AXA moots mass insurance scheme for loss of income during pandemic lockdown

The insurance cover can guarantee a regular pay-out for a specific time frame to these affected individuals

Bharti AXA
Bharti AXA General Insurance has recently initiated talks with about three to four state governments to have a mass level product to cover loss of livelihoods during pandemics. Photo: Reuters
Namrata Acharya Kolkata
3 min read Last Updated : Apr 19 2020 | 3:24 PM IST
AXA Re is in talks with various state governments in India for an insurance product to cover loss of incomes during pandemic or epidemic leading to lockdowns. 

Few days back, Thomas Buberl, CEO of AXA, the French multinational insurance, in an interview with French newspaper Le Journal du Dimanche, had said an insurance scheme backed  by a pooling system involving government and private insurers could be looked at to counter pandemics.

In India, with a share of almost 90 per cent of people working in the informal economy, about 400 million workers in the informal economy are at risk of falling deeper into poverty

due to job loss during the Covid 19 crisis, according to a recent report by ILO (International Labour Organisation).

According to sources, AXA Re  has recently initiated talks with about three to four state governments to have a mass level product to cover loss of livelihoods during pandemics.

The insurance cover can guarantee a regular pay-out for a specific time frame to these affected individuals. The company has recommended that employees with a gross income of up to Rs 2.5 lac per annum can be considered for the purpose of this scheme and benefit of Rs 5000 per month for a period of two months can be envisaged.

Also, according to the proposal, the government can provide list of all employees to the insurance company, and pays the premium. The insurance company makes the payouts to the government.  The list can be prepared with the help of EPFO (Employee Provident Fund Organisation), which has the list of all the workers employed in factories as well as other establishments. 

At present, there are few insurance products available for pandemics, but they are mostly taken as add-ons with a housing Loan Protection Plan or a Critical Illness cover.  Pandemic is generally not covered under such policies.

As Covid 19 cases continue to rise, various state governments are required to to bear huge financial burden on account of payouts to informal sector workers.

For example, the state government of Maharashtra will give Rs 2000 each to 1.2 million construction workers in the state. A one-time assistance of Rs 1,000 each will be given to workers of unorganised sectors in West Bengal. The state government of Uttar Pradesh has also announced an aid of Rs 1000 each to about 1.5 daily wage earners in the state.

According to the recent report by ILO on impact of Covid 19 in the labour market, full or partial lockdown measures are now affecting almost 2.7 billion workers, representing around 81 per cent of the world’s workforce. 

The ILO’s new global estimates indicate that working hours will decline by 6.7 per cent in the second quarter of 2020, which is equivalent to 195 million full-time workers. 

 “The ILO estimates that 1.25 billion workers, representing almost 38 per cent of the global workforce, are employed in sectors that are now facing a severe decline in output and a high risk of workforce displacement. Key sectors include retail trade, accommodation and food services, and manufacturing,” the report said.
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Topics :CoronavirusLockdownBharti AXA

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