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Covid 19 surge: Non-life insurers brace for more pain from rising cases

Surabhi Mumbai | Updated on April 05, 2021

Life insurers say impact limited till now

Amidst the second wave of Covid-19 cases in the country, insurance companies say they are poised to deal with rising claims but general insurers are worried about the impact on their balance sheets. For the life insurance sector, the pandemic has posed less of a challenge as the number of deaths has been much lower than the active case load.

“The first quarter of this fiscal will be challenging for all non-life insurers as health claims are on the rise again. While Covid-19 claims are surging, people are also getting elective surgeries done,” said the head of a general insurance company, adding that if cases continue at this level then it would also begin to dent the balance sheets.

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“As of now, it’s wait and watch mode. Covid-19 cases are rising and there will be more clarity on medical claims by the month end,” noted another general insurer, adding that the need for hospitalisation and number of critical cases have been lower till now, even though cases have been rising.

By March 15, general insurers had received over ₹14,000 crore of claims according to industry data.

Life insurance

In contrast, life insurers say the impact of the pandemic, in terms of claims, has been limited till now.

“Covid-19 claims are not too many. Some impact has been there but we will like to watch it for some time. Claims may go up but it will be temporary,” said G Murlidhar, Managing Director, Kotak Mahindra Life Insurance.

As of now, Kotak Life Insurance has paid a total of about 900 Covid-19-related claims amounting to about ₹90 crore, he said.

An executive with another life insurer said that even last year, the number of Covid-19-related claims had been low, especially in the initial months after the lockdown.

“There will be some impact of Covid-19 on business and mortality but it will be limited and overcome. Even in the last wave, the impact had been limited and business had continued,” the insurer noted.

According to a recent report by Motilal Oswal, higher Covid-19 claims were reported across insurers.

SBI Life Insurance saw about 5,000 Covid-19-related claims and paid about ₹340 crore, the report said.

“A similar rise in death claims was seen in other isurers as well, with ICICI Prudential Life Insurance settling claims of about ₹340 crore,” it said. HDFC Life Insurance settled Covid-19-related claims with 1,271 individuals and 542 Group-related settlements. Death claims for Max Life Insurance were the highest at 10,525, compared to 7,313 in the third quarter of 2019-20, it noted.

India recorded over one lakh daily Covid-19 cases, crossing even the peak recorded in the first wave of the pandemic in September last year.

Published on April 05, 2021

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