Covid-19 impact on claims may force insurers to review prices: Irdai exec

General and standalone health insurers have received 938,640 claims related to Covid-19 till March 15, says Suresh Mathur

Insurance companies may have to review the price of existing products as they tackle claims rising due to Covid-19, said Suresh Mathur, Executive Director, Insurance Regulatory and Development Authority of India (Irdai).

Life insurance companies have seen their death claims shoot up. Among private life insurance companies, SBI Life saw 5,000 covid related claims and paid out Rs 340 crore. ICICI Prudential Life Insurance has also settled a similar amount. HDFC Life has settled 1,271 individual covid related claims and 542 group-related claims. Max Life, on the other hand, has received 10,525 death claims.

“The evolving situation may also force a review of pricing of existing products in light of changing claims experience in each segment,” said Mathur at an event organised by the Confederation of Indian Industry on Thursday.

General and standalone health insurers, as of March 15, have received 938,640 claims related to Covid-19, amounting to Rs 14,092 crore. Insurers have settled 796,247 claims, amounting to Rs 7,418.62 crore, thereby settling almost 85 per cent of the claims reported.

Mathur said the Covid-19 pandemic was not something that the insurance industry can shoulder alone.

The Irdai had set up a committee to examine the requirement and rationale for setting up a pandemic pool. The committee recommended the formation of an Indian Pandemic Risk Pool, with public-private-government participation.

It had reasoned that this should be done as the quantum of loss due to the pandemic is huge and is beyond the capacity of public or private companies or government alone.

Also, with pandemic resulting in increased customer awareness on the need for adequate insurance thereby fostering insurance companies to launch specific and innovative products, replacing the long- term static products with short-term coverages to address short term needs of various industries, Mathur said.

“While pandemic covers are excluded in certain policies and treated as force majeure, in certain others, the government and regulatory authorities have advised the insurers to consider Covid1-9 related claims compassionately. This will add complexity in the claims process and will be an unplanned drain on the reserves”.