The recently-launched standalone health covers against Covid-19 have seen a tremendous response from customers but reinsurance support continues to be a challenge for most insurers.
“There is no reinsurance support for the product across the industry. It is completely dependent on the insurer’s discretion and risk profile,” said an executive with a private sector general insurance company, but said that a lot of people have purchased the policies.
Another insurer added that they are in discussions with reinsurers for possible support but it has been difficult till now, which in turn has impacted pricing for many firms.
“Overall, health is retail business without much reinsurance support. The same goes for the Covid-19 covers launched,” noted an executive with a reinsurance firm.
To make treatment for Covid-19 more affordable for people, the Insurance Regulatory and Development Authority of India (IRDAI) had asked insurers to come out with two standard health insurance products, which were launched on July 10. The Corona Kavach is an indemnity product while the Corona Rakshak is a benefit policy.
“There is not much reinsurance available for health insurance. It is mostly written on retention basis so reinsurance industry is also trying to understand the experience on health insurance,” said PC Kandpal, Managing Director and CEO, SBI General Insurance, but stressed that it has not proved to be a disincentive for insurers from offering health insurance products.
He said the response to the two policies has been positive. The SBI General Insurance is also waiting for these to be made available on group platforms for a larger audience.
S Prakash, Managing Director, Star Health and Allied Insurance, however, added that reinsurance support is available for both the policies. “Reinsurance support is available for Covid-19 policies; it depends on how the insurers are placed in pricing and servicing the policy,” he noted.
Star Health and Allied Insurance has sold over 1.5 lakh Corona Kavach policies and nearly 25,000 Corona Rakshak policies.