Insurers weigh up hike in health premiums

Early last year, a deadly second wave of the pandemic caused a sharp spike in claims, putting pressure on these companies. To help health insurers tide over the deteriorating loss ratio due to rising Covid claims in 2020, the Insurance Regulatory and Development Authority of India, or IRDA, had allowed a 5% revision in premium rates.

The number of fresh cases in the country averaged over 170,000 in the last two days. Industry watchers say rising numbers are again prompting more people to buy health insurance policies with minimum sum assured 2 lakhs.

“The third wave has just started, and the number of cases is increasing rapidly. There has been an increase of almost 90% in cases in just one week. Covid cases have led to a substantial increase in the number of insurance claims,” said Bhabatosh Mishra, Director – Claims & Underwriting, Niva Bupa Health Insurance Company Ltd., “But any revaluation of health insurance products can be done only if we are a covid Steady trend in terms of number of cases. It may be a bit early to change the premium. In a few months, looking at the efforts made by the government, once we get a clear picture, we will be able to decide on fair pricing of health insurance products covering COVID risks,” he said.

Anand Roy, managing director of the country’s largest health insurer Star Health and Allied Insurance Co Ltd, said the company would decide on any revision in premium only by the end of January. “We will not change the prices just because of the Omron cases. Even though the rate of transmission of COVID is high, the number of hospitalizations has not increased proportionately, and that is why the number of claims in percentage terms is still under control, especially because we are a company with a large customer base. are.” Said.

“The loss ratio for the industry came under stress during the second wave, but it has started improving from October onwards. Therefore, till the claims do not reach an alarming level, there will be no possibility of any change in the premium for health insurance products.”

IRDA said on January 3 that health insurance policies that cover the cost of treatment for COVID will also cover the cost of treatment for infection caused by the new Omron variant of the coronavirus. The regulator has asked the insurance companies to put in place an effective coordination mechanism with all their network providers and hospitals to provide seamless cashless facilities to the policyholders in case of hospitalization and speedy services to the customers.

In April 2020, IRDA clarified that all compensation-based health products covering the cost of hospitalization will also have to cover the cost of hospitalization treatment due to COVID-19. The insurance regulator has also requested hospitals to honor the service-level agreements entered into with insurance companies to provide cashless treatment to health insurance policyholders.

With the rise in cases of Omicron, a new bulge of fear and sanctions is developing across the country. Several states, which harbored a second wave of the pandemic, announced a slew of rules to prevent the transmission of the virus.