OCTOBER 18, 2022 BY HEALTHINSURANCEADVISOR
A lot of life and health insurance players are looking to raise charges that are likely to be passed on to consumers. Higher premiums may mean profitability to insurers, but this could hit policyholders hard.
A number of life and health insurance companies, who have not revised rates in the pandemic, are now looking to raise prices to keep up with inflation.
NIVA Bupa is increasing premium from Jan 2023 by 10 to 15 % for various products.
Like general inflation, medical inflation is a reality. The cost of treatments has been going up, in fact faster than general inflation. Company have revised ReAssure premiums by ~15%. You would find ReAssure, even with the premium revision, to be one of the most competitively priced plans with unmatched benefits. Company have also revised the premiums of Heart Beat Plan by ~10%.
The Insurance Regulatory and Development Authority of India (IRDAI) has approved company’s request for premium adjustments for both the products.
As per set guidelines, Company will be sharing a communication with all ReAssure and Heart Beat Consumers about the premium revision this week. This change will be applicable by 1st week of January 2023 and the new premium will be communicated to the consumers as part of Renewal Communication in due time.
The insurance regulator also allows insurance aggregators to revise prices within a certain period of time. That said, most companies did not raise the premium costs, in order to cater to the insurance needs of consumers during the pandemic.
Covid has resulted in major business losses for the insurers, with a sharp rise in claim ratios, which had put these companies under a lot of pressure. Hence, insurance companies are now reviewing the hospitalisation claims, and are considering on raising the premium rates. To add to it, in the wake of the emerging XE variant, claim ratios are expected to increase throughout the ongoing financial year.
According to sources, insurance players, such as HDFC Ergo and Care Health have already received approvals for products with revised pricing. Niva Bupa has also applied to the regulator for revised products. Star Health, too, recently mentioned in their analyst call that they have taken an average hike of 15 per cent on their flagship health insurance policy from August 2021.
According to industry experts, the hike in insurance premiums has been discussed for over six months now, and it could happen anytime soon. As the higher claims of Covid have hit the insurers hard, they would have no choice, but to pass on the cost to consumers.
If the premium is not increased, the hike will put margins of the company under pressure, which in turn, will impact their profitability. If it’s increased marginally, the price hike will have a negative impact on both pricing and margins.
