Huge surge in Covid claims in FY21: Digit Insurance

The private non-life insurer, Digit Insurer, had received a total of around 7,000 claims during the year gone by. Interestingly, most of the claims received by it during the year were Covid-19 related ones.

"We have overall received over 6,900 claims for health both for Covid and Non-Covid claims in the FY20 -21. Out of these majority have been Covid claims," Adarsh Agarwal - Appointed Actuary at Digit Insurance told Bizz Buzz.

That health insurance segment is doing very well is known to all. But, which kind of products falling under HI segment were doing better than all other products?

Well, overall demand for health insurance has gone up given the current situation. We have seen good growth for our health insurance product compared to last year. We see people opting for our comprehensive health insurance options, which covers the pandemic as well, says Agarwal, adding, "Also, we have seen a huge demand for our Group Covid product."

Underinsurance is not because of type of policy, it is because of how people make a decision as to how much sum insured is 'adequate' for them.

Usually, we see that on an average the sum insured taken by an individual is around 3.5 lakhs. While the sum insured taken for a family with two adults one child or two children is around 5.5 lakhs.

We have also seen that the average Covid claim size is around one lakh. So, in this case, if someone takes an individual policy with a 3.5 lakh sum insured it might suffice in time of a Covid claim. But if a family floater is taken with just a five-lakh cover, it can leave them underinsured, leaving very little sum insured for any other hospitalization that might be required for the entire family.

Especially in the current times when there are high chances that if one member of the family gets affected the others might also contract the virus, he said. So he has advised that family floater policies with higher dependents should have adequate sum insured, at least double of what an individual would need otherwise.

"We have also seen a higher number of cases where policyholders are underinsured in the elderly section of the population. This happens as people took policy with lesser sum insured some time back and now due to health conditions, they are not allowed by insurers to increase sum insured," he said.

Given the present scenario, should there be a Covid pool falling on the lines of terrorism and Nuclear pool?  

Well, Agarwal says that in our opinion, the industry does not need any such pool at the moment. Although it is a novel suggestion, as with the increasing number of cases the number of claims are increasing every day, hence taking a hit on the insurers books. But we feel, what is required right now is a strong financial position and good risk management practices for companies to stay afloat and settle claims for customers. 

The regulator is taking measures to ensure that the insurance process is made as seamless and fast for policyholders in such testing times. In its reply, he said that Digit Insurance is bringing in more changes in its process along with its paperless, zero touch insurance experience, to ensure the company can make it simpler and faster for its customers.