Restrictive insurance practices now a historic disservice

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The primary job of any insurance company is to pay claims. The fact cannot be emphasised enough at the time of crisis. Still, many cases have been reported where insurers are being accused of erecting purchase barriers on Covid specific policies. Restrictive practices have ranged from not offering these policies online to a reduction in commission for agents so that they don’t push these policies in the market.

One of the main reasons is the low pricing of these policies, as fewer claims were getting reported when they were launched last year. Since then, the number of cases has increased by leaps and bounds leaving insurers stumped out on the pricing of these policies. Moreover, the wide coverage and high claim ratio of these policies have put them in discomfort. According to estimates, the claim ratio in Covid Rakshak and Covid Kavach policy is as high as 300% to 90%, which is way higher compared to the claim ratio of comprehensive health insurance policies.

At the same time, one cannot ignore the fact that awareness for health insurance has increased leading to the high premium collection for insurers. Also, many patients have put off elective surgeries, the non-Covid claim ratio has been much lower than normal times. In addition, with lockdowns being implemented and restrictions on general mobility, motor insurance claims would have gone down substantially for insurers.

Going by the overall claim scenario, it is not fair on the part of insurance companies to deny people coverage at this time of need. During these extraordinary times when the world is going through a once-in-a-century crisis, insurers should not be restrictive in their operation and should lead by example by honouring the claims from patients and not shy away from issuing Covid specific policies. It would be a historic disservice to the people.