Charges for treatment for COVID-19 vary widely, resulting in higher insurance claims and efforts are on to standardise the treatment rates, according to an insurance company official.
The General Insurance Council is trying to bring in standardisation of COVID-19-related treatment rates, said S.S. Gopalarathnam, who laid down office as MD of Chola MS General Insurance Co. on Tuesday.
Responding to a query while talking to reporters, he said, “Covid-related claims under normal health insurance come to about ₹1.8 lakh on average while other claims are in the region of ₹45,000.”
He also said the pandemic would lead to a contraction of up to 2.5% in the general insurance business for FY21. “In the first quarter, the industry witnessed a contraction of 12-13% in sales whereas Chola MS General Insurance saw a 15% contraction following the lockdown, he said.
Mr. Gopalarathnam will be succeeded by V. Suryanarayanan — currently president and COO — on July 1.
Mr. Gopalarathnam said the second quarter would be better than the first, with the company expecting flat growth in the second quarter.Growth and in the third quarter growth would be aided by original equipment manufacturers and banks.
“We are already seeing some traction in two-wheeler and motorcycle sales and insurance, which are equivalent to pre-COVID-19 level. Two-wheelers and motorcycles and tractors will bounce back quickly on rural demand, while it would take a little more time for light commercial vehicles,” he said.
Stating that the company was expected to maintain a high level of solvency margin over and above the regulatory minimum during the current year, he ruled out any fresh capital infusion.
“Last year, we made a net profit of ₹260 crore after making a provision of ₹270 crore towards stressed assets. We expect to earn more net profit than last year,” he said.