A COVID-19 hospital in Delhi (Image: REUTERS/Danish Siddiqui)
Claim settlements for COVID-19, especially with regard to hospitalisation, have been swift after regulatory advisories, said Insurance Regulatory and Development Authority of India (IRDAI) chairman Subhash C Khuntia.
Speaking at an event organised by the National Insurance Academy with Swiss Re on navigating uncertainty, the IRDAI chairman said that, so far, general insurers have settled 7,60,000 pandemic claims worth Rs 7,136 crore.
There were a number of complaints by health insurance customers in 2020 about the delay in claim payments and also about the dropping of many components from settlement in the final hospital bill.
IRDAI came to their rescue and advised insurers to focus on quick claims settlement and later redraft agreement with hospitals on the rates, he said.
Moneycontrol had reported earlier how IRDAI has told general insurers through their industry body, the General Insurance (GI) Council, that COVID-19 claims should not be delayed, even if hospitals are not following standard rates.
“We had asked insurers to be nimble in this and prioritise the claims and settle them, especially for including hospitalisation. There has been a good response," he added.
Standard rates are fixed rates set for COVID-19 treatment across India. However, as reported by Moneycontrol earlier, many hospitals have not been following this rate, leading to friction between insurers and medical institutions.
As far as the life insurance sector is concerned, COVID-19 death claims worth Rs 242 crore have been disbursed so far.
Technology to be game-changer
Khuntia said that the claims settlement process was also aided by technology-led capabilities.
“Going forward, Internet-of-Things (IoT) will transform the insurance industry. For instance, cars are being connected to the internet through which driving behaviour and usage can be gauged. Insurers can do a risk estimation through this,” he added.
The IRDAI chairman also explained that technology-led innovation will be given priority.
“We are offering innovative mechanisms like the ‘sandbox’ to aid insurers test new products and technologies,” he said.
Under the sandbox method, entities can launch and test a product with a select group of people for six months, initially. This can be extended by another six months. After this, the regulator will look into the proposal and decide whether it can continue in the market or be discontinued.
In the first cohort, Khuntia said that there were 173 proposals, of which 67 were cleared in the insurance sandbox. He added that the second cohort had 185 proposals.
“Customer requirements are changing. We now have standard products across life and general insurance. Some feel that standardisation is against innovation. But these products are needed to cater to the common needs of the customer. These products won’t be frozen; we will keep innovating these products from time to time,” he said.
Wellness and insurance go hand-in-hand
Khuntia explained that apart from covering ailments, insurers should also help customers tackle their lifestyle illnesses through wellness programmes.
“If someone is diabetic, the insurer can provide tips on how to manage this disease. This initiative will be very beneficial for the customer," he added.
As an industry, he said that insurers must also move towards doing collective analysis so that risks can be analysed accurately. This means that technology and IoT, and artificial intelligence could be used to look at the past health data of a customer to predict their future risks/ailments.
“For each individual, the exact risk would be estimated to a large degree. That may result in some individuals becoming uninsurable. But insurers need to remember that customers should be responsible for only those risks that are under their control. For instance, someone with a genetic defect cannot be denied a cover because this is not under his/her control," he added.