Insurance companies in India rejected 11% of all health insurance claims in 2023-24, according to the latest report from India’s insurance regulator. The Insurance Regulatory Authority of India (IRDAI) report also predicts that health insurance premiums are “likely to remain elevated” this year.
Insurance companies in India rejected 11% of all health insurance claims in 2023-24 with another 6% of claims still pending as of March 2024, according to the latest report of India’s insurance regulator. The Insurance Regulatory Authority of India (IRDAI) report also predicts that health insurance premiums are “likely to remain elevated” this year.
The IRDAI report released this week gives a broader picture of the entire insurance industry, life and general.
The insurance penetration in India dipped in 2023-24 for a second consecutive year to 3.7%. It was 4% in the year-ago period, and at an all-time high of 4.2% in 2021-22 on the back of the Covid pandemic. The dip was contrary to the global trend.
In non-life or general insurance, health insurance contributes close to half of global nonlife insurance premiums, according to the report.
Going by the trend, IRDAI expects health insurance premiums to grow by 3% in real terms in 2024.
“With wages and healthcare expenses exceeding CPI inflation, health insurance pricing is likely to remain elevated,” the insurance regulator says.
Premium prices are important as just 10% of the total health insurance policies have been taken out by individuals.
What was the claim-settlement ratio of insurance companies? This is important as it reveals the proportion of claims they have honoured against the total claims made.
“During 2023-24, insurers have settled about 83% of the total number of claims registered in their books,” says IRDAI.
The companies rejected 11% of the total claims while about 6% were pending for settlement as on March 31, 2024
It is important to note that the rejection and settlement data is combined for groups and individuals. This doesn’t provide a clear picture as cases of rejection of group insurance, generally taken out by corporates, are close to zero.
According to experts, incomplete or false disclosure, consciously or unconsciously, at the time of purchase of policies also contribute to rejection of claims.
The average amount paid per claim was a little over Rs 31,000 in 2023-24.
In the last financial year, the insurers settled 2.69 crore health insurance claims and paid a total of Rs 83,493 crore.
In terms of number of health insurance claims settled, a lion’s share of 72% was through Third Party Agencies (TPAs).
In non-life insurance, earnings from the health insurance business was the largest segment with a contribution of 40.29% of the total premium. It has increased from 38.02% in 2022-23.
In 2023-24, insurance companies saw a growth of 20.32% in health insurance premium collection from the last fiscal, according to the report.
The health insurance business is classified into three classes — government sponsored, group and individual.
Of the total lives covered, about 45% each are in government-sponsored schemes and group policies, while just 10% are health insurance cover taken out by individuals.
The insurance coverage, be it life or general, is low in India but the tax on insurance premiums, at 18%, is high.
While insurance penetration dipped in India, globally, it went up from 6.8% in 2022 to 7% in 2023.
Though there is no social security net and government medical infrastructure is rickety, the high 18% GST on insurance premiums defies logic.
Many users settle for a smaller cover due to high premiums, experts have told India Today Digital.
To get more Indians covered under health insurance so that they don’t need to make hefty out-of-pocket payments, tax rates need to be reduced and premiums made affordable
source ;- indiatoday.in/business/story/health-insurance-claims-rejected-pending-irdai-report-premiums-to-remain-high-india-insurers-2655186-2024-12-26
