Covid-19 pandemic to lead to greater demand for insurance

In India, health and general insurers have been rolling out focussed health covers against Covid-19 in recent weeks

The demand for insurance could see a significant rise with the government lockdown and coronavirus pandemic.

Analysts said past experience with Severe Acute Respiratory Syndrome (SARS) and Middle East Respiratory Syndrome (MERS) has indicated that demand for term and health insurance picks up during epidemics, while insurers are also reporting rise in queries for pandemic covers by businesses.

“Our study of insurers in China, Singapore, Saudi Arabia and South Korea during epidemics such as SARS (2002-03) and MERS (2013-14 and 2015) suggests that demand for term and health insurance picks up during epidemics even as savings policies may remain weak,” said Kotak Institutional Equities in a report, adding that while tepid capital markets are likely to bring down ULIP volumes in the new fiscal year, the Covid-19 pandemic will likely boost growth in term and health insurance in a relatively under-insured market.

In India, health and general insurers have been rolling out focused health covers against Covid-19 in recent weeks even as the insurance regulator has said that treatment for the infection will be covered under existing health insurance policies.

Meanwhile, many businesses too are understood to be making queries on pandemic insurance to cover business interruption loss.

Businesses in India largely don’t have a pandemic risk cover. Almost all clients have classic business interruption cover for when the property suffers a physical damage, which leads to a loss in business,” said Sanjay Kedia, Country Head and CEO of Marsh India, adding that there are special non-damage business interruption cover and infectious disease extension that can be added to an existing policy for such pandemic-related business losses.

“We are getting a lot of queries from the majority of our clients to understand these covers. No one is purchasing, but everyone wants to understand how it works,” Kedia told BusinessLine.

The national lockdown has led to most companies working from home and shutting down a large part of their operations.

Courtesy : thehindubusinessline.com

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