COVID-19 insurance claims hit P16.7 billion in 2020-2021 –IC data

Insurance claims related to COVID-19 reached P16.71 billion during the 2020 to 2021 period, the Department of Finance (DOF) said Saturday citing data from the Insurance Commission (IC).

In a statement, the DOF said that over half or around P9.05 billion of COVID-19-related insurance claims were life insurance policies.

Citing the IC’s report to Finance Secretary Carlos Dominguez III, the Finance Department said 23% or P3.89 billion of COVID-related claims were paid between the beginning of the pandemic in March 2020 up to end-2020, while the bulk of 77% or P12.82 billion were claimed in 2021.

For his part, IC Commissioner Dennis Funa said that for life insurance policies, the amount of P9.05 billion in claims corresponds to about 9,500 death benefits.

Dominguez noted in Funa’s report that compared with data from the Department of Health (DOH) of around 51,000 deaths as of end-2021 attributed to COVID-19, less than a fifth, or only 18.6%, were covered by insurance based on IC data.

The Finance Secretary said the low insurance coverage rate for pandemic-related deaths underscores the importance of securing financial protection to prepare for emergencies and other unexpected incidents.

Funa said the rest of the pandemic-related insurance claims in 2020 and 2021 were from health maintenance organizations (HMOs), which made up 39% or P6.44 billion of the payouts, mutual benefit associations (MBAs) with a 5% share at P833 million, and non-life policies with 2% or P382 million.

“Notably, the out-patient benefit, meaning people who were not confined in the hospital, have the highest number of claims paid with 413,000 for the whole of 2021. Followed by claims under other benefits at 54,000,” said Funa.

The IC chief said that for 2021 alone, death benefits had the biggest share with P6.8 billion or 53% of the total payout, followed by in-patient benefits or those confined at hospitals at 27% or P3.5 billion.

Out-patient benefits for 2021 accounted for 15% or P1.92 billion of the claims, he added.

In 2020, Funa said the biggest chunk of COVID-related claims came from the HMO sector with P1.9 billion or 49% of the payouts, while life insurance accounted for P1.46 billion or 38%.

The rest were non-life insurance claims amounting to P160.2 million or 4% and MBAs with P354.9 million or 9%.

“It is noteworthy that within 2021, all four industries have already exceeded 35 percent of their claims payment for the entire 2020,” said Funa.

The IC chief said he has not received any indication from the insurance industry of any increase in premiums following this development as he believes it continues to have the capacity to absorb these payouts.

He also pointed out that the P3.8 billion in COVID-related claims in 2020 made up only 3% of the total benefit payments of P120.76 billion in all four sectors—life, non-life, HMO, and MBAs.

The P12.82 billion in COVID-related claims in 2021 was 10.25% of benefit payments totaling P112.19 billion as of the third quarter of that year, said Funa.

“So despite this, the insurance and HMO industries remain resilient and in fact, all four sectors posted net income for the third quarter of 2021,” said Funa.

The total assets, investments, premium, and net income of the insurance and HMO industries exhibited growths of 12.91%, 14.84%, 24.93%, and 17.28% respectively, added Funa. — DVM, GMA News