Nepal:Insurers face a claims surge

Insurance companies in Nepal are finding the going tough as they try to deal with the quantum jump in the number of COVID-19 claims being lodged across the country.

Nepal has been witnessing a steady rise in the number of COVID-19 positive cases over the past six months with 105,000 cases being reported up to 30 September. The 20 private non-life insurers have so far issued 145,570 COVID-19 insurance policies covering 1.4m individuals and collecting a total premium amount of $6.8m.

A total of 5,316 claims have been lodged with the different insurers so far, out of which 827 claims amounting to $653,000 have been settled. This delay in settling claims has had a negative impact on the market as insurers have seen a huge fall in the sale of COVID-19 insurance policies over the past few weeks even as the pandemic continues to spread. Insurers are citing lack of proper documents as well proof of infection as reasons for the delay in settling the claims.

In April, the Nepal insurance regulator, Beema Samiti, in the wake of the increasing number of COVID-19 cases, had directed all non-life insurers to issue coronavirus insurance policies. The policy named ‘COVID-19 insurance scheme’ was classified into two categories and citizens had the option of selecting between individual and family plans.

Under category A, for sum assured of $836, the premium amount for individuals was $8 and for the family plan the premium was $5. For category B, for sum assured of $418, the premium amount for individuals was $4 and for the family plan it was $2.5.

As per the policy terms, claims are to be settled within seven days of making the claim if an insured person tests positive for the virus from PCR tests conducted in the government labs accredited by the ministry of health and population.

Insurers had to change the policy conditions when the scheme became unmanageable. Under the new terms every insured person who is tested positive would be given a lump sum amount of $213, and the remaining amount would be provided on the basis of the hospital treatment bill. With claim figures expected to rise further, insurers have now petitioned the government to intervene and settle hospital bills directly for COVID-19 patients and to issue new guidelines for these insurance policies.

Source: Asia Insurance Review

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