Pandemics can be shortlived but their economic impact can be everlasting.
Since the onset of the pandemic, there is one sector that is at a very uncertain level. This is the insurance service providers who have now started covering the medical expenses and treatment for the coronavirus in their policies. businesses have gone down, they have crashed but this extraordinary situation has not come up for any other business where their expenses have gone up by tenfold.
The insurance regulatory and development authority of India has issued guidelines for meeting the health insurance requirements of various sections and has advised the companies to design products covering the cost of treatment of the virus.
It was stated that there would be a 13% growth for non-life insurance in 2020. This included insurance of the vehicles and other commodities. But this has reduced considerably because people do not have enough savings to spend on all these fancy commodities let alone get them insured.
With the pandemic coming up, people were starting to understand the importance of healthcare and life. This pandemic has created uncertainty in the minds of people regarding the healthcare system. The customers in the Indian market will benefit from this pandemic in such a way that they would now think about going for insurance is to safeguard their life.
Fresh savings businesses were converted into insurance businesses earlier because there was a lot of money into this sector. People just had to drive up their sales and the rest was being done by the consumers. but now, the situation is not so promising and inviting. People have to assess the market and create a niche for themselves. Distinctions must be made about this sector and they should be studied individually.
The insurance companies are taking a huge dip right now because of the new policies with regard to their functioning given out by the government. They need to communicate these changes to support patients, clarify the focus on health and well-being, and then explain the changes in policies for improved monetary assistance. The insurance companies can take this in a positive way and publicize this move. They can also offer telemedicine and preventive healthcare to facilitate digital India. Digitization is the need of the hour and the only way to move forward. companies need to increase their spending on public relations and branding.
Insurance companies can also fully digitize themselves because now they cannot send people out for sales. They can start chatbots on their website and have an interactive voice response system to reduce the impact of the coronavirus. excessive field trips can be avoided and rather than sending people out, they can use this money for AI and technological advancement. The migration of customers to digital is expected to see a significant jump in the immediate future and with the increased number of digital payments, use of smartphones and virtual reality, this sector will only flourish if it undergoes massive changes.
It is very true that people will now start investing in an insurance policy because people who have insurance claims are preferred over the general public. But it is also true that this will be done by only the cream of the population. People who do not have the money or have used up their savings, will not really look for insurance packages. They would rather survive in the present.
New India Assurance and United India Insurance are one of the top 10 general insurers in the country. These are mainly from the private sector. They have been badly hit by the slowdown. But it is also a very surprising part that the NIA has been able to grow its monthly premium by 7%. The company spokesperson has said that this might be due to the increased spending in digital marketing. The loss of premium in the motor segment was compensated by the health and property segment. If one sector in the insurance industry is not doing well, it is important to know that the other sector is doing well. The top companies are just saying that they have seen a de-growth in motor and travel but they have managed to retain the growth and health and property portfolio.
Bajaj Allianz General insurance showed a growth of 21% after having a large number of profits in February. The general insurance industry has seen a slowdown but it is true that people will never stop insuring dear good because of the Indian mentality.
Edelweiss Gallagher, an insurance broker, collaborated with four leading general insurance companies and assisted over 50 corporates to protect their workforce and restart operations, by incentivizing workers to return from their villages and rejoin work.
Right after the Global Financial Meltdown of 2008, insurance written for life, healthcare, and personal accidents began to dip immediately in US, UK, and Spain, with a lag in Germany. Will this happen after COVID-19 pandemic too because leading economists have said that we are heading towards a worldwide depression?
It is said that the post-lockdown situation will be challenging for this industry as a lot of investment would be required in this field. Government investment is needed in the sector after knowing the current state of the country. The Indian people who are opting for insurance could begin detailing a plan to reduce the expenses as it is said that digitization is the way to success.