Gap between COVID deaths and insurance claims reflects underinsurance

The big gap between actual deaths from the COVID-10 pandemic and the number of death claims is a reflection of India's low insurance penetration rate.

The pandemic in India has officially claimed 311,388 lives as of 26 May. So far, though, around 35,500 death claims have been filed of which close to 29,300 have been settled, reported Moneycontrol.

"It is only in large metros and semi-urban areas where insurance awareness exists. Life insurance continues to be a push product, even though the country doesn't have any social security net. And this is reflected in the low COVID-19 death claims," said Mr Suresh Bhatt, CEO, InsurrRisk Consulting.

In FY2020, the overall insurance penetration stood at 3.76% in India. Life insurance penetration was estimated at 2.82% while non-life was 0.94%. The percentages are marginally different from the FY2019 overall penetration rate of 3.71%. Penetration was 2.74% for life and 0.97% for non-life.

Source: Asia insurance review