COVID-19: Implications for Indian Health Insurance Industry

Abstract

The COVID-19 pandemic has placed unprecedented financial stress on most sectors of the economy, including aviation, tourism, hotel, retail industries and the education sector. However, there is one notable exception, that is, the health insurance industry. In comparison with the previous years, a sharp decline in the amount of net claims incurred, along with rising net earned premiums, has resulted in a huge decline in losses for the medical insurance industry for the half-yearly period of 2020. Between the non-pandemic years and the pandemic year (i.e., 2020) the number of claims reported and settled has reduced substantially for half-yearly periods. Despite the decrease in the number of policies issued for the half-yearly period from pre to during the COVID-19 period, there is an increase in the amount of gross earned premiums. However, as the pandemic stretched from the second to the third quarter of 2020, the industry experienced losses, as the growth in net incurred claims was much higher than the rise in net earned premiums (NEP). Nevertheless, these losses are less than those incurred in the non-pandemic period.