While we recovered from the First wave of Covid-19 and got a bit relaxed in the first quarter of 2021, the second wave hit the country hard. The intensity of the second wave was quite severe and got everyone off-guard. The lockdown around the country derailed the economy and its impact was felt in all sectors. Last year the health insurance sector gained a lot with selling of Covid specific policies and other insurance products. However the burnt was felt in the health insurance as well as life insurance sector this year due to rising claims.
As per reports the second wave of Covid has pushed up claims for life insurance companies by 5-10 times for April 2021. This follows 1.9 lakh Covid-related deaths since April 1, 2021, which is 17% higher than lives lost to the pandemic in the entire FY21. The health insurance industry also suffered due to the rising number of claims due to Covid. So far, almost Rs 24,000 crore worth of claims have been paid under health insurance due to COVID-19-related hospitalisation and associated expenses, according to General Insurance Council data.
There have been a lot of complaints of overcharging by the hospitals for Covid claims. The Finance Ministry must now think of some regulator body for the hospital sector to standardise rates otherwise the Health insurance industry will continue to bleed. Health Insurers are already demanding price revision in Covid specific products. The claims experience in this portfolio has not been good.
Mr Subhash C Khuntia retired as Chairman, IRDAI recently. The post is still lying vacant. There are many contenders for this post including people from industry as well as bureaucrats. During the pandemic time the Government should take a quick decision and finalise the appointment for chairman soon.
The overall insurance industry has also been affected due to pandemic and lockdown in various states. Hopefully the situation should improve from July 2021, but still we need to keep our fingers crossed as a third wave is expected to hit the country soon.
