General insurers face rising Covid claims

General and standalone health insurers are facing rising health insurance claims amid the second wave of Covid-19 infections, and at least some are now thinking of increasing the premium.

“The number of claims are increasing very rapidly as Covid infections rise. Claims are very high and are affecting the industry badly,” said MN Sarma, Secretary General, General Insurance Council, adding that some hospitals continue to charge high treatments costs.

Claims settled

According to data with the GIC, by April 12, as many as 10.26 lakh Covid- related health claims worth ₹1,484.95 crore were filed. Of this, 8.81 lakh claims, amounting to ₹802.93 crore, have already been settled.

“Claims are increasing. We are getting similar numbers like in August and September last year. The important thing is that there are more defined protocols for home isolation and hospitalisation,” said Anand Roy, Managing Director, Star Health and Allied Insurance.

The insurer has been getting 600-700 Covid-specific claims a day of late, which had gone down to 100 to 150 per day in December and January, he said. It paid out 1.31 lakh Covid claims last year, amounting to ₹1,326 crore.

Repricing of premium

Roy said Star Health is evaluating and may go for repricing premium depending on how the second wave pans out. The insurer did not go for re-pricing last year when a number of insurers increased premiums for health cover.

“There is a likelihood that insurance premiums may go up in the future. Covid is here to stay. Chances of hospitalisation post-vaccination will come down,” he noted.

Bhabatosh Mishra, Director, Underwriting, Claims and Product, Max Bupa Health Insurance, said Covid claims harmed the insurer’s loss ratios in the first wave itself, and the question is how long it can sustain as there are now higher incidents in the second wave.

“At Max Bupa, we have observed that in the last seven days Covid claims coming in the form of cashless claims have more than doubled and are rising at a very fast pace. Initially, in the second wave, the number of Covid claims did not match the number of cases. But now, the pace at which the cases are increasing is fast catching up with the trends seen in the first wave,” he said.