Connect with us

The Plunge Daily

Insurers keen to raise premiums for new policies in the backdrop of COVID-19 second wave

Insurers keen to raise premiums for new policies in the backdrop of COVID-19 second wave
With the advent of COVID-19 pandemic, health insurers are recording higher sales of COVID-linked products and other comprehensive health cover policies.

Business

Insurers keen to raise premiums for new policies in the backdrop of COVID-19 second wave

With the advent of COVID-19 pandemic, health insurers are recording higher sales of COVID-linked products and other comprehensive health cover policies. As such, three industry experts have revealed that health insurers could increase annual premiums by as much as 20% if the rise in the number of infections isn’t arrested.




However, the Insurance Regulatory and Development Authority of India (Irdai), in March, had said that insurers cannot make any significant changes in coverage of health insurance policies that result in an increase in premium. The regulator had allowed minor modifications and offer of an optional cover where the premium is shown separately. Irdai has also asked companies to get an actuarial review of the viability of every health plan at the end of the year to ensure that all health products are sustainable.

A senior insurance company executive told HT that there will be at least a 20% impact on the net earnings of health insurers due to the COVID-19 claims, forcing some insurers to contemplate a rise in premiums for new policies. The officials highlighted that the revenue of health insurers for fiscal 2020 was around Rs 40,000 crore, which was led by higher sales of COVID-linked products and other comprehensive health cover policies. Combined gross premium earned was 15 to 20% higher in FY21, while total claims from COVID policies in terms of value was around 30% of total health premium collected by the industry.

The executive said that even if they add a 10% incremental impact on this ratio (as a percentage of premium collected), the amount of claims would not be less than Rs 25,000 crore, considering a  20% growth in health insurance premium collected during fiscal 2021.


Also Read: Activists and experts raise concerns of overcharging and shortages of Remdesivir


However, it has to be noted that claims from other health treatments have decreased significantly for the industry since many customers have postponed scheduled surgeries. An expert said that this will mitigate the impact of the claims made under COVID-19 policies to some extent. “If the number of cases and claims go up in this manner, there is a fair chance that insurers will rethink on pricing, approach the Irdai, refile their products and increase the cost or premium of COVID-19 health policies,” the official said.


1 Comment

1 Comment

  1. Pingback: India-UAE talks focus on economic recovery post COVID-19 | The Plunge Daily

Leave a Reply

Your email address will not be published. Required fields are marked *

To Top
Loading...