Health insurance premium is set to rise this fiscal on the back of rising medical costs and high Covid-19 claims. While a number of insurers have already announced hikes in their retail health insurance products, others are expected to raise in the coming months.
“High Covid-19 claims have impacted many insurers in the last year. A few are looking at increasing the premium by 15 per cent to 20 per cent on retail health covers,” said an executive with a private sector non-life insurer. Insurers also point out that the rising medical inflation along with new protocol post the Covid 19 pandemic has added to costs.
Rising hospital costs
“Premium increase is predominantly linked with medical inflation, which in turn is a function of several factors such as rising hospital costs, new advances in medical technology and treatment. These factors are ever-present in a growing economy like India where healthcare is advancing in a big way. The pandemic has also brought a multitude of changes in the treatment protocol, impacting the cost of claims,” said Prasun Sikdar, Managing Director and CEO, ManipalCigna Health Insurance.
The insurer has increased the premium by 14 per cent on one of its products — ManipalCigna ProHealth. “We have increased prices after three years. This will ensure the overall portfolio is managed better,” Sikdar explained.
Star Health and Allied Insurance has also increased the premium for one product on the retail side by about 15 per cent and is looking at revisions in other products too.
“We have taken up price hike in one of our leading products in the Family Health Optima and looking at price revision in some of our other products. After evaluating a couple of them, and probably if the case allows, we will be filing that with the regulator,” said Anand Roy, Managing Director, Star Health and Allied Insurance in an analyst call after the fourth-quarter results.
Claims stats
According to a recent report by Motilal Oswal, Covid-related claims accounted for six per cent of the total health claims paid out in 2020-21. It is expected to constitute 11 to 12 per cent in 2021-22, it said quoting ICRA.
Among Asian countries, India had seen the highest medical inflation rate of 14 per cent in 2021 1, followed by China (12 per cent), Indonesia (10 per cent), Vietnam (10 per cent), and the Philippines (9 per cent), the report noted.