Insurance claims 22% higher even after drop in Covid-19 cases

Insurance companies have settled 16.4 lakh Covid claims so far this year with the number of outstanding claims standing at 3.24 lakh, industry-wide data shows. The number of reported claims jumped 22% to 20.38 lakh in July compared to 16.6 lakh cases in June, an industry executive said. “The jump in reported claims in July may have been due to people claiming reimbursements. A lot of Covid cases had been reported in May. People who could not avail cashless facility may have paid from their pockets and are filing claims now,” Anurag Rastogi, president-chief underwriting officer & chief actuary, HDFC ERGO.

The Covid-19 claims have hit the industry quite significantly. “At the industry level, the amount of Covid claims in the first quarter of FY22 has gone above what insurers had recorded in entire FY21. We have witnessed a similar trend at HDFC ERGO,” he said.

Bajaj Allianz Health Insurance seconds the trend. “Owing to the second wave, we have seen more than 100% of Covid-19 claims in Q1 compared to entire FY of 2020-21,” said Bhaskar Nerurkar, head – health claims, Bajaj Allianz General Insurance.

The percentage of Covid-19 claims in overall health pay-out went above 50% for HDFC ERGO.

“In FY21, it was around 20%. This year it is 50%,” he said.

Covid-19 claims constituted almost 45% of overall claims for Bajaj Allianz in Q1 FY22. It was 17% last year.

Non-Covid claims

“As far as non-Covid claims are concerned, we had recorded a reasonable reduction in them during the first wave of Covid due to stringent lockdown. The numbers turned normal as the lockdown eased. This year, we did witness some reduction in April and May, but nothing significant,” Rastogi said.

At Bajaj Allianz, non-Covid claims increased in the second wave.

“During the first wave, customers postponed their planned surgeries. However, in the second wave, we have received many claims for planned surgeries as well. Covid-19 claims are receding as we witnessed in early July,” said Nerurkar.

Other trends

Covid-claims from non-metro cities witnessed a jump in the second wave compared to the first wave, said Sanjay Datta, chief – underwriting & claims at ICICI Lombard.

“The mortality due to co-morbidity was lesser in the second wave compared to the first wave,” he said.

Covid-19 is here to stay. The insurance industry is designing special products keeping Covid-19 claims in mind. Data from Policybazaar.com shows that cost of consumables (PPE kits, gloves, sanitisers) in medical bills has increased to up to 15-20% from 2-3% earlier due to more focus on hygiene. Consumables are not covered in insurance by design.

The insurers have started offering consumables coverage in the health policy now. HDFC ERGO’s recently launched product Optima Secure has an in-built coverage for non-payable items while insurers such as Niva Bupa (earlier known as Max Bupa), Star Health, and Digit Insurance offer it as a rider.

“By design, we kept the consumables coverage in-built in Optima Secure because it makes the policy features simple to understand for our customers. Besides, we already had consumables coverage as a rider available for quite a few years. Our Protector rider offers coverage for non-payable items,” said Rastogi of HDFC ERGO.