COVID HIT HOTELIERS WANT 18% GST THRESHOLD RAISED
MORE CLAIMS, LONGER PERIOD OF HOSPITALISATIONS IN SECOND WAVE TO HIT PROFITABILITY OF INSURERS
A surge in COVID-19 related claims during the ongoing second wave of the pandemic that saw more and longer periods of hospitalisations is likely to put pressure on the profitability of non-life insurers in the near term, a sharp contrast to the situation last year.
According to General Insurance Council, the number of COVID-19 claims filed since the virus struck early 2020 was at 986,366 at the end of March this year, amounting to 146 bln rupees.
Of these claims, insurers settled 849,034 worth 78 bln rupees. The numbers speak a different language this time around. In April alone, 132,168 claims were filed, and so far this month, a whopping 465,869 claims have been made. This takes the country's total COVID-related insurance claims to 1.58 mln, amounting to 246.10 bln rupees as of Monday. Insurers settled 1.3 mln COVID-19
claims worth 125.8 bln rupees as of Monday, sharply higher than what the numbers were at the end of March.
Officials of non-life insurance companies say that during the second wave of the pandemic, the average claim settlement amount has also risen significantly compared to last year.
Informist had reported last week, quoting The New India Assurance Co Chairman and Managing Director Atul Sahai, that the average COVID-related claim settlement amount during the second wave had risen to 115,000 rupees from 95,000 rupees last year. For insurers, the biggest fear is an increase in the duration of hospitalisation of policyholders because of complications such as mucormycosis.
Higher claims and settlement amount have led to a surge in the loss ratio and the combined ratio of insurers this financial year.
This could remain higher if we compare it to last two (financial) years," he said. The loss ratio and combined ratio are used to measure the profitability of an insurance company.
While the former measures the total incurred losses in claims in relation to the total collected premiums, the latter shows the incurred losses and expenses in relation to the total collected premiums.