Page 14 - Insurance Times June 2021

affordable and more accessible to These are claims made by customers massive spike in the number of
many more customers," said for Covid treatment under all insurance claims. Around 50 per cent
Ramchandra Pandit, MD and CEO, Navi insurance schemes, including two of such claims are getting rejected
General Insurance. specifically for Covid, since April 2020. while those whose claims are being
processed are receiving only 60 per
Navi had acquired Mumbai-based Among states, Maharashtra leads with
cent of the amount.
insurance company DHFL General 5.35 lakh people submitting claims
Insurance for INR 100 Cr ($14 Mn) in worth Rs 6,896 crore as of May 14, A big reason behind a difference in
January 2020. followed by Gujarat, Karnataka and insurance claims and settlement
Overhauling traditional insurers to Delhi (see chart). These five states amount, and rejection of a large
adopt more digital channels and data- account for 65 per cent of the total number of claims, is unpreparedness of
driven approaches is essential in a claims. insurers who did not anticipate such a
large influx of claims. The exclusion of
country where insurance penetration While the average Covid claim amount
the overhead consumables, including PE
is abysmally low at 3.7%, according to was Rs 154,808 as of March 2021, the
kits, masks and gloves, from the policy
the latest Economic Survey. While average amount settled worked out to
traditional insurers have depended on Rs 95,622 per person on an all-India and different treatment protocols have
a network of agents to push products basis. Among states, Telangana topped also forced patients to bear additional
and drive sales, pandemic-induced in amounts settled with a person costs at their own expense.
lockdowns and social distancing norms getting Rs 125,260 for hospitalisation Even if a patient's policy is eligible for
have been the perfect trigger for and treatment, followed by Delhi with cashless settlement, the insurance
digital insurance channels. Rs 121,540 per person. companies are not offering it. They have
to pay the full amount themselves and
This has also prompted everyone from With cases and claims spiking,
leading fintech unicorns and recent complaints have emerged of some file the reimbursement later. Even
startups to experiment with different insurance companies refusing to renew Finance Minister NirmalaSitharaman has
insurance delivery models to tap into or offer new Covid policies to taken cognizance of it. She has spoken
the post-Covid demand for this product. customers, prompting the Insurance to the IRDAI chief to look into the
In fact, the Insurance Regulatory and Regulatory and Development matter. Besides, in some cases, the
Development Authority of India (IRDAI) Authority of India (IRDAI) to step in. private hospitals are charging much
has also, in recent times, introduced "It has come to the notice of the higher prices than what the government
measures to improve delivery of digital Authority that some of the insurers are has prescribed and the insurance
companies are refusing to pay those.
insurance products. not offering Corona Kavach and Corona
Moreover, they are rejecting renewal
Rakshak Policies to the customers, and
Health insurance claims some insurers are not renewing such of such policies despite the regulator
policies," the IRDAI said in a letter to having told insurers to renew these
shoot to Rs 22,955 crore policies up to September 30. As per the
insurance companies.
Due to covid second wave, with the IRDA rules, selling and renewing
number of infections rising rapidly Covid patients pay 40% Corona Kavach policy is mandatory for
across the country, claims made under all insurers, while it's an option in cases
health insurance for Covid have shot to medical cost from pocket of Corona Rakshak policies.
Rs 22,955 crore with 14.82 lakh Covid-19 patients are paying as much State-wise data on Covid insurance
customers submitting hospital bills as as 40 per cent of treatment costs from claims till May 14 shows total 14.82
on May 14. their pocket despite health insurance. lakh Covid insurance claims worth Rs
Insurers have been selling short-term 23,000 crore have been made, out of
However, insurance companies have
COVID-specific policies -- Corona which 12.33 lakh claims worth Rs
settled only claims of 12.33 lakh
customers for about Rs 11,794 crore Kavach and Corona Rakshak -- in bulk 11,700 crore have been settled so far.
since last year.
so far, according to figures compiled by Also, patients are facing at least two-
General Insurance Council. The claims Low premium, as specified by three week lag in the processing of
of over 2.5 lakh customers involving Rs insurance regulator IRDA, made these claims and settlement. This has also
11,161 crore are yet to be cleared, the policies affordable. However, the caused disparity in claims and
figures show. second wave of Covid-19 has led to a settlements. T

14 The Insurance Times, June 2021