With the number of COVID-19 cases on the rise across India, the low numbers of health and life insurance claims have set alarm bells ringing among industry stakeholders.
The number of COVID-19 positive cases registered across the country was 247,000, whereas the number of health insurance claims filed with various companies as of 4 June stood at only 8,500, revealing a huge gap in the health insurance segment in the country.
Claims worth $18m have been filed so far with various insurers. Data released by various government departments show that less than 4% of the total COVID-19 victims in the country have health insurance coverage.
No major impact on life insurers
Out of 6,088 deaths across the country, as of 4 June, life insurers have received only 100 death claims, which is equivalent to around 2% of the total. Despite massive awareness drives conducted by the life insurance council and the insurance regulator life insurance penetration in the country, which is calculated on the basis of premium collected as a percentage of GDP, stood at 4.6% in 2019.
Industry officials believe that there will be a surge in life claims in the coming months, as many families are currently in quarantine, which is preventing them from lodging claims and submitting the requisite documents.
Health insurance dominates life insurance
With the surge in COVID-19, Indians are today buying more health insurance than life insurance. A large number have registered for the government run health scheme, Ayushman Bharat Yojana and for various group health insurance schemes being offered in the market.
Insurers have also seen a 30% surge in the demand for health Insurance products over the past three months. On the other hand, life insurance in India is still seen by the vast majority as an investment or a tax saving product.
The highest number of health and death claims are being filed in the state of Maharashtra at 60%, followed by Delhi with 15% and Tamil Nadu with 10.4%.