Insurance companies are facing a high number of claims amid the second wave of Coronavirus. It is just the beginning of the new financial year and general insurance companies have already received 57% of covid claims they witnessed during the last fiscal year.
According to a report as of May 14, 2021, insurance companies have already received claims worth up to Rs 8,385 crore, which is 57% of Rs 14,560 crore of total covid claims received in the last financial year. Cumulatively, the industry has received a total covid claim of Rs 14.8 lakh as of May 14, 2021, for a total value of Rs 22,955 crore.
Insurance companies have recently been asked by Insurance Regulatory and Development Authority (IRDAI) to mandatory renew covid specific policies, as many policyholders and advisors complain that their policies were not getting renewed. The insurers stopped renewing these policies because of extensive coverage offered by these policies leading to high claim ratios.
“Covid Kavach policy doesn’t have any restrictions. It doesn’t have a room rent limit. It covers home care, PPE and covers all kind of costs. From this point of view, insurers are getting huge claims and they might be finding the need to correct premium rates. It was launched as a temporary policy. Without any evaluation on renewals, it is quite challenging for insurers. Insurers are definitely under pressure,” said Mahavir Chopra, founder of Beshak.org, which is a consumer awareness platform for insurance buyers,
Will increase in claims increase premium rates for policyholders. Experts say while covid claims have gone up there has been a decline in elective surgeries. Moreover, the health insurance portfolio has grown over the last year. “The health insurance portfolio itself has grown by 14 % or Rs 8000 crores during the year. There is no justification for the increase in premium rates because of covid claims. We are sure that the Regulator (IRDAI) will look into the facts so that the interest of crores of policyholders are also protected,” said S. K. Sethi, director and founder, RIA Insurance Brokers.
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