How COVID-19 is changing the insurance sector in India?
The COVID-19 pandemic has penetrated every sphere of our lives, from businesses to day-to-day activities. This pandemic has created turmoil in every sector in India. Popular sectors like travel, trade, logistics, hotel, etc., have changed their perspectives and adopted new approaches to stay competitive during this pandemic. The insurance sector in India has also experienced various changes and challenges during this COVID-19 pandemic. To sustain this pandemic, private insurance companies in India revamped their strategies in terms of product offerings, services, operations, processes, claims, etc.
How COVID-19 is changing the insurance sector in India?
The COVID-19 pandemic has brought three primary changes to the insurance industry in India as mentioned below:-
- Insurance companies are offering covid coverage as a service
- Digital or virtual presence
- A shift in paradigm
1. Insurance companies are offering covid coverage as a service
This COVID-19 pandemic has taken millions of lives around the world. In India, the death toll is nearly 4.4 lakhs. Thus, this is one of the lethal diseases in the history of the world. Therefore, many insurance companies in India refurbished their approaches and ensured that COVID-19 coverage is offered to every policyholder to cope with the scenario so that the policyholders and their family members can get rid of the extra financial pressure because of COVID-19.
Since COVID-19 has an impressive fatality rate, insurance companies are offering protection by launching new standard products. The prime motto of the companies is to serve their customers in the best possible way during this challenging time. Therefore, insurance companies have introduced COVID insurance India plans like Corona Kavach and Coro Rakshak to treat COVID-19. The core objective of these plans was to safeguard policyholders from any financial stress that may come with the treatment of COVID-19.
Moreover, COVID-19 has forced claim processing faster, and hospitals are also offering cashless services to patients. Covid insurances offer significant coverage amounts and also ensure the utmost protection to policyholders and their family members. Moreover, the Insurance Regulatory and Development Authority (IRDAI) (acts as a regulator of the insurance sector in India) has instructed insurance companies to offer cashless claims to the insured and settle the claims promptly.
2. Digital or virtual presence
The COVID-19 pandemic has influenced every sector to adopt digital platforms and stay competitive during this time. During this pandemic, there is a sharp increase in online transactions, payments, purchases, etc. All these have motivated insurance companies to enhance their online presence with a spectrum of beneficial services for policyholders.
Within a few clicks, the policyholders can upload their documents and process them without compromising their safety. In addition, insurance companies are focusing on some digital services, including easy access to the policy and coverage details, better comparison choice, an online application process, quick premium payments, and a worry-free claim settlement process. These days, insurance providers are also trying to implement automation to their processes to offer impeccable and better customer services.
The pandemic has influenced many insurers to adopt digital platforms to satisfy their customers. By using data-driven approaches, companies are now serving their customers in a better way. So, digitization is the key transformation that the insurance companies have adopted to sustain during the COVID-19 pandemic. Nowadays, insurance companies are exploring different digital ways and moving more online to satisfy customers’ insurance needs.
The insurance sector is traditional and employee-centric. However, with the arrival of the digitalization of this industry, there will be a huge impact on its enormous employee base. Though many businesses have switched to digital platforms still, many of them will need face-to-face communications. Thus, insurance providers need to ensure that their employees access imperative data and applications safely while working from home.
3. A shift in paradigm
The insurance industry is jam-packed with various types of insurance services. Over the past one and half years, some major changes have been experienced across various types of insurance policies. There is a huge surge for health and life insurance policies, while the demand for other insurance policies has been subdued because of the restrictions imposed to control the spread of the virus. Health insurance companies have noticed a striking jump in medical coverage-related inquiries. Nearly 30-40% more people are looking for medical insurance coverage to stay protected against COVID-19. As a result, IRDAI has instructed insurance companies to include covid-19 cases under their insurance plans. The company will pay 50% once diagnosed, and the remaining amount will be paid while quarantined in a military or government hospital.
Since most people used to conduct their business and work from home thus, it would become an uphill task to collect premiums for other insurances. However, this is a temporary commotion, and experts believe it will become normal in upcoming years. Until then, most insurance companies focus on health and life insurance policies to stand out in the market.
The customers’ demands and expectations are constantly changing. Therefore, the insurance industry should adopt new strategies to keep up with the changing behavior of consumers. The insurance industry in India has 57 total insurance companies in India. To stay ahead, every company should learn from the past and choose feasible solutions to meet the industry’s challenges.
Though pandemics are volatile, and in the future, many more will come and hamper our lives, the current COVID-19 pandemic has forced insurance companies to revamp their strategies and approaches so that they can thrive even in this tough time.