Covid-19 insurance claims to exceed 50% of Q1 health payouts; 16,000 crore cleared

MUMBAI: Even as the second wave of Covid ebbs, claims continue to pour in for health insurance companies. As a result, payout due to Covid-19 claims is likely to exceed the insurance claims of other ailments in the first quarter of the current fiscal.

Insurance companies have already settled claims of more than Rs 16,000 crore due to Covid and the numbers are still rising, according to industry executives.

“As an industry, we had 10 lakh claims in the first quarter of this year, which is the same as the number of claims for the whole of last year. The claims are close to the provisions that we had made last year,” said Ritesh Kumar, MD & CEO, HDFC Ergo General Insurance. He added that if his company’s experience was anything to go by, 25% of the claims were yet to come in.

According to PolicyBazaar health insurance head Amit Chhabra, in the first wave of the pandemic, claims for Covid treatment were a third of the total health claims. This dropped to 31% as the first wave ebbed in the December quarter even as the share of private treatment increased. Before the second wave hit, there was a sharp drop in Covid hospitalisation cases and a rise in elective procedures, which resulted in the share of Covid claims dropping to 14%.

In the first quarter of the current fiscal, Covid claims are expected to be more than 50%. Even now claims are coming in for reimbursement for hospitalisation and domiciliary treatment. Another reason for the increase in Covid claims during the first quarter is the drop in other ailments due to the lockdown. “There are fewer accidents. Eating out drops, so chances of contracting infectious diseases also drop and elective surgeries like cataract and knee replacement are postponed,” said Chhabra.

On the other hand, Covid has led to growing demand for health insurance. Premium collected for health insurance has jumped to 58,572 crore in FY21 from Rs 51,674 crore in FY20.

As insurers learn to live with Covid claims, they are devising health insurance products keeping it in mind. A key aspect of Covid is that consumables form a large portion of the hospital bills, which are not covered under standard health policies. Insurers are now designing policies that cover consumables.