Month: December 2020

Health insurance industry: An overview of 2020 and outlook for 2021

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Authored by Ajay Shah

Given that the country’s individual health insurance penetration is only around 3 percent, COVID-19 helped health insurance become a priority for the common man. The surge in these policies began in end-April and the beginning of May 2020, fuelled by rising COVID-19 cases.

Coverage Gains Momentum

The rise in the cover amount was mainly propelled by the realization that the cost of treating COVID-19 could be extremely high. The directive from IRDAI (Insurance Regulatory and Development Authority of India) for insurers to mandatorily provide a standard coverage for COVID-19 through Corona Kavach and Corona Rakshak policies also helped their cause.

Given the urgency of Covid 19, these products addressed the immediate need of the consumers. However, buying a comprehensive cover remains a smart choice because it provides wider coverage against diseases or accidents and not just Covid-19. Further, comprehensive policies see better renewals for long term coverage and hence lesser incidence of dropouts.

The General Insurance Council’s data reveals that in July, health insurance premiums accounted for 32.7 percent of the general insurance market. Thanks to these tailwinds, research reveals that in the months ahead, health insurance will keep picking up due to pandemic pressures on the public.

The pandemic also had significant impact on the sector’s way of operating. Health Insurance organizations were quick to move to technology-enabled servicing solutions that on the overall were beneficial for customers as they could avail services from the comfort of their home.

With consistent investment in technology, the presence of adequate security protocols etc. organizations could empower their employees to operate and manage company’s data seamlessly in a work-from-home environment. All departments like underwriting, operations, claims and customer-service were rendered fully functional on an almost immediate basis.

In addition, having clear business continuity plans ensured employees were aware of the immediate steps they had to adopt in the given situation and this led to a smooth transition across teams. Since physical meetings and interactions were not possible or restricted; digital platforms helped in keeping communication channels open.

Meanwhile, despite the arrival of vaccines, apprehensions of contracting COVID-19 will continue nudging people towards health insurance in 2021 too. The health insurance penetration rate that was slow paced for years is expected to gain further momentum in 2021.

A noticeable trend concerns people taking the trouble of learning more about insurance policies and evaluating the options to ensure they get more value for their money.

Evolving Trends

Lockdown restrictions meant facilitating medical examinations was no longer easy or possible in many cases. To overcome the barrier, insurers began issuing policies through Tele-MER – recorded phone interviews conducted by proposers in gathering risk-related data and the medical history of applicants.

Another interesting trend was the change in the attitude of millennials towards health insurance. This segment was reluctant to put down money for health insurance, believing they did not require it since they were young and healthy. But as coronavirus began infecting both old and young, almost overnight, millennials realised that health insurance was a necessity even for them. Within weeks after the outbreak, millennials began buying health insurance. Their motive was twofold – to protect their financial stability if they required expensive hospitalisation and ensure economic security for families in case of an unwanted eventuality.

Although the majority of working millennials have a corporate health insurance cover provided by their employers, it is often inadequate in covering the entire family. This is particularly true because of rising healthcare costs and the growing number of infectious diseases. The other advantage of these first-time insurance purchasers – a significant section prefers comprehensive health insurance coverage; a prudent purchase by all accounts.

In 2021 too, the health insurance industry expects the tailwinds from the pandemic to sustain the shift towards greater penetration among untapped segments. Simultaneously, data-driven innovations and digital tools like AI, IoT, RPA (robotic process automation), machine learning and blockchain, among others, will help in speeding up administrative tasks such as underwriting, processing of claims and managing customer queries. All of which are expected to facilitate faster growth, benefitting both health insurers and the insured.

Ajay Shah is Director and Head – Retail Sales at Care Health Insurance
(Formerly Religare Health Insurance). Views are personal

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Fiscal deficit touches 135.1% of FY21 target at November-end

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Union government’s fiscal deficit soared to Rs 10.75 lakh crore, or 135.1 percent of the 2020-21 Budget Estimates (BE), at the end of November 2020, mainly on account of low realization of revenue due to disruption in business activities amid the coronavirus pandemic.

The fiscal deficit at the end of November 2019 had stood at 114.8 percent of 2019-20 BE.

In absolute terms, the fiscal deficit stood at Rs 10,75,507 crore at the end of November 2020, according to the latest data released by the Controller General of Accounts (CGA). The lockdown imposed to curb the spread of coronavirus had significantly impacted business activities and, in turn, contributed to sluggish revenue realization.

The fiscal deficit, or gap between the expenditure and revenue, had breached the annual target in July this year. The government’s total receipts stood at Rs 8,30,851 crore (37 percent of BE 2020-21) till the end of November 2020.

This included Rs 6,88,430 crore tax revenue (net to centre), Rs 1,24,280 crore of non-tax revenue and Rs 18,141 crore of non-debt capital receipts. Non-debt capital receipts consist of recovery of loans and disinvestment proceeds.

The tax revenue collection was 42.1 percent of BE of 2020-21, compared with 45.5 percent of BE (2019-20) during the corresponding period a year ago. Non-tax revenue was 32.3 percent of BE.

During the corresponding period of the last fiscal, it was 74.3 percent of BE 2019-20. During the corresponding period last fiscal, the total receipts were 48.6 percent of 2019-20 BE.

According to the data, over Rs 3.34 lakh crore were transferred to state governments as devolution of share of taxes by the Government of India up to November 2020.

The CGA data said the total expenditure incurred by the government stood at Rs 19,06,358 crore or 63 percent of BE. Of the total expenditure, Rs 16,65,200 crore was on revenue account and Rs 2,41,158 crore on capital account.

It further said that out of the total revenue expenditure, over Rs 3.83 lakh crore was on account of interest payments and Rs 2,02,119 crore towards major subsidies.

For this financial year, the government had pegged the fiscal deficit at Rs 7.96 lakh crore or 3.5 percent of the GDP in the Union Budget, which was presented by Finance Minister Nirmala Sitharaman in February 2020.

These figures, however, may have to be revised significantly in view of the economic disruptions created by the coronavirus pandemic.

The fiscal deficit had soared to a seven-year high of 4.6 percent of the gross domestic product in 2019-20, mainly due to poor revenue realization.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

PPF, NSC and other small savings schemes interest rates remain unchanged for Q4

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Narendra Modi government on Thursday has kept the interest rates on small savings schemes, including PPF and NSC, unchanged for the January to March quarter.

The government said in a statement, “The rates of interest on various small savings schemes for the fourth quarter of 2020-21, starting from January 1 and ending March 31, 2021, shall remain unchanged from those notified for the third quarter (October to December).”

Public Provident Fund (PPF) and National Savings Certificate (NSC) will continue to carry an annual interest rate of 7.1 percent and 6.8 percent, respectively.

Interest rates for small savings schemes are notified by the Finance Ministry on a quarterly basis.

Accordingly, the interest rate for the five-year Senior Citizens Savings Scheme has been retained at 7.4 percent. The interest on the senior citizens” scheme is paid quarterly. Interest rate on savings deposits has been retained at 4 percent annually.

The girl child savings scheme Sukanya Samriddhi Yojana will offer 7.6 percent rate during the third quarter of the current fiscal.

The annual interest rate on Kisan Vikas Patra (KVP) has been retained at 6.9 percent.

Term deposits of 1-5 years will fetch an interest rate in the range of 5.5-6.7 per cent, to be paid quarterly, while the interest rate on five-year recurring deposit is pegged at 5.8 percent.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

39 Indian sailors are stuck in Chinese waters for months: Here’s why

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The chorus has grown stronger urging the Central government to bring back the 39 Indian sailors stuck in China as they were not allowed to unload their cargo by Chinese authorities.

Meanwhile,  the central government has maintained that the matter is being vigorously pursued by India.

“Given growing stress on crew members and our concern for increasingly difficult conditions for them, these two cases are being pursued vigorously,” a government statement said.

Bulk cargo vessel MV Jag Anand is on anchorage near Jingtang port in Hebei province of China since June 13. The vessel has 23 Indian sailors.

Another vessel MV Anastasia, with 16 crew members on board, is on anchorage near Caofeidian port since September 2020.

What Government Says

India has requested the Chinese authorities to allow both the cargo vessels to dock or/and change the crew.

External Affairs Ministry spokesperson Anurag Srivastava said that the Indian Embassy in Beijing has been in constant touch with provincial and central government authorities in China.

Srivastava said the talks are on between the two countries to resolve the issue and ameliorate the situation of the crew, adding that there is a considerable amount of stress on the crew members on account of this unprecedented situation.

China’s Stance

Chinese authorities have conveyed that crew change is not being permitted from the ports on account of coronavirus-related restrictions by the ports.

Chinese Foreign Ministry spokesman Wang Wenbin said China has stayed in close communication with India and is responding to their requests as well as providing necessary assistance for them,

Maintaining that Beijing has clear stipulations on quarantine measures, Chinese authorities said there was no “link” between the situation of Indian crew on two stranded ship and its strained relations with India.

The Backdrop

India and China are locked in a border standoff since May 2020 and have had several rounds of talks to resolve the conflict.

At least 20 Indian Army personnel were killed during a violent confrontation with Chinese troops in the Galwan Valley in June 2020.  The Chinese side had also suffered heavy casualties.

In the last round of talks held on December 18, both sides agreed to continue working towards ensuring disengagement of troops from all friction points along the Line of Actual Control (LAC) in Ladakh region.

India has maintained that it wants good relations with all the neighbours including China, but it cannot accept any unilateral change of the LAC.

Defence Minister Rajnath Singh said India has always in favour of peace and he hopes that the border conflict will be resolved through talks at the military and diplomatic levels.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Big Deal: Asia and India will be the focus of investment activity, says Zia Mody of AZB & Partners

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Pandemic might have hit the deal street hard initially, but the deal makers saw an opportunity in adversity leading to hectic action in the second half of 2020.

It almost seemed like a 20-20 match in the second half of the year when deal activity picked up catalysed by a gush of liquidity fuelling the equity markets and pandemic disruptions giving new opportunities in times of adversity.

The New Year brings in new avenues, which are opening up to tap global funds. So what is in store and what are the learnings from 2020? CNBC-TV8’s Nisha Poddar spoke to Zia Mody, Senior and Founding Partner at AZB & Partners.

Zia Mody said, “Earlier you saw only quality marquee houses who could attract money, I think there will be an expansion of that circle now simply because money has to flow into something and it can’t keep flowing into this same business and the same houses forever. Private equity will have to expand, banks will have to lend to more than AAA clients.”

She said, “Private equity is going to come back very strongly, it is simply because of the dry powder that they have with them and their global fundraising even in COVID times has gone extremely well. So Asia and India will certainly be a focus of investment activity.”

Watch this interview for more.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Health Ministry releases communication strategy to support COVID-19 vaccine rollout

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Union Health Ministry on Thursday released a communication strategy to support the COVID-19 vaccine rollout in India that seeks to disseminate accurate and transparent information by alleviating apprehensions and ensuring its acceptance.

The 88-page document details information to guide national, state, and district-level communication activities to enable information about COVID-19 vaccines and the vaccination process reaches all people, across all states in the country.

“The communication strategy that supports the rollout of the COVID-19 vaccine in India seeks to disseminate timely, accurate and transparent information about the vaccine(s) to alleviate apprehensions about the vaccine, ensure its acceptance and encourage uptake,” it said.

According to the document, the strategy aims at managing and mitigating any potential disappointment expressed by unmet demand for the vaccine or ‘eagerness’ amongst people and addressing vaccine ‘hesitancy’ that could arise because of apprehensions around vaccine safety, efficacy apart from any other myths and misconceptions.

It also aims to provide information on potential risks and mitigate unintended crises during the introduction and rollout. “The strategy also seeks to build trust and enable greater confidence in the COVID-19 vaccine amongst all people by employing transparency in communication, while also managing any mis/disinformation and rumors around it,” it said.

The Health Ministry intends to achieve this in three ways. Firstly, using the social influence or endorsements from experts and official voices to spell out the process of immunization (where, how, who, when date, and time); emphasize the safety and efficacy of vaccines and explain the decision to conduct the drive in a phased manner.

Secondly, the ministry intends to establish a National Media Rapid Response Cell (NMRRC) under its ambit to ensure preparedness through media monitoring and social listening to respond in real-time. It will also unfold media and public discourse through extensive monitoring of print, electronic, and digital media.

Thirdly, this will be achieved by involving community mobilizers and frontline workers to engage with the community at various levels through community consultations, faith leaders, and religious meetings, engaging youth, civil-society organizations, self-help groups, panchayats, and other community-based platforms.

The four key areas that will be addressed as part of interventions under the strategy are — giving information on COVID-19 vaccines, addressing vaccine hesitancy, building vaccine eagerness along maintaining and sustaining COVID appropriate behaviors.

In case of any adverse effects following immunization (AEFI), the strategy emphasizes supporting the mobilizers and health workforce in managing crisis situations by appealing to the community to stay calm while waiting for a proper diagnosis and prevent aggressive behavior against health workers.

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3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Jubilant Foodworks to acquire 10.76% stake in Barbeque-Nation Hospitality for Rs 92 crore

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Jubilant Foodworks Ltd (JFL), which operates fast-food chains Domino’s Pizza and Dunkin’ Donuts in India, on Thursday said it will invest Rs 92 crore into Barbeque-Nation Hospitality Ltd (BNHL) for a 10.76 percent equity stake.

“The company has entered into a share subscription agreement to acquire equity shares and a restated shareholders’ agreement to regulate the rights and obligations of BNHL’s key shareholders,” Jubilant Foodworks said in a regulatory filing.

The company said it will invest Rs 92 crore for acquiring the 10.76 percent stake in BNHL. BNHL operates Barbeque Nation (BBQ), an Indian cuisine casual dining Brand, which introduced the concept of live grilling of kebabs to the Indian market.

It owns and operates 138 Barbeque Nation restaurants across 73 cities in India and seven international Barbeque Nation restaurants (as of November 30, 2019). It also has a presence in the Italian cuisine segment under the brand Toscano.

Jubilant Foodworks Chairman Shyam S Bhartia and its Co-Chairman Hari S Bhartia said the proposed investment will create value for the company’s shareholders.

BNHL had reported total revenue of Rs 742.5 crore in 2018-19 on a consolidated basis.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

SEC to consider emergency use authorisation request of Serum, Bharat Biotech on January 1

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Subject Expert Committee (SEC) of the Central Drugs Standard Control Organisation (CDSCO) is considering EUA requests from Serum Institute of India (SII) and Bharat Biotech’s application for COVID-19 vaccines when it will reconvene on January 1, 2010, reported CNN-News18.

Coming to Pfizer India, the company will make a presentation before SEC of CDSCO for approval of its COVID-19 vaccine. An emergency use authorisation (EUA) is short of a full approval.

This comes in after SEC on COVID-19 deliberated and analysed the additional data and information submitted by SII and Bharat Biotech yesterday. “The Subject Expert Committee (SEC) in the CDSCO met today in the afternoon to consider the emergency use authorisation (EUA) request of Pfizer, Serum Institute of India (SII) and Bharat Biotech Pvt. Ltd,” the health ministry said in a statement.

“Further time was requested on behalf of Pfizer. The additional data and information presented by SII and Bharat Biotech Pvt. Ltd was perused and analysed by the SEC. The analysis of the additional data and information is going on. The SEC will convene again on January 1, 2021,” it said.

The UK’s Medicines and Healthcare products Regulatory Agency (MHRA) on Wednesday approved the COVID-19 vaccine developed by scientists at Oxford University and produced by AstraZeneca for human use. The Pune-based Serum Institute of India (SII), the world’s largest vaccine manufacturer, has entered into a tie-up AstraZeneca to manufacture ‘Covishield’.

While considering SII’s application, the SEC on December 9 had recommended that the firm should submit updated safety data of phase 2 and 3 clinical trials in the country, immunogenicity data from the clinical trial in the UK and India, along with the outcome of the assessment of the UK MHRA for grant of EUA.

As for Bharat Biotech, after detailed deliberation, the committee had recommended that the firm should present the safety and efficacy data from the ongoing phase 3 clinical trial in the country for further consideration.

SII had applied to the Drugs Controller General of India (DCGI) for emergency use authorisation for Covishield on December 6 while Bharat Biotech had sought a similar nod for its its indigenously developed Covaxin on December 7. Pfizer had applied for a similar approval for its vaccine on December 4.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow