The average claim size for Covid is higher than an average retail claim, but we expect that the same would come down as the pandemic becomes less severe and with state-guided protocols in place.
Ms. Tajinder Mukherjee, chairman-cum-managing director, National Insurance Company (NIC)
National Insurance Company (NIC) has so far paid around Rs 363 crore for Covid-related claims and its claim settlement ratio stands at 92%, chairman-cum-managing director Tajinder Mukherjee says. In an interview with Mithun Dasgupta, Mukherjee says the insurer needs one more tranche of capital for which it is talking to the government.Excerpts:
How has NIC’s health and motor insurance segments performed this fiscal?
The health insurance portfolio of the industry is showing a growth of about 15% in FY21, and our retail health portfolio has also seen a similar growth. The pandemic was instrumental in increasing the health insurance awareness among general public. There was also a demand for new covers like the Corona Kavach Policy. Our group health insurance portfolio has fared well with growth of more than 50%. The motor insurance portfolio has been adversely hit on account of a fall in sales and also due to vehicles being laid up during the lockdown. The industry witnessed de-growth close to 48% in April which has gradually improved to 10% as per the latest data available. NIC has a de-growth of 18% as on date and we intend to improve upon this in the next quarter.
How many claims have you received for coronavirus treatment and what has been the claim size so far? How many cases have so far been settled and what is the claim amount paid?
We received over 52,000 claims till November for Covid-related treatment, while the average claim size is Rs 75,000. For the industry, the average claim size is little higher, at around Rs 95,000. The average claim size for Covid is higher than an average retail claim, but we expect that the same would come down as the pandemic becomes less severe and with state-guided protocols in place. Our settlement ratio for Covid claims is 92%. Our company has paid around Rs 363 crore for Covid-related claims.
As the claims outgo has been substantial due to the pandemic, do you feel it would put pressure on company’s financials?
A: It certainly would, if the effect of the pandemic does not slow down. In the first six months, Covid claims were offset by fewer claims reported for other treatments. Due to the Covid impact, people were either postponing their planned surgeries or the hospitals had curtailed their non-Covid services. Now that the hospitals have almost fully opened up and Covid claims are still a concern, there would be some impact in the rest of the financial year. I suppose we will see normalcy only after the vaccine is launched.
NIC has increased health insurance premiums this year. What has been the average increase in premiums? What were the reasons for this increase?
This year, Irdai has made certain coverages mandatory in all health insurance policies. So, all our retail policies have been revised to include these coverages. Obviously, there was a price impact. For most of the policies, the price impacts have been in the range of 2-5%. For one retail policy, we have rationalised prices after around 8 years and the increase has been between 15% and 60% depending on the age bracket and sum insured chosen. We had sought Irdai approval for this rationalisation almost a year ago, but the approval and the price change happened this year.
The financials of PSGICs have been a concern. How does NIC fare in this respect? Does it need additional capital support from the government?
The company had three years of huge losses in the past mainly because of strengthening of long-term technical reserves and provision for pension liabilities. Consequently, the solvency margins suffered, although liquidity was never a concern in our day-to-day operations. The government had infused Rs 2,400 crore last fiscal, and we have already received similar amount this financial year. There is a need for one more tranche of capital for which we are talking to the government. We are also working on a multi-pronged approach to improve the financials. The steps taken by the company have already shown result as it was back in black for both Q1 and Q2 of this fiscal.