Amid rising Covid-19 claims, group health insurance premiums rise by up to 80%

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Following high claim ratios due to covid-19, the premium rate for group health insurance has jumped by 10-80% for corporates offering health insurance to their employees. Experts say many corporates which have not been able to afford costly covers have gone for curtailed benefits such as co-payment and exclusion of parents to keep their costs under control.

“The health insurance premiums have gone up between 10% to 80%. Some insurers are taking a more phased approach of increase the premium, rather than increasing the premium at one go. Others have taken a knee-jerk reaction and increased it by up to 80% at one go,” said Abhishek Poddar, co-founder and CEO of Plum, a Sequoia-backed company that helps organisations manage employee health insurance & health benefit plans.

MSMEs also opting for health cover

Not only big corporates but also micro, small, and medium enterprises (MSMEs) have started looking for health insurance covers as awareness has increased manifold amid the second wave of covid-19. Experts, however, say that many insurers are not so upfront in offering covid covers, especially to MSMEs.

S. K. Sethi, director and founder, RIA Insurance Brokers, said, “Insurance companies are reluctant towards offering group covers, especially to small and medium enterprises. Because of high claims in covid policies insurers have increased premium rates, too. This has become a challenge for MSMEs”

Reluctant re-insurers

The covid cases, however, have now started to decline. On Wednesday, India reported the lowest new covid cases in 91 days at 42,640, and the lowest 1,167 deaths since April 14, as per the Union health ministry. On Tuesday, 134 positive cases were reported in Delhi, 570 in Mumbai, 803 in Bengaluru, 172 in Kolkata and 410 in Chennai.

Not only the health but group term insurance business has also been going through a rough patch, as foreign re-insurers have shown reluctance in writing the business as perceptions about India changed globally amid the high number of death cases reported during Covid. Experts, however, say this might not be a blanket scenario, and can differ from company to company. For some companies, premium rates have changed while for others the increase might not be so sharp.