India: Life Insurance Claims Decline By 31.83%

Life Insurance Claims Decline By 31.83% – WITH COVID deaths declining across India, life insurers have reported a 31.8 per cent fall in death claims paid out at Rs 41,457 crore during the fiscal ended March 2023 compared with Rs 60,821 crore in the previous year.

Of this, Rs 23,423 crore was paid out by public sector companies — mainlyLife Insurance corporation (LIC), the Insurance Regulatory and Development Authority (IRDAI) said.

According to the Union Ministry of Health data, there were 5.33 lakh deaths due to Covid alone since March 2020. However, a vast majority of people did not get any insurance benefit as insurance penetration is very low in the country.

Of late, there has been a mild uptick in Covid cases being reported from many parts of the country; there are 4,091 active Covid cases in India as on December 29, 2023, according to data released by the Ministry.

As per Swiss Re Sigma Report, the insurance penetration of the life insurance sector in India declined from 3.2 per cent in 2021-22 to 3 per cent in 2022-23 and the same for the non-life insurance sector remained at 1 per cent in both these years. As such, India’s overall insurance penetration fell to 4 per cent in 2022-23 from 4.2 per cent in 2021-22.

On the other hand, during 2022-23, general and health insurers settled 2.36 crore health insurance claims and paid Rs 70,930 crore towards settlement of health claims as against Rs 69,498 crore in the previous year. The average amount paid per claim was Rs 30,087 in 2022-23 as against Rs 31,804 a year ago, according to the IRDAI Annual Report released this week.

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