Archana Anoor Member AGPEC IAI COVID health product Challenges Pricing and Marketing Guide Gopal V Kumar Presented By 1 Phani Kandala 2 Mohit Arora ID: 1048007
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1. Opening Remarkswww.actuariesindia.orgArchana Anoor Member, AGPEC, IAI
2. COVID health product – Challenges, Pricing and MarketingGuide : Gopal V KumarPresented By : 1. Phani Kandala2. Mohit Arora3. Shruti Shirhatti4. Twinkle Agarwal 34th India Fellowship WebinarDate:29th January 2021
3. www.actuariesindia.orgProblem statement3
4. Agenda4www.actuariesindia.org
5. www.actuariesindia.orgSECTIONChallenges, Risks and Assumptions34th IFS015
6. www.actuariesindia.orgKey Challenges – different stakeholders6
7. www.actuariesindia.orgKey Challenges – different stakeholders7
8. www.actuariesindia.orgKey Challenges – different stakeholders8
9. www.actuariesindia.orgAssumption9
10. www.actuariesindia.org10
11. Proportion of Policyholders to get COVIDwww.actuariesindia.orgHealthy state age, xInfectious state, x, duration d Dead Dead11
12. www.actuariesindia.orgH(t) healthy at time I(t,d) time and duration infected, dD(t) dead at time t.r(t) basic rate of infection time t per day.j(d) relative infectiousness of infected at duration dProportion of Policyholders to get COVIDm(d) mortality rate for infected at duration d per dayf(t) fraction of infection who are recorded as new cases at duration day K (e.g. 6)New cases recorded day t: NCR(t) = f(t).I(t,k)12
13. www.actuariesindia.orgProportion of Policyholders to get COVID13
14. Given COVID is contracted – Number of Hospitalization caseswww.actuariesindia.orgRecoveredIntensive Care UnitMore SevereSevereLowQuarantinedHospitalizedNo ICUInfectious14
15. www.actuariesindia.orgGiven COVID is contracted – Number of Hospitalization cases15
16. Given COVID is contracted – Number of Hospitalization cases (as at November 2020)www.actuariesindia.org16https://indianexpress.com/article/business/economy/insurers-receive-covid-claims-worth-rs-7700-cr-premiums-jump-up-to-100-7001708/
17. Expected Claims Cost relative to Normal Health Claimswww.actuariesindia.org17
18. Loss Ratios of Health Insurance in India – Pre-COVID 19 Scenariowww.actuariesindia.orgClass of BusinessFY 12FY 13FY 14FY 15FY 16FY 17FY 18FY 19Govt. Business90%87%93%108%109%122%115%113%Group Business100%104%110%116%120%125%107%102%Individual Business85%83%83%81%77%76%71%72%Industry94%94%97%101%102%106%94%91%SectorFY 12FY 13FY 14FY 15FY 16FY 17FY 18FY 19Public sector 101%103%106%112%117%122%108%105%Private Sector78%78%87%84%81%84%80%84%Stand-alone 60%61%67%63%58%58%62%63%Industry93%95%97%101%102%106%94%91%Source: Annual Reports, IRDAI SCENARIO0118
19. Impact of Health Claims – COVID 19 (Example of AB scheme)www.actuariesindia.orgSource: Webinar on Ayushman Bharat Health Insurance Scheme, Institute of Actuaries of India, July 24, 202019
20. Expected Claims Cost - Summarywww.actuariesindia.org3https://www.asiainsurancereview.com/News/View-NewsLetter-Article/id/74016/type/eDaily/India-Health-portfolio-loss-ratio-could-increase-by-10-SCENARIO0220
21. Special Risks that need considerationwww.actuariesindia.org21
22. Special Risks that need considerationwww.actuariesindia.org22
23. www.actuariesindia.orgSECTIONSales34th IFS0223
24. www.actuariesindia.orgMainstream product or special purpose product24
25. www.actuariesindia.orgMainstream product or special purpose product25
26. www.actuariesindia.orgMainstream product or special purpose product26
27. www.actuariesindia.orgMainstream product or special purpose product27
28. www.actuariesindia.orgMainstream product or special purpose product28
29. www.actuariesindia.orgMainstream product or special purpose product29
30. www.actuariesindia.orgSECTIONFamily Floater34th IFS0330
31. www.actuariesindia.orgCoverage and Benefits of Family Floater31
32. www.actuariesindia.orgIRDAI REGULATIONS relating to Protection of Policyholder’s interestsWhether to Offer Family Floater for Special purpose COVID Product?32*Calculated based on Report by GI Council-Proposed charges for COVID CASESArticle by Hindustan Times- https://www.hindustantimes.com/india-news/what-does-it-cost-to-treat-a-coronavirus-patient-here-s-a-break-up/story-qwOzwoaJKj39AAxb2U58oO.html
33. www.actuariesindia.orgAlgebraic Formula for claims savings due to Family Floater capFamily floater premium, where family floater discount is as : No. of membersFamily Floater discount*2 members15%3 members20%4+ members25%33*Discounts are estimates based on expected savings in issuance expenses and operational costs
34. www.actuariesindia.orgAlgebraic Formula for claims savings due to Family Floater capIllustrationFor sum insured for 5 lakhs covering 4 members:Age of memberPremium657660607660353419303419Total premium22,158Floater Discount % based on 4 members25%Premium according to formula22,158*(1-25%)Floater Premium charged16,61934
35. www.actuariesindia.orgComparison of Favorable selection by families in COVID V/S Mainstream productBased on this comparison, the factors of being contagious and risk of anti-selection in COVID product, we think that the impact of favorable selection by families will be more for COVID product35
36. www.actuariesindia.orgFloater discount low for COVID product36
37. www.actuariesindia.orgSummary37
38. www.actuariesindia.orgTHANK YOU38
39. Wrap Up……Additional SessionsFeedback www.actuariesindia.org