Quick Response of General Insurance in Launching Products Related to Covid-19

The Covid-19 pandemic has swept the world for more than a year and a half. The economy is deteriorating, while people’s need for health insurance is increasing. Under such circumstances, it is necessary to strive for all things related to meeting the needs of the community to ensure that their health is maintained. This includes health insurance coverage, which is now increasingly needed by the community. It will be interesting to see how general insurance companies respond
to this pandemic by providing more comprehensive insurance cover for both health insurance and other products. 

The Indonesian General Insurance Association (AAUI) reported that in the January-March 2021 period, the general insurance industry recorded a premium income of Rp20.78 trillion. According to the Deputy Chairman of AAUI for Statistics, Research & Analysis, Trinita Situmeang, the premium income value grew by 1.5 percent (or Rp313.07 billion) compared to the same period in 2020 at Rp20.47 trillion.

Interestingly, the accident & health business line (accidents and health) occupies the fourth position of the largest premium contributor in this period. During the Covid-19 pandemic which has lasted a year, as of March 2021, the premium income for the accident & health business line increased by 5.7 percent, from Rp2.62 trillion in the first quarter of 2020 to Rp2.77 trillion in the first quarter of 2021, Trinita of the AAUI said at an online press conference on May 31, 2021.

Meanwhile, the value of claims paid by general insurance for the January-March 2021 period was recorded at Rp6.73 trillion or negative growth of -27.4 percent (Rp2.54 trillion) compared to the value of claims paid in the same period in 2020 in the amount of Rp 9.27 trillion. Claims paid for the accident & health business line contributed to the decline in this period, falling 29.3 percent from Rp1.49 trillion in the first quarter of 2020 to Rp1.05 trillion in the first quarter of 2021.

On the same occasion, the Executive Director of AAUI, Dody AS Dalimunthe, admitted that the health insurance business line has been affected by the pandemic. The preference of the public is to avoid large costs, while this pandemic will have an impact on households and corporations or their employees, namely being more careful about health.

“Therefore, in this condition, the demand for health insurance is indeed rising. This is also shown by many insurance companies, both life and general insurances, that have issued insurance products to accommodate the risks related to the Covid-19 pandemic,” said Dody.

One of the general insurance companies that responds to people’s demand for health insurance, especially to cover Covid-19 risk, is PT Asuransi Maximus Graha Persada Tbk (Maximus Insurance). President Director of Maximus Insurance, Jemmy Atmadja, said that the company responded to the Covid-19 pandemic by launching a special Covid-19 insurance product, called Bantu Untuk Negara Kuat Menghadapi Covid-19 (BUNKcovid), which is marketed online.

Jemmy explained that BUNKcovid is a special Covid-19 health insurance product that provides compensation benefits of up to Rp60 million for customers who are diagnosed positive and died due to the Covid-19 virus, with affordable premiums. According to Jemmy, BUNKcovid product is offered based on the company’s full commitment to providing protection for the community. Maximus Insurance understands the importance of providing maximum protection for the community in order to face these difficult times.

“This product can be accessed through our website, therefore, transactions can be done easily from home. In order to facilitate the purchase transaction of BUNK covid product, the company is collaborating with Bigpool, an IT company based in Singapore to provide a system that helps the customer to easily carry out transactions online,” he told Achmad Aris from Media Asuransi.

Although it has not become the main business in 2020, Jemmy admitted that the health insurance business has shown better underwriting performance compared to the year before the pandemic. In fact, claims for health insurance products offered by Maximus Insurance have decreased by around 34 percent compared to claims before the pandemic. “With the support of prudent underwriting process, the best service, the support of qualified human resources, and reliable technology, we see the health insurance sector still has a good opportunity for further development in the future,” he explained.

Meanwhile, Dody AS Dalimunthe explained that the current demand of the community related to this pandemic can be seen in the rising health insurance premium income. However, on the other hand, people are careful enough not to get sick, because if they are sick and have to go to the hospital, there is concern
that the customer will be mistakenly treated for Covid-19. “That’s why people tend to be careful and try not to get sick. Even if they are sick, they won’t go to the hospital to get medical treatment. Therefore, health insurance claims tend to decrease,” he said.

Trinita Situmeang of AAUI added that in the general insurance industry, there has been no specific report of health insurance claims related to Covid-19. “So far, the information related to Covid-19 claims is based on the records made by colleagues in the life insurance industry. For general insurance, we haven’t received such claims yet. However, it (Covid-19 claim) is indeed allocated in the payment of claims in the personal accident & health insurance business line or accident and health insurance,” Trinita said.

Meanwhile, regarding health insurance products that cover Covid-19, the Head of Statistics Department of AAUI, Esti Handayani, admitted that such product is still limited. “In general, such product is still relatively limited in general insurance compared to the life insurance industry, in terms of providing full coverage for health insurance. However, indeed some insurance companies have tried to create products, in the form of allowances, if the policyholder is indeed positive for Covid-19 and has to be admitted to the hospital with certain criteria, then some kind of compensation is given. The type of compensation is completely different from that of life insurance, which can be in the form of full coverage,” she said.

Esti Handayani added that the insurance products related to Covid-19 which are already growing in the general insurance industry are mostly products related to
travel. “Currently, there are several insurance companies that provide insurance cover for cancellation of travel due to the Covid-19. However, as for health insurance that provides coverage for Covid-19, it seems that general insurances are still careful in providing such insurance product,” she noted.

In the general insurance industry, the need for hospital care can not only be met with health insurance. There is a time a customer needs medical treatment when the customer is out of town or abroad. This happens when the customer is on a business trip during the Covid-19 pandemic.

In response to this need, PT Asuransi Sinar Mas launched a Covid-19 additional cover for Simas Travel product in November 2020. Indeed, the Covid-19 pandemic has forced several countries to close their borders, only allowing the entry of foreign nationals for business or personal purposes deemed urgent. Some countries even require additional insurance requirements to cover risks due to Covid-19. “We have prepared the expansion of the Covid-19 insurance over for Simas Travel product for customers who have to make business trips or other urgent trips both for the domestic trip and abroad,” said Sinar Mas Insurance Director, Dumasi MM Samosir, in November 2020.

Simas Travel is a travel insurance product called Asuransi Sinar Mas that provides protection when traveling, both business trips and tourist trips. There are two types of insurance products that people can choose depending on their needs, namely Simas Travel Overseas and Simas Travel Domestic.

“The Covid-19 insurance cover expansion will cover the costs of medical treatment due to Covid-19 during the trip. With this additional guarantee, we hope to serve the needs of customers, especially for those who are required to travel to countries that require insurance coverage for risks due to Covid-19,” said Dumasi.

The steps undertaken by Sinar Mas Insurance by providing insurance cover related to the Covid-19 pandemic in travel insurance products as well as the steps undertaken by Maximus Insurance in launching Covid-19 special health insurance product shows the general insurance industry’s quick response to this pandemic. In addition, this step also shows that in any situation and condition, there are opportunities that can be used to generate premium income.