Home / Insurance / News /  Will the third wave push up health insurance premiums?

MUMBAI : India’s health insurers are surveying a surge in coronavirus infections and a rush of hospitalization claims before deciding on raising premium rates.

Early last year, a deadly second wave of the pandemic led to a sharp rise in claims, putting these companies under pressure. To help health insurers handle worsening loss ratios due to rising covid claims in 2020, the Insurance Regulatory and Development Authority of India, or Irdai, had allowed a 5% revision in premium rates.

The number of fresh cases in the country averaged more than 170,000 in the past two days. Industry watchers say a rising tally is again prompting more people to buy health insurance policies with a minimum sum assured of 2 lakh.

“The third wave has just begun, and the number of cases is rapidly increasing. Cases have shot up by almost 90% in just a week. The number of insurance claims from covid cases has gone up significantly," said Bhabatosh Mishra, director-claims and underwriting, Niva Bupa Health Insurance Co. Ltd. “But any re-pricing of health insurance products can be done only after we see a steady trend in terms of the number of covid cases. It may be a bit too early to change the premium. In a few months, considering the efforts made by the government, once we get a clearer picture, we will be able to decide on the fair pricing of health insurance products covering covid risks," he said.

Anand Roy, managing director of Star Health and Allied Insurance Co. Ltd, the country’s largest health insurer, said the company would decide only by the end of January on any revision in premiums. “We won’t be changing the prices just because of Omicron cases. Even though the rate of transmission of covid is high, the number of hospitalization has not gone up proportionately, and that’s why the number of claims in percentage terms is still under control, especially because we are a company with a large customer base," Roy said.

“The loss ratio for the industry came under stress during the second wave, but it has started improving since October. So, unless claims reach an alarming level, any change in premiums for health insurance products will be unlikely," he added.

Irdai on 3 January said health insurance policies that cover covid treatment costs would also cover expenses for treating infections caused by the new Omicron variant of coronavirus. The regulator has also asked insurers to have an effective coordination mechanism with all their network providers and hospitals to make available seamless cashless facilities to policyholders in case of hospitalization and render faster services to customers.

In April 2020, Irdai clarified that all indemnity-based health products covering hospitalization costs must also cover the costs of hospitalization treatment due to covid-19. The insurance regulator has also requested hospitals to honour the service-level agreements entered with insurance companies to provide cashless treatment to health insurance policyholders.

With the rise in Omicron cases, a new upsurge of fear and restrictions is developing across the country. Several states, which saw an upsetting second wave of the pandemic, have announced a slew of rules to prevent the transmission of the virus

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