COVID-induced pandemic changed the world in more ways than one. As people came in terms with one of the biggest health disasters that the humanity has ever faced, it made them to think if their health insurance was enough to meet unforeseen challenges.
With the rapid spread of the latest Omicron subvariant of COVID-19 in some countries, it's again pertinent to see if the same will aggravate health insurance penetration in India.
As we understand, pandemic in India brought about the much desired perception change on health insurance as a need based security to manage any unforeseen hospitalization which could otherwise wipe of savings and even push individuals towards a credit support to manage expenses. This will further be accelerated, said Amjad Khan, Director Employee Benefit practice and International business at Anand Rathi Insurance Brokers Pvt. Ltd.
"In the COVID times every alternate family in the country did go through a real life example of what hospitalisation could be with the financial impact they endured during these testing times. In the world of scare and greed, COVID-19 has managed to push the narrative towards a more prudent thinking in terms of preparing for bad times and hence the penetration will get the desired push for health insurance solutions," Khan told CNBC-TV18.com.
“Though consumers might have to pay more premium; they can be rest assured that they will receive better benefits compared to regular plans," Indraneel Chatterjee, Co-Founder at RenewBuy said.
Will this increase premiums too?
Insurance
premiums are likely to increase, experts say. The revisions can predominantly be linked with medical inflation (in health insurance category) and overall economic condition of the country.
According to a recent report by Indian financial services company Motilal Oswal Financial Services Limited, medical inflation in India has continued to rise. The report noted that room rents have increased 3-4 percent over the past one year.
The health insurance market, meanwhile, has expanded significantly since 2020, which presents an opportunity for the insurance industry. During the peak COVID-19 period (2021-22), premiums for health insurance in India had already increased by 25 percent compared to the pre-pandemic level.
"Insurers in India during the pandemic have settled more than 25,000 crore in hospitalisation claims and thus the impact on the underwriting margins got further stressed which anyways was in a bad shape. With medical inflation being at its peak, the hospitalisation costs have gone up compared to the pre covid era. This phenomena will definitely propel price correction and we will see premium hikes but with much wider and new coverages being introduced in the coming times," Khan told CNBC-TV18.com.
(Edited by : C H Unnikrishnan)
