India’s health insurers are silently pulling back from issuing short-term Covid-19 hospitalisation covers after thousands of crores of rupees in treatment claims through the second viral wave put a question mark on their profitability and solvency, according to The Economic Times.
Sector regulator Irda had made it mandatory for all general and health insurers to sell and renew ‘Corona Kavach’ to enable interim access to hospitalisation benefits for millions of uninsured Indian households and blue-collar frontline workers who couldn’t afford more comprehensive long-term health policies. In March, the regulator extended the validity of these covers till September 30, 2021.
“Insurers priced these policies when there were only about 30,000 daily cases in the country. Now, all large states are reporting these figures,” said a source at a top insurance brokerage. “It has proven to be a loss-making product for all insurers. There is no incentive to scale this. If given the option, companies would stop it altogether.”
So, what are the latest purchase barriers? Brokerages say that many insurers have stopped offering the Corona Kavach policies online, cut down on agent commissions to discourage sales, and raised premium tariffs. Executives at individual insurers and the regulator couldn’t be reached immediately.
The withdrawal of online policy sales means that prospective policyholders must visit branches where they must sign extensive self-declaration forms to be eligible to buy these plans.
According to a survey conducted by consumer awareness platform Beshak.org, as of last week, only four insurers are allowing online sales of Corona Kavach. These are New India Assurance, United India Insurance, Aditya Birla Health Insurance and Raheja QBE.