ratio of insurance claims to the number of patients was very low and this has serious implications for the financial health of the poor and the middle class. “As of Wednesday, the number of Covid-19 cases was 27. 7 lakh while the number of Covid-19 claims was only 1.25 lakh. This means that 96% of the patients are not covered,” she said. On the positive side the number of complaints concerning Covid-19 claims was very few, she said.
She said that this has far more implications than during a natural catastrophe where the gap was limited to economic losses minus insured losses. For the uninsured, the health costs would hit hard as it comes at a time when there was an economic contraction and loss of jobs. This could lead to economic distress not just for the poor but also for the middle-class. This also increased the risk of non-treatment or under-treatment as the epidemic moved to smaller centers.
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According to Alamelu this called for a rethink in the way health insurance is being undertaken. The Corona Kavach , a standardized cover specific for the treatment of Covid-19 designed by Irdai, has seen sales of 7.5 lakh policies covering 12.8 lakh individuals with a sum insured of Rs 215 crore. The Corona Rakshak, the add-on cover has sold 1.9 lakh policies covering 2.2 lakh for a sum insured of Rs 29 crore.
“This is a sharp contrast to the sales of Aarogya Sanjeevani (an Irdai designed standard health cover) which has seen only 72,000 policies sold,” said Alamelu. She said that this indicated that people were willing to purchase ailment specific cover and a limited cover was better than no cover at all.
Source: Times of India
