Insurers Consider Air Pollution Impact on Pricing
New Delhi: Health insurance premiums in India’s capital could see a 10-15% increase, as insurers assess the impact of air pollution on health-related claims. If approved, this would be the first instance where air quality directly influences insurance pricing.
Regulatory Approval Required
For insurers to implement this city-specific change, they must first submit evidence to the Insurance Regulatory and Development Authority of India (IRDAI), proving a direct correlation between air pollution and rising health insurance claims in Delhi.
Surge in Pollution-Related Claims
According to a Reuters report citing industry executives, insurance providers have observed a sharp rise in claims linked to pollution-related illnesses in 2024. Hospital admissions for respiratory and cardiovascular conditions—including asthma and chronic obstructive pulmonary disease (COPD)—spiked notably in the second half of the year, reaching nearly 18%, compared to 5-6% in the first half.
Report Highlights Alarming Trends
A joint study by the Boston Consulting Group and Indian healthcare administrator Medi Assist found that:
- Health insurance claims related to respiratory illnesses in Delhi rose by 8.3% from FY 2023 to 2025.
- Delhi witnessed the highest increase in healthcare costs across India during this period.
- Respiratory disorders have shown a year-on-year increase of 10-12%.
Potential Nationwide Impact
If Delhi’s proposed insurance premium hike gets regulatory approval, it could set a precedent for other highly polluted cities in India, potentially leading to similar pricing adjustments.
As air pollution continues to worsen, both policyholders and insurers must brace for the long-term financial and health impacts of deteriorating air quality.
