Non-life insurers receive more than 100K Covid-19 claims worth Rs 1,644 cr

While initially, the claim amount was high, it has now moderated with many states prescribing a standard treatment rate for Covid-19

The rise in the number of Covid-19 cases in the country has led to a surge in health insurance claims. Non-life insurers, as of Tuesday, have received more than 100,000 claims to the tune of Rs 1,644 crore. Of the total claims received, nearly 66,000 claims amounting to Rs 628.95 crore have been settled so far.

When policies were issued, insurers were caught on the wrong foot. “This explains why insurers were worried about hospitals fleecing patients. We wanted the cost to be reasonable and consistent,” said a senior insurance executive.

“The gap in claims reported and claims settled depends on the settlement process. People report claims, but not everything is paid for. Sometimes there are sum-assured limitations and there are policy-level coverages, which include deductibles. On the basis of cover adopted by policyholders, claims get settled,” said Sanjay Datta, chief-underwriting & claims, ICICI Lombard General Insurance.  

The average claim amount has come down, even as the number of claims has increased. Also, hospitals are not charging exorbitant sums for treatment now, except in cases involving comorbidities. The length of stay for patients in hospitals, too, has come down.

Many states have prescribed a standard treatment rate for Covid-19. The General Insurance Council, too, has prescribed a standard treatment rate.

The state-wise data shows Maharashtra, with the maximum recorded cases in the country, has the maximum claims coming in at 44,050 amounting to Rs 571 crore, followed by Tamil Nadu at 12,379, Delhi at 10,175, Gujarat at 7,622, and Karnataka at 6,923.

Despite Covid-19 claims are rising fast, insurers are not overtly worried. They say claims from other segments have fallen, thus, balancing out the losses. However, the real worry is that the premium collection is not rising as fast as it ought to. Industry experts say the rising claims due to the virus will not impact the solvency margins of insurers.

“For insurers, the problem arises when more capital is required to strengthen the balance sheet to pay for the losses. When solvency drops and more capital is required, that is when insurers will face problems. Till that happens, insurers will pay claims on policies already underwritten. However, sourcing fresh business will get impacted,” said Datta.