Weekly Insurance Round-up Tuesday, October 12, 2021
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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 from our in-house research team.
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✴️ The urgent need to improve insurance access for mental healthcare 🧠
✴️ IRDAI sets up a panel to review regulations governing actuaries. 📃
✴️ MaxLife and Vymo collaborate to launch ‘mSmart’. 🤝
✴️ Insurtech startup Gram cover raised $7 Mn. 💰
✴️ Insurtech Startup Pazcare Raises Funds From BEENEXT, 3one4 Capital. 🤑
- While it’s been over a year since IRDAI made it mandatory for health insurers to include mental health treatment under the scope of coverage, insurers still hesitate to cover mental illness due to a lot of unknown risks. Even Ayushman Bharat, the central governments’ health insurance scheme, does not cover mental illness treatment at private hospitals.
- According to psychiatrists, 50-75% of hospitalization claims filed for insurance coverage were found to be rejected - meaning, families had to bear these costs by themselves despite having health insurance. And, since getting a claim paid is so rare, patients turn to government hospitals for treatments, where the cost is low - but the quality of care is poor too!
- Further, while there are insurers who specifically mention that their policies cover mental illnesses, they put several restrictions like -
- Sub-limits: Insurers like Bajaj Allianz and GoDigit specifically write that they cover mental illnesses, but have introduced certain sub-limits. For example - A psychiatric illness will be covered only up to INR 50000 for an INR 5 Lakhs cover. This was contested in court by a claimant in April this year, and the court ruled that the insurers cannot discriminate between physical illness and mental illness while providing cover - and no limits can be imposed.
- List of illnesses: Some insurers have a specific list of psychiatric illnesses they will cover. New India’s mediclaim policy covers only 4 types of mental illnesses with a sub-limit of 25% of the sum insured.
- Waiting Period: A few insurers apply a forced waiting period of 3 to 4 years for mental health conditions. Meaning, customers won’t be able to make any mental illness-related claim for the initial 3 to 4 years.
- Insurers are aware that mental health treatments are at a very nascent stage in India, and the definitions and treatment protocols are not fully standardized. As a result, they make certain choices to protect themselves from losses, by not covering mental illness. At the end of the day, they too are for-profit companies and need to deliver sustainable returns to their shareholders.
- In fact, insurers impose stricter underwriting rules on customers declaring pre-existing mental conditions, as they are considered higher risks to cover.
- On the other hand, most patients and their families still remain unaware that mental illness is mandated to be covered by all health insurance plans. Believing that their claim would anyway be rejected, they refrain from making a claim altogether!
- Beshak Take -
- Most insurance companies have not mentioned mental health coverage criteria clearly in the benefits section of their policy wordings. While they removed mental illness from their list of permanent exclusions after IRDAI made it mandatory to cover mental illness, they did not specifically mention that the conditions are covered, creating a lot of confusion among the policyholders.
- Further - We need to break the stigma associated with mental health in general and discuss scientific and pragmatic solutions to help those in need, by any means necessary. Only by normalizing mental illnesses as health conditions, much similar to physical health - will we open up channels for better healthcare practices and insurance cover mandates.
Source: Economic Times
- IRDA has set up a committee to review the IRDAI (Appointed Actuary) Regulations, 2017 to match the system according to the changing business dynamics.
- IRDAI felt a need to review these regulations because of the changes like digital transformations, frequent changes in premiums, etc., over the past few years.
- According to them, actuaries play a very important part in the functioning of an insurance company. They compile and analyze statistics and use them to calculate insurance risks and the necessary premiums that should be charged to compensate for the possible claims.
- They actually help insurers estimate how risk is going to change in the future, and how they can underwrite policies so they offer to cover these risks effectively - while still remaining profitable.
- This committee will help insurance companies in India combat these complex, unpredictable times through their -
- Study of global practices of the appointed actuaries concerning their duties, functions, and eligibility conditions.
- Review of the current provisions of IRDAI (Appointed Actuary) Regulations, 2017.
- Suggestions for changes based on the evolving business environment.
- The committee will have to submit its report within 45 days and can invite external experts for discussions as required.
- Max Life has partnered with Vymo, a sales acceleration platform for financial institutions, to improve its agency distribution efficiency and launch a mobile app named ‘mSmart’ to digitally keep a track of its agency distribution channel.
- With this mobile application, the Office Heads & Agency Development Managers of Max Life will be able to oversee their day-to-day business planning and activities.
- Users of the app, ie., financial advisors and institutions won’t have to manually update their system daily as ‘mSmart’ will be capturing the daily sales and activities of the users automatically.
- The app will help the managers with end-to-end visibility on their team’s performance in real-time.
- The intelligent dashboards will help Max Life spot certain engagement behaviors that may affect sales performance which in turn can improve sales productivity.
- Vymo currently works with many domestic insurers like Aegon, Future Generali, SBI Life insurance, Apollo Munich, etc., and globally with AIA, AXA, Berkshire, Sunlife, etc.
Source: The Week
- In a series A fundraise, Gram Cover, a rural insurtech startup, raised $7 Mn.
- Gram Cover, a composite broker, provides both insurance and reinsurance services, designs and distributes products suitable for rural India.
- With this investment, the startup will strengthen its technology and product offerings and increase the availability of insurance products and services on its partner applications.
- They also aim to insure more than 10 Mn farmers in the next 2-3 years by expanding their business to states including Bihar, West Bengal, Assam, Uttarakhand, Andhra Pradesh, Maharashtra.
- Pazcare, a Bengaluru-based insurtech startup, raised $3.5 Mn as a part of its seed round, led by BEENEXT.
- 3one4 Capital and angel investors including Kunal Shah (CRED), Ashneer Grover (BharatPe), Aprameya R (Koo), Zishaan Hayath (Toppr), and existing investors Ashish Hemrajani (BookMyShow) and Haresh Chawla (True North) also participated in the seed round.
- Pazcare is an employee-benefits and health insurtech platform that helps employers design, administer, and manage the right employee benefits program for their employees.
- The startup will use the raised funds for product development and recruitment.
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