Health, life insurance premiums likely to get costlier before COVID-19 third wave hits

Health and life insurance plan premiums are likely to get costlier with several service providers across the industry looking at raising the prices, said experts.

According to Indraneel Chatterjee, Co-founder, RenewBuy Insurance, India has rolled out the largest and amongst the most efficient COVID-19 vaccination programmes in the world.

“India has vaccinated almost 30 crore citizens with at least one dose and more than seven crore with both the doses (as of July 12). World over we’re witnessing the onset of the third wave of COVID-19 and chances of it impacting India are high because of our vast population. It will take us a minimum of 6-8 more months to reach 70 percent vaccination which is required for herd immunity. All of this puts India at a risk and there is a possibility that some insurance companies may increase their premiums before the third wave hits the country,” Chatterjee said.

It is therefore advisable, Chatterjee added, that consumers who do not have a life and health insurance plan should apply for it and people who have not renewed their plans should not keep waiting. "It is important that we learn from the previous waves, as we have seen how grave the COVID-19 situation can become within days," he said.

The premium price increase should, however, not be the core reason for expediting insurance purchase, but consumers should look at protecting themselves and their families so that they can be financially secured for any kind of medical treatment during the third wave.

Additionally, according to Ankit Agarwal, Alankit Ltd, the payment of more than Rs 26,000 crore approx. has been paid out in claims by the Insurer companies in the past 2-3 months in accordance with the recent discussion amid the big gun insurers. This is a significant impact that the industry has faced because of COVID-19 wherein the life insurer data is different which most likely leads to an addition in the premium charged by the insurance companies after a long debate with the re-insurers according to the treaty or game plan for future.

The majority of the insurers, Agarwal said, have effectively amended or not engaging any new or draining portfolio of group insurance/s even for their current corporate clientele. Most importantly, on account of the Ministries and Regulatory guidelines, insurers are offering settlements at an extremely low to no derivations which straightforwardly is affecting the endurance and sustainability of all the insurers. Subsequently, he added that the premium charges are expected to be expanded soon in India.