Weekly Insurance Round-up Tuesday, January 11, 2022
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We're back with the latest edition of Beshak's Weekly News Round-up 🗞️ - an analysis of all Insurance News & Updates, straight from our in-house research team! 🧐
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- Looking at the growing number of cases of Omicron, IRDAI, on 3rd January 2022, announced that health insurance policies issued by all general and health insurers that cover treatment costs of Covid-19 will also cover treatment costs of Omicron.
- IRDAI has urged insurers to have effective coordination mechanisms set up with their network providers and hospitals to make the cashless claim facilities seamless and provide faster services to policyholders if they undergo hospitalization.
- The regulator has also asked the hospitals to adhere to the Service Level Agreements (SLA) that are committed to insurance companies to provide cashless facilities to the policyholders.
- On 1st April 2020, a press release by IRDAI had made it clear that Covid-19 hospitalization treatment costs will be covered by all indemnity-based health insurance products that are offered by all general and health insurers.
- As per the Ministry of Health and Family welfare data, a total of 4033 cases of Omicron and 7,23,619 cases of Covid-19 have been detected across the country as of 10th January 2022.
Source: The Economics Times
- As per the India Consumer Spending Outlook–2022 report by LocalCircles (a community social media platform), Indian families are expected to spend less and save more in 2022.
- The survey was conducted with a sample size of 47,000 households across 391 districts in the country. Out of this, 63% of participants were male and 37% were female. 47% of the participants were from Tier I cities and metros, 33% were from Tier-II towns, and the rest 20% were from Tier III, IV, and rural areas.
- The results of the survey indicate that 41% of Indian households are likely to invest in equity and mutual funds, 4% are likely to spend on gold, 22% are likely to invest in bank fixed deposits, 28% of the respondents said they don’t plan to make any investments and remaining 5% couldn’t say.
- The pandemic has led more people to be wise about their finances. Indian households have understood the importance of savings rather than spending on non-essentials.
- The main objective of the study was to understand the sentiments of Indian consumers on purchasing residential units, vehicles, health insurance, jewelry, equities, and mutual funds in 2022.
- As per the findings of the survey, in 2022 -
- One in seven families is expected to spend on residential property.
- Two out of five families are expected to invest in equities or mutual funds.
- One in seven families were expected to spend on gold, diamond, silver, or other types of jewelry
- One out of six families may increase their health insurance coverage.
- Beshak Take: The pandemic has changed the mindsets of people drastically and this survey is proof of that. More and more people are now thinking of saving more and spending less.
- The survey has also brought to light the need to create more awareness about health insurance and its benefits. Because as important as it is to have an ample amount of savings for the future, it is equally necessary to have an insurance cover that will indemnify any hospitalization expenses that may arise in the future, without burning a hole in one’s pocket.
- Due to the increase in awareness about insurance in the pandemic, a lot of people started purchasing insurance. There was a spike in the death ratio, too, during the first and second waves of Covid-19.
- This led to the reinsurers increasing their costs. Earlier, the reinsurers had asked all insurers to tighten their underwriting rules.
- As a result, all private insurers are set to increase their term insurance premium rates. LIC is the only company that has not increased its premiums for the third consecutive year.
- The increase in premium across various insurers and segments will range from 10-30%. Here’s a snapshot of the percentage increase in term plans across various insurers:
|Insurance Company||% Increase in Premium|
|Bajaj Allianz Life Insurance||15%|
|ICICI Prudential Life||10%-15%|
|TATA AIA Life||25%-30%|
- Kotak Life Insurance will also be increasing its premiums. They, however, have not disclosed the quantum of the hike they are planning to make.
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