While for the month of July GDPI of health insurance was Rs 4,979 crore.
The claims arising from the Covid-19 are expected to increase health loss ratios in the second half of the current financial year. ICICI Securities in its report says if assumed that Covid claims maintain a run rate of $150m per month (Rs 1,105 crore) from September, the total FY21 Covid claim amount would be around $1.4bn (Rs 10,500 crore).
As on September 10, general insurance companies have received around 2.07 lakh claims from Covid-19 patients for over Rs 3,300 crore and have settled over 1.30 lakh claims amounting to Rs 1,260 crore. The gross direct premium income (GDPI) of health insurance in the period between April and July was Rs 18,415 crore shows the data from Insurance Regulatory and Development Authority of India. While for the month of July GDPI of health insurance was Rs 4,979 crore.
“Assuming August was similar at Rs 5,000 crore, the total health GDPI till August end works out to `23,400 crore (US$3.2bn). Hence, total Covid-related claims till August end was approximately 11% of the total health GDPI,” said ICICI Securities in its report on General Insurance. It also says that industry reports suggest that reinsurers are hesitant to underwrite the Covid risk. This has been a major challenge for pricing of insurance policies covering Covid treatment.
Currently more and more are coming from the Covid treatments but a the non-Covid claims normalise, the health loss ratio would worsen in second half of FY21.
“Rising Covid claims against the backdrop of normalisation in non-Covid claims is set to put health loss ratios under pressure in H2FY21. While exponential increase in Covid claims will lead to cut in earnings estimates, well-funded insurers stand to gain market share in health insurance in the longer run,” said ICICI Securities. From `181 crore in June, claims from novel Coronavirus have risen to Rs 2,665 by end of August.