Covid-related health insurance claims fall 35% to about Rs 5,000 crore in Q2

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General and health insurers have witnessed a decrease in the number of Covid-related health claims since the second wave of the pandemic, reported the Business Standard.

Insurers paid out a little over Rs 5,000 crore in Covid health claims in the July-September quarter (Q2 of FY22). This is 35% less than the Rs 7,700 crore in claims they settled in Q1, the report quoted unnamed officials as saying.

Insurers paid out roughly 6.2 lakh Covid health claims in the second quarter, compared to 7.8 lakh in the first. Insurers have settled 1.4 million claims totalling Rs 12,702 crore in the first six months of FY22, which is much higher than the previous financial year.

In FY21, the insurers paid out Rs 7,833 crore on 849,034 claims.

While the number of Covid cases decreased dramatically after the second wave, the claims trajectory did not follow the same trend due to a lag in submitting claims, the report quoted insurance industry experts as saying.

Health insurance

The Business Standard quoted Bhaskar Nerurkar, head of health claims, Bajaj Allianz General Insurance, as saying that since non-Covid claims have gone up by 73%, health claims have climbed by 27% overall.

The report quoted a chief executive officer (CEO) of a private insurer as saying that hospitals have raised their prices, as evidenced by the fact that the cost per claim has grown by 20-30%. However, no insurance firm has increased the price of its existing plans.

As a result, profitability will be impacted.

Because such expenses were not incorporated in previous plans, the general insurance business has seen its revenues drop as a result of the growing Covid claims, but insurers have absorbed the losses.

Insurers were first comforted by the fact that non-Covid health claims were fewer since consumers postponed procedures owing to fear of getting Covid. However, in recent years, they have noticed a significant increase in such claims.

Despite the higher claims, insurers’ health insurance portfolio grew at 32% annually through August, compared to 12.6 % in the same period last year. It shows that retail premiums are expanding at a quicker rate than group premiums. This is because the retail segment accounts for the majority of premiums for standalone health insurers.

A continuous increase in the health category is likely to drive non-life rates. With Covid claims levelling out, rates in the automobile insurance market increased, albeit from a lower base, the report quoted experts as saying.