Covid fallout: Health insurance policies jump by 26% this year, one third sold to women

State Bank of India’s Chief Economist Soumya Kanti Ghosh said the pandemic has made people aware not only about the indispensability of health insurance policy but also about the need to have adequate coverage, better features and seamless services.

New Delhi: The Covid-19 pandemic that killed more than 5.16 lakh people in India, and more than 6 million people worldwide has also brought significant change in the insurance sector in the country as people are buying more health insurance policies to protect themselves in case there is a need for hospitalisation, says a recent report by the SBI Research.

In the report, State Bank of India’s Chief Economist Soumya Kanti Ghosh said the pandemic has made people aware not only about the indispensability of health insurance policy but also about the need to have adequate coverage, better features and seamless services. He says the realisation has led more people to buy new policies or port to insurers who offer better coverage and claim settlement.

For example, in the last financial year (April 2020 - March 2021), the retail health insurance policies have shown a massive jump of 28.5 per cent to Rs 26,301 crore and continued to grow in the current financial year also, as a deadly second Covid wave triggered by the Delta variant of the SarS-CoV-2 virus hit the country in April-May last year.

According to the industry data, during the first ten months of the current financial year, the health insurance portfolio of insurance companies also increased by 25.9 per cent. It shows that the retail health policies registered an increase of 17.3 per cent during this period, while group health insurance policies registered an increase of 30.1 per cent.

Sharp rise in death claims

During the first Covid wave, which was considered less lethal in comparison to the second wave, the amount of death claims paid by the life insurance industry went up by nearly 41 per cent. Insurance companies paid Rs 41,958 crore in FY 2020-21. In case of individual life insurance business during the last fiscal, the life insurance companies paid 10.84 lakh claims, with a total benefit amount of Rs 26,422 crore, which amounts to 46.4 per cent growth.

Moreover, the ticket size of the death claims, and the per capita compensation paid increased to Rs 2.44 lakh in the last fiscal compared to Rs 2.13 lakh in FY 2019-20. “The rise in death claims is seemingly due to the increased deaths during COVID-19,” Ghosh wrote in the report.

Women account for one-third life insurance policies

The Covid pandemic also brought about another positive change in the life insurance industry as women accounted for one third of life insurance policies sold last year. In FY 2020-21, around 93 lakh life insurance policies were sold to women, which is a 33 per cent share in all the life insurance policies sold in the year. The proportion of policies on women in case of private Life Insurers is 27 per cent and that of LIC is 35 per cent.

Another fact that emerges from this data is that at least in 19 states and Union territories, the share in number of policies bought by women to the total policies sold is higher than the all-India average of 33 per cent.