Amid mounting losses facing general insurers, the insurance regulator is understood to be examining the proposal to increase the premium for Covid-specific cover, but a decision is yet to be taken.
According to sources close to the development, the Insurance Regulatory and Development Authority of India (IRDAI) is set to call a meeting of the actuaries to further discuss the issue of re-pricing of Corona Rakshak and Corona Kavach policies.
Non-life insurers, which had earlier also made a representation to increase the premium for these policies, have now pointed to their Q1, saying it is difficult to survive without a hike in the rates of these policies. “Non-life insurers are bleeding on the back of huge claims on health covers due to Covid. The combined ratios of many private sector general insurers are as high as 125 per cent.
“A review of the rates of these policies is much needed, especiallysince their premium is so low,” noted the head of a general insurance company.
Another insurance executive said companies are awaiting further word from the IRDAI to come out with revised rates. “There has been some discussion, but we are still waiting for further directions,” he said.
The Corona Kavach and Corona Rakshak policies were launched last year by all insurers to provide Covid-specific cover to customers.
Corona Kavach is a family health insurance policy for Covid-19, while Corona Rakshak is a defined benefit policy. Premiums for these policies are as low as ₹150 in some cases.
The third wave
The second wave of the pandemic led to a rise in claims by at least two to three times for health insurance compared to the first wave last year, and insurers are now preparing for a third wave as well.
Some companies have also indicated that they may increase premiums for health cover across the board this year.
Insurance companies have paid Covid-related health claims of over ₹15,000 crore since the start of the pandemic.