COVID-19 to push up General insurers' underwriting losses

General insurers will see underwriting losses rise in the financial year ending 31 March 2022 (FY22) due to higher medical claims following the second wave of COVID-19 infections, coupled with a decline in businesses such as motor insurance, the credit rating agency ICRA says in a report.

To date, almost INR240bn ($3.3bn) have been paid on medical insurance claims due to COVID-19-related hospitalisation and expenses, reported MoneyControl citing data from the General Insurance Council.

Mr Shreeraj Deshpande, COO of Future Generali India Insurance, agrees the surge in the number of infected cases in the second COVID-19 wave in April and May would increase underwriting losses in FY22.

“It is very important that vaccinations are carried out on a war footing to achieve maximum coverage so that the losses as a result of expected subsequent waves, if any, is considerably reduced,” Mr Deshpande said.

According to Mr Sahil Udani, assistant vice president and sector head – financial sector ratings at ICRA, despite the wider underwriting losses, the sector may post a 3-4.5% return on equity, largely supported by investment income.

Source: Asia Insurance Review