The Effect of 2020 on 2021 :
This time last year, concepts such as “lockdowns,” “mask mandates” and “social distancing” were unknown to most of us. Today they are part of our everyday language as the COVID-19 pandemic continues to impact all aspects of our lives. In the year 2020, the whole world is fighting with a virus, which changed the way we live and work at least temporarily. COVID-19 took many lives and made many people jobless. The impact this pandemic created will be there at least for the next few years. No one knows when this pandemic will end, but it is evident that the year 2021 will be different because of the year 2020.
Events in 2020 that will shape the world in 2021:
the pattern has changed, and we are walking towards a new world. A bright new world full of mixed emotions and filled with confusion. What are the impact of 2020 on 2021 due to Covid 19, a mind full of “what will happen now” and a pocket full of “uncertainty”.
Impact on Healthcare Sector
2020 gave us a crisis, COVID-19. It turned the world upside down with a deadly virus thrown at us which left people baffled. No cure, no vaccine, no specific medication.Hospital bills mounting higher than Mt. Everest which has left the common people perplexed.
COVID-19 came when the world is least expecting it. No country is fully ready to face it. Many developing countries have a shortage of healthcare professionals and medical equipment. Even developed countries have a shortage of medicines. So, in 2021, countries may work to fill this gap.
Impact on Employment :
The 2nd thing 2020 gave us is Unemployment or Employed with no pay. This pandemic has forced a liquidity crisis on everyone. The labour class left their jobs in lieu of the pandemic and started walking towards their native place thinking it would be best for them. In fact, this resulted in the work being stopped and money circulation halted, not only for them but also for the country. Some companies gave the people to be on the job but forget about getting paid till the times have returned to normal. Since people are scared that they might not land another job, they remain to stay with the one they have.
To understand the pressure that COVID-19 is having on firms’ performance as well as the adjustments they are having to make, the World Bank and partners have been conducting rapid COVID-19 Business Pulse Surveys in partnership with client governments. These offer a glimmer of good news. Responses collected between May and August showed that many of these firms were retaining staff, hoping to keep them on board as they ride out the downturn. More than a third of companies have increased the use of digital technology to adapt to the crisis.
Impact on Indian Economy
Next up Economic Crisis. COVID 19 gave India GDP contraction was at -23.9, all because of no jobs, overburdened healthcare, and complete economic lockdown. Nothing was getting manufactured, no sales, no import or export, nothing. This is where the Government has been the biggest lockdown by not planning their steps accordingly.
The economic damage caused by the COVID-19 pandemic is largely driven by a fall in demand, meaning that there are fewer consumers willing to purchase the goods and services available in the global economy. This dynamic can be clearly seen in heavily affected industries such as travel and tourism. To slow the spread of the virus, countries have placed restrictions on travel and many people could not purchase flights for holidays or business trips. This reduction in consumer demand was the reason why airlines lost planned revenue and as a result they had to cut their expenses by reducing the number of flights they operate. The same dynamic applies to other industries, for example with falling demand for oil and new cars as daily commutes, social events and holidays are no longer possible. As companies start to reduce employment to make up for lost revenue, the worry is that this will create a downward economic spiral when these newly unemployed workers can no longer afford to purchase as many goods and services as before. This dynamic makes the economists contemplate whether the COVID-19 pandemic could lead to a global recession on the scale of the Great Depression. But this may improve in 2021.
Impact on import and export :
During COVID-19 pandemic, imports and exports were affected adversely. And it affected many countries. For example, the Automobile industry in India imports components from China. When China was fighting with coronavirus, factories were shut down and as a result, India’s automobile industry had to halt production. Not just India, but many countries are depending on the imports for many products such as electronics, pharmaceutical ingredients etc. So, in the year 2021, companies will work on diversifying supply chains and countries will work on achieving self-sufficiency. This may lead to protectionist tendencies.
Impact on the Indian insurance sector?
COVID-19 which began as a health crisis has now taken over as a financial one. With the global economy crashing and multiple sectors taking a major financial hit, the insurance industry has become a vital part of the new reality of the economy.
* Impact on individual insurance sectors
While the insurance industry like every other industry has taken a major hit during this pandemic, the future prospects of the industry seem hopeful. Given below is an analysis of challenges and opportunities in the individual insurance sector.
* 1. General Insurance
Since General Insurance undertakes the valuation of assets and businesses as well as their overall economic activity, it is benchmarked with the GDP of a country to measure the insurance penetration. Hence, a large proportion of the General Insurance sector is dependent on the performances of industries and individual businesses. So with the 2020 lockdown causing a hitch in the business sector, the General Insurance market has subsequently suffered. The overall sector is believed to look up as the global economy stabilizes by 2021.
2. Health Insurance
India traditionally has been an underinsured country when it comes to Health Insurance. However, with Government initiatives such as Ayushman Bharat which aims to ensure the poor and vulnerable, the gap has somewhat been bridged but the Private Insurance Schemes have reported covering only18% of the urban population and a little over14% of the rural population. While the demand for health insurance is expected to increase considerably, underwriting thresholds may also go up and thus the negative movement may not be offset.
With the constant increase in the number of cases and the prolonged duration of the crisis, the IRDAI has mandated all general and health insurers to start offering Corona Kavach – an indemnity based health plan and Corona Rakshak – a fixed benefit health insurance – policies to their customers. These policies are meant for covering the hospital and medical expenses of COVID 19 patients.
3. Life Insurance
Life insurance primarily protects the livelihoods of people and their future financial security. As a result, life insurance has a direct correlation with the earnings of people, their business performance, and net worth. Since the onset of the pandemic, there has been a rush to increase one’s cover. According to the PwC report, pure life covers should see renewed interest, and thus, should see a boost in demand.
While long-term guarantees will look attractive, insurers will still face constraints as the interest rates plummet with consumers becoming more cautious about their investments, leading to a shaky stock market.
4. Automobile Insurance
The automobile sector, which accounts for over35% of the overall insurance premium collection, was already witnessing a slowdown when the COVID-19 outbreak took place. The pandemic and the resultant lockdown further impacted the automobile industry thus reducing significant revenue for the insurance industry.
With most companies adopting the work-from-home policy, there has happened a drastic reduction in the number of motor vehicles on Indian roads resulting in a nationwide reduction in the number of kilometers driven. Thus, insurance customers who see a reduced usage for their vehicles this year and show a lower chance of availing a high-priced insurance coverage can avail of an insurance policy at a discounted rate under the “pay-as-you-drive” model. This new type of car insurance policy allows car owners to insure their vehicles for only the kilometers that they tend to drive against a general average yearly driving distance.
At a larger scale, the introduction of pay-as-you-use shall prove to be a significant shift in the history of automobile insurance in India as it seeks to become more responsive to the usage (and consequently) needs of the customers.
The COVID-19 crisis has given rise to both immediate and potential challenges for the insurance sector in near future .
Why the impact of 2020 is good for you and maybe continue to 2021?
Let’s look at some good things as well. Yes, there have been some good things, it’s all about perspective. These things are going to remain with us for the future.
Positive Impacton Education System & Technology:
2020 gave us knowledge of technology, which is one good thing that happened among all the chaos. People now know how to use technology for their benefit. Online classes, online training, work from home jobs, online grocery shopping, everything is now at your fingertips.
People who were not comfortable with technology are now Master of it. Teachers who did not think their classroom would move ahead of books and blackboard can now have a laugh at how they have become so tech-friendly, that they are handling their teaching material and issues of kids online, and using a whiteboard.
Positive Impact on Environment
Climate Change, major positive change. Mother Earth could finally breathe! The lockdown resulted in about 20% of outdoor activities which in return gave Earth the time to heal. Pollution levels were dropped, Rivers became pristine, no garbage on the sideroad, fewer cars on the road.
People started loving the atmosphere, the air was fresh to take. Now it all depends on people, how they maintain this positivity .
Coronavirus pandemic affected everyone and changed our daily lives. The world will create 2021 based on these changes and also with the lessons we learned while fighting with the pandemic.
More work from home jobs, which is a win situation for all. We will have to maintain social distancing norms even in the future, even if there comes out a vaccine because we are not sure how long is it going to be effective.
So more and more companies are now thinking of converting their usual desk job into work from home jobs because it maintains the sanity and health of the employee as well as improves their work performance, which is obvious because they won’t waste their time in the unnecessary coffee break and gossips and office politics.
The pandemic has been hard on us physically, mentally, and emotionally. That’s how 2020 will impact 2021 and It is a big change for all of us, a big change in the usual way of leading a life. 2020 has come with its own set of rules to follow and I’m afraid to say we must follow them if we want to live a good and healthy life. Times will change because nothing is permanent but until then we must hold onto whatever we have and make the best of it.