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Catering to consumers in coronavirus times, IRDAI pushes new products, easier KYC norms

IBEF:  December 29, 2020

IRDAI, the insurance regulator from Corona Kavach to Corona Rakshak, made efforts during the pandemic-disrupted 2020 to ensure better choice of insurance plans for individuals covering the cost of treatment for health conditions linked to coronavirus.

The notable measures of the regulator this year include the introduction of uniform goods with a view to improving consumer trust and simpler requirements for know your customer (KYC).

As COVID-19 started to circulate in March, the regulator asked insurers to settle hospitalisation lawsuits over treatment linked to coronavirus infections quickly and decisively.

And the Insurance Regulatory and Development Authority of India (IRDAI) has also advised insurance undertakings to devise unique products to fund coronavirus-related treatment costs. Soon, the short-term strategy of Corona Kavach was introduced.

The regulator has launched many innovative insurance products in the last six months, including a range of new insurance products, including Corona Kavach, Corona Rakshak and Arogya Sanjeevani.

Mr. Tarun Mathur, Chief Business Officer of Policybazaar.com, said, “The insurance regulatory body believes that, due to the standardisation of the process and the widespread accessibility of the services provided, the implementation of standard insurance policies would make it easier for customers to choose services.”

Mr. Niraj Shah, Chief Financial Officer of HDFC Life said, “The regulator has been constructive and customer-centric, encouraging the production and delivery of products that provide consumers with relevant benefits.”

Facilities such as wet signature alternatives where OTP (One Time Password)-based consent can be received for insurance policies and the implementation of video KYC is in the interest of both consumers and the industry, he said.

“We remain positive about the insurance sector's medium to long term prospects in India. We assume that safety and retiral classifications are opportunities for several decades and will expand faster than savings.”

On the back of increased awareness and the need to build savings for the long term and protect one's current assets, he said, “we expect insurance demand to remain robust.”

Mr. Mathur said IRDAI issued a memorandum to all life insurers in an effort to make insurance accessible and available to all parts of the company, encouraging them to come up with a basic individual life insurance policy called 'Saral Jeevan Bima.'

He said, “In the life insurance market, the implementation of the Saral Jeevan Bima scheme would be an innovative step as the plan aims to provide security to people of Bharat who are otherwise left behind without any coverage and financial protection.”

On January 1, 2021, the product will be introduced.

In July 2020, COVID-19-specific products came out. There were a number of such covers before that, but those were mainly low-sum-assured products.

Demand for conventional health products also showed strong growth until July 2020.

But after the launch of the basic COVID goods, people who were previously unable to afford the detailed policies began purchasing COVID-specific products, Mr. Mathur said.

“The pandemic also pushed insurers to accelerate digital initiatives both in consumer acquisition and on the claims services front,” said Mr. Anand Roy, Managing Director of Star Health and Allied Insurance.

Some health insurers have also launched unique programmes this year, such as tele-medicine consultation and products with an increased emphasis on the well-being of the mind and body.

Mr. Roy said, “There have been several changes from a customer service perspective in which the regulator IRDAI standardised health insurance policy exclusions and the number of non-covered items has been decreased from 199 to 68 items. In addition, to cover these 68 exempt products, the regulator made arrangements for insurers.”

In the last financial year until October 2019, the insurance industry's health retail growth rate was 10.95% and the retail segment's market share was 36.26%. In this fiscal period until October 2020, the growth rate in the health retail segment is 33.64% and the retail segment's market share is 42.30%.

Mr. Roy said, “We expect IRDAI to continue the great work done in the past. In 2021 take more customer-friendly measures that will lead to increased health insurance penetration in the Indian region.”

Mr. Akash Anand, Managing Director of Bimakaro, stated, Portability requirements for health insurance should be rendered easy and transparent to insurers and covered individuals to ensure that they are adequately enforced.

For eventual success and greater penetration of health insurance services across India, the purpose must be accompanied by clarification.

Bharti AXA Life Insurance MD and CEO Mr. Parag Raja said, “In 2020, the insurance industry has adopted enhanced customer-focused strategies, adequate cover for pandemics, improved digital connectivity, quick resolution of claims, and expanded incentives and rewards for goods and services.”

He said, “We are optimistic of overcoming the uncertainties around COVID-19 and moving back to the pre-COVID levels in the next fiscal, as we look at a 2021 rebound from the pandemic and the subsequent potential consequences.”

In announcing steps that made safety items readily accessible to everyone in the midst of the pandemic, IRDAI was very prompt. Industry hopes that the regulator will also hold the pace up in 2021.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.