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Even though the Insurance Regulatory and Development Authority of India (IRDAI) has made it mandatory for insurers to issue covid specific policies, several advisors complain that purchase barriers have been put by insurers in these policies discouraging buyers to opt for the policy.

One of the main obstacles is that these policies are not available online. In the absence of online policies, one has to visit the branch, which is difficult considering the ongoing pandemic situation in the country. There are also reports that agent commissions have been cut down to reduce sales. In such a case agents generally pitch for products with higher commission than selling Covid-specific policies.

According to Beshak.org, a consumer awareness platform, four insurers are selling Corona Kavach online. These are New India Assurance, United India Insurance, Aditya Birla Health Insurance and Raheja QBE.

One of the main reasons for insurers discouraging sales is the high claim ratio and low premium ratio in these policies. “Claim ratio in Covid Rakshak policy is as high as 300% while in Covid Kavach, it is around 90%. Pricing is the issue in these policies, as when these policies were launched last year there was no data,” said Suresh Mathur, executive director, health insurance, surveyors, IMF & Reinsurance, IRDAI during a recent webinar organized by Insurance Foundation of India in association with PHD Chamber of Commerce and Industry.

The claim ratio in these Covid-specific policies is very high compared to the claim ratio in individual policies (70%). In the group health insurance, where premium rates have always been lower because of cutthroat competition in the market, the claim ratio is 107-120% for public sector companies and 90% for private companies. The low premium in group health policies is often cross-subsidised by other types of insurance covers sold to the same organisation.