Insurance claims related to COVID-19 reached P16.71 billion between 2020 and 2021, with life insurance policies accounting for more than half or around P9.05 billion of the payouts, according to data from the Insurance Commission (IC).
In its report to Finance Secretary Carlos Dominguez III, the IC said 23 percent 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 percent or P12.82 billion were claimed in 2021.
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 percent, 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 percent or P6.44 billion of the payouts, mutual benefit associations (MBAs) with a 5 percent share at P833 million, and non-life policies with 2 percent 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,” Funa said.
Funa said that for 2021 alone, death benefits had the biggest share with P6.8 billion or 53 percent of the total payout, followed by in-patient benefits or those confined at hospitals at 27 percent or P3.5 billion.
Out-patient benefits for 2021 accounted for 15 percent 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 percent of the payouts, while life insurance accounted for P1.46 billion or 38 percent.
The rest were non-life insurance claims amounting to P160.2 million (4 percent) and MBAs with P354.9 million (9 percent)
“It is noteworthy that within 2021, all four industries have already exceeded at 35 percent of their claims payment for the entire 2020,” Funa said.
Funa 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 percent 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 percent of benefit payments totaling P112.19 billion as of the third quarter of that year, Funa said.
“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,” Funa pointed out.
The total assets, investments, premium, and net income of the insurance and HMO industries exhibited growths of 12.91 percent, 14.84 percent, 24.93 percent, and 17.28 percent respectively, he added.