24-08-2020
India sees low number of COVID-19 life claims
Insurance AlertssIndia sees low number of COVID-19 life claims
COVID-19 has claimed a reported 50,921 lives in India so far, yet insurers have only received about 1,000 death claims. Of those, 600 have been settled, representing 1.5% of the total casualty figures.
The settled claims have amounted to $33,917. The country's largest insurer, Life Insurance Corporation, has settled claims worth $14,347 as of 15 August. An LIC spokesperson told Moneycontrol that this amount breaks up into 293 claims under 693 policies.
Over the past five months of the pandemic, only 66,700 claims have been settled under various insurance policies, according to a report from Forbes India. Of this, 66,100 claims are health claims related to COVID-19.
On the non-life side, insurers have received over 100,000 health claims worth $1.05m over the same time. However, the Forbes report noted that the number of claims is similar to health claims received in a non-pandemic situation. The reason for the low claims ratio, according to insurers, is due to the poor insurance coverage and penetration in the country. Swiss Re’s sigma reported that India’s insurance penetration in 2020 was only 3.76%, compared to the global average of 7.23%. Further, the mortality protection gap in India was $8.6tn in 2014, a number that has only grown since.
According to IRDAI statistics, there were 333.3m in-force life insurance policies as of 2019. This means that only 25.7% of the country's population is covered by life insurance policies. However, Indian insurers have launched several new COVID-19 policies, so there is a possibility of rising claims in the coming weeks.
Most claims came in August
In June, insurers received 6,500 COVID-19 health claims, but over 100,000 in August. However, insurers also said that about a quarter of the claims are invalid, due to lack of hospitalisation or not meeting other policy terms.
“The average claim size for COVID-19-linked treatment, including hospitalisation, is around $9,497. Several consumables, including PPE kits, are not payable under traditional medical covers. Less than 35% of India's population has health insurance coverage, and, hence, the claims are low,” said the head of claims at a mid-sized private general insurer, in the Forbes report.
Source: Asia Insurance Review
