Employers, states can take trust route to compensate against Covid-19 deaths

MUMBAI: Last month even as the country went into lockdown, New India Assurance, the largest insurance company, launched a personal accident policy to compensate families of 22.12 lakh people who put themselves at risk in the battle against the coronavirus. In an interview to TOI, Atul Sahai, chairman, New India speaks of the challenges of providing insurance during an outbreak when there is no visibility on how things will turn out.

Many industries are seeking Covid-19 covers for their workers similar to the cover you provided to the government for 22 lakh healthcare workers. Are you issuing more such covers?

We have got several requests. Every insurance company has a limit to the capacity it will take on its net account. A company can take on Rs 1,000-Rs 2,000 crore (sum insured) on its net account but you cannot take a bigger exposure than that in the absence of reinsurance. Reinsurers are based in London, Germany and Singapore and these markets are hit hard by Covid-19 which is probably also making them circumspect. There is no data and pricing is based on assumptions. Even if reinsurers agree the quotes will be very high.

What is the option for employers?

Given that insurers will be adding the cost of administration and reinsurance it might be more profitable for those seeking cover to set up a trust fund to provide compensation to employees. We have provided this cover for three months where we do not expect claims to be very high. We hope things will be better thereafter. No one knows yet how things will be. This is a life product and reinsurers are not coming forward to cover this product. Some life companies have moved the regulator for products.

What are the insurance covers available for Covid-19?

Covid-19 treatment within existing medical policies is already covered. State governments are covering it under Ayushman Bharat insurance or though the trust model. State governments are also looking at the trust route for services like police and sanitation workers.

What kind of Covid-19 claims are you seeing in health?

Until Monday we had 50 claims under health insurance. Out of these 48 are settled from the patient’s perspective as they are approved for cashless treatment. Two are not yet approved as they have sought reimbursement option and are still hospitalised. There is a need for private hospitals to be ethical on the billing given that there is no established protocol.

How are the claims for healthcare workers going to be processed considering that it is not a `named' policy?

There is a standard operating procedure. The District Collector and secretary health certify that the individual has died because of Covid-19 contracted in service. It is not just doctors and government workers it can be Asha workers or private hospitals taken over by the government. Anyone called for this duty by the government can be covered.

How are you servicing claims during the lockdown?

Claim servicing is difficult but as far as existing claims are concerned we are moving on and exchanging documents electronically. If a claim comes up to head office claims committee, we hold electronic meetings. We have settled several claims this way. Also, our offices are operational. Now the problem is when it comes to documentation.

What has been the impact of Covid-19 on business? Will there be a reduction in premium for the layoff period.

Although our growth is more than the market, the motor business is down by 50% in April. There are no walk-in customers, there are no new sales.

Will there be any reduction in premium because of lockdown?

In property insurance, there is a category of cover called silent risks where rates are cheaper. But most of the industries do not opt for that as they do not want to take the risk.

Source: The Times of India