Coronavirus Is Causing An Insurance Conundrum

How do you ethically profit off an event that is killing senior citizens and healthy medical professionals indiscriminately?

Covid-19 is wreaking havoc with economies across the world. And yet, out of the disaster, opportunity has fallen into the lap of a few industries. Unfortunately, in this case, the opportunity can be fruit of the poisoned tree.

How do you ethically profit off an event that is killing senior citizens and healthy medical professionals indiscriminately? That has previously healthy companies laying off large portions of their workforce? That has entire nations hiding at home?

And yet, there are sometimes caveats. Medical companies are helping patients in times of immense stress on the system. Remote work companies are helping organisations stay alive, and stave off cabin fever for the millions stuck at home.

But, what about insurance companies?

Health Insurance’s Problem In Regional India

Insurance, and particularly health insurance as far as this article is considered, has had a relatively hard time of it in India. That may be a strange thing to say about an industry that has touched the lives of nearly a 100 million people, but that is less than 10% of the entire country.

Comparatively, private health insurance in other countries covers up to 95% of the population, according to Antony Jacob, the CEO of Apollo Munich.


According to an industry insider who didn’t want to be named, health insurance outside Tier-I India has had a historical problem with marketing.

Everytime they have attempted to promote a policy, they have faced a backlash that Jacob himself mentions in the above article; Indians don’t want to spend money, they want to save it. Even if a policy can be sold, very often payments stop soon after.

Insurance is based on a fear of the future. Too many Indians see money in the bank as a safer solution than regular deposits in an insurance policy. The only time that changes is when there is an imminent medical threat.

The Coronavirus Conundrum

Covid-19 has lived up to its reputation for the health insurance industry. Online insurance sales in India have jumped by 40% in the last month, compared to the expected 10% that is usually seen at the end of the financial year.

However, apart from one well-publicised standout, the insurance industry has refrained from marketing coronavirus policies, especially in regional India. Instead, some have even implemented features within existing policies to help the pandemic’s victims.

But, why not take advantage of this unique opportunity?


The first, obvious reason is simple. As a marketing executive from Reliance Nippon Life Insurance told me when I reached out to him, “we are not interested in fear mongering.” That’s just a smart branding position.

However, there is a second, more powerful profit motive at play as well. According to the industry insider I mentioned earlier, marketing at this time would only drive customers away long-term.

Due to the unprecedented fear caused by a nation-wide lockdown and the spread of WhatsApp due to cheap data, health insurance marketing would lead to one achievement only; the loss of long-term customers.

Any sales they make now are tainted by the fact that this panic will subside. You may get a month or a year of payments, but eventually they will stop as the coronavirus fear ends.

Considering there is no guarantee that money will provide effective access to medical care during this time, the new policy holders in Tier-II, Tier-III and Tier-IV India will face one of two situations.

Either they won’t need care, and would have wasted their money. Or, they will need care, and probably will not be able to access it. In the end, both scenarios lead to the same belief that insurance companies are out to steal their money.

But, What Has This Got To Do With My Business?

The takeaway here is simpler than most of my articles. Don’t leap at the low-hanging fruit just because you can. Short-term bumps are appealing, but there’s always a downside.

Of course, this doesn’t mean that you can’t take a risk. For every health insurance giant working with their hands tied behind their back, there are startups successfully launching remote fitness and wellness subscriptions.

Are you unsure of how your business’ marketing efforts are affected by the coronavirus? Please reach out to me at tarutr@getlokalapp.com, or at malhotratarutr@gmail.com. If you are uncomfortable talking to me over email, you can DM me on my LinkedIn page or my Twitter profile. I would love to talk to each and every one of you personally!

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