Covid forms 40% of total health insurance claims

BENGALURU: As of September, Covid now forms 40% of total health claims for the

general insurance industry

. It has been steadily increasing from 8% in May to 23% in July to 34% in August - as cases rise and reliance on private healthcare increases.


"This is scary - Covid claims now nearly form half of total health industry claims. And one must remember that non-Covid claims have also been increasing. In March and April when the lockdown was severely enforced, we saw people postponing planned

surgeries

like a cataract operation or knee-cap surgery. But in September, non-Covid claims had risen because of the pile-up; caused by people postponing

necessary treatment

in the first half of the lockdown," says Amit Chhabra, business head - health, Policybazaar.com.

Analysts also worry rising Covid claims could put more pressure on the books of insurers, particularly the three PSUs - United India, Oriental and National; whose solvency ratios have been of concern. Higher health loss ratios could put pressure on general insurers in the second half of fiscal 2021, said Ansuman Deb, equity analyst, ICICI Securities.

Besides, it may put pressure on premium. "Rising Covid claims is an industry concern. This could lead to price hikes for health insurance products," said Nitin Aggarwal, equity analyst, Motilal Oswal.

Another pronounced trend has been the severity of Covid claims verus non-Covid claims. Data shows, Covid-patients needed more intensive care with

average claim amount

of Rs 1.18 lakh versus non-covid claims average of Rs 57,000. Among the different age groups, the highest claims were in the 46-50 age band with claim amount of Rs 2.19 lakh, followed by the 51-44 age band.

But a heartening trend, showing better recovery, has been the claim amount for Covid-19 has reduced sharply since the beginning of the lockdown. In April, treatment for Covid could cost as high as Rs 1.82 lakh on average; this has come down to around Rs 1.2 lakh in September.

One reason says Policybazaar has been the push from the government and regulatory bodies on

private hospital charges

for Covid treatment. "Another reason for charges reducing over the last six months is the duration of stay. In April, where a majority of cases were senior citizens with co-morbidities, there were hospital stays of 30 days. But by June, we saw hospital duration reducing to 15-17 days. And now in September it has come down to 8 days - this shows that a healthier and younger subset of people are also contracting the virus as cases rise; but are able to recover faster," said Policybazaar's Chhabra.