New Delhi: Life insurance claims settled in the first half of the current financial year (April to September 2021) were about 136 per cent more than the average of the same period for the seven preceding non-pandemic years – one clear indication of how many Indians may have actually succumbed to Covid in the year of its second wave.
The steep increase in claims confirms suspicion about “excess mortality” in India, which refers to an unaccounted for increase in death counts during the pandemic. However, it is nowhere close to many estimates which put such excess deaths at 6-10 times higher than official figures.
According to Union Health & Family Welfare Ministry data, there had been 5.05 lakh Covid deaths as of Wednesday evening, in the entire duration of the pandemic.
The financial year in India begins on 1 April and ends on 31 March, which means the sharp increase in claims coincided with the peak of the second Covid wave in 2021.
An analysis of the quarterly financial disclosures of eight top insurance companies – Bajaj Allianz Life, ICICI Prudential, HDFC Life, Kotak Mahindra, Max Life, Pramerica, SBI and LIC – shows that in the second quarter of financial year 2021-22 (between July and September 2021), a total of 9,56,846 life insurance claims were settled.
This is the highest in a single quarter since FY 2013-14.
The penetration of life insurance in India was at 3.2 per cent in 2020, according to the Economic Survey 2021-22.
Insurance claims rising since 2020
Life insurance claims rose significantly between the second and fourth quarters of financial year 2020-21, which roughly coincides with the aftermath of the first wave of Covid.
Regulator Insurance Regulatory and Development Authority of India says claims should be settled within 30 days of filing, but this period cannot exceed 90 days.
In the first quarter (between April and June 2020), 2,39,656 claims were settled, but the next three quarters saw 4,98,409, 6,50,842, and 6,44,140 claims settled, respectively.
In the first quarter of financial year 2021-22, 4,97,909 life insurance claims were settled, which increased to 9,56,846 in the second quarter.
Nearly 15 lakh life insurance claims were settled in the first half of FY 2021-22, which is more than double the average of claims — 6 lakh— settled over the same period in the seven years from FY14-FY20.
Possible inferences about Covid and insurance claims
The fact that the data shows claims shooting up only during Q3 and Q4 of the first year of the pandemic, by which time the Covid numbers had started coming down after the first wave, suggests that there may have been a lag between the wave and the time period of settlement of claims.
India’s first wave “peak” of over 97,000 daily cases was recorded in September 2020, while Q3 and Q4 span the period from October 2020 to March 2021.
The rise in life insurance claims can be attributed to deaths due to Covid as well as the “collateral damage” of pandemic.
While there is no definitive data, health experts believe that Covid-related restrictions and fears — as well as the way the medical infrastructure was swamped by the pandemic — affected the treatment of other diseases, like cancer and TB, which may have led to increased mortality.
Besides, the steep increase in claims is also in line with studies that point to a high rate of “excess mortality” in India directly or indirectly due to Covid.
Estimates of excess deaths in India
While India’s official Covid death toll is just upwards of 5 lakh, various studies have challenged India’s count.
In a July 2021 working paper published by the Center for Global Development, researchers Abhishek Anand, Justin Sandefeur, and Arvind Subramanian, a former chief economic adviser to the Indian government, gave three estimates of excess deaths during the Covid pandemic, arrived at using different methodologies.
The paper explained: “First, extrapolation of state-level civil registration from seven states suggests 3.4 million excess deaths. Second, applying international estimates of age-specific infection fatality rates (IFR) to Indian seroprevalence data implies a higher toll of around 4 million. Third, our analysis of the Consumer Pyramid Household Survey, a longitudinal panel of over 800,000 individuals across all states, yields an estimate of 4.9 million excess deaths.”
The study’s authors acknowledged that each of these estimates had “shortcomings” and that estimating Covid deaths with statistical confidence could be “elusive”, but asserted nonetheless that the death toll from the pandemic was greater than the then official count.
The authors of the study also noted that it was likely that the first wave of Covid in 2020 “was more lethal than it is believed”.
Last month, a study published in Science also estimated that Covid deaths in India could be almost as high as 3 million (30 lakh), which is about six times higher than the official figures.
The Science paper also examined data from different states to calculate estimates of excess deaths during the second Covid wave in April-May 2021. Compared to data from 2018-19, the study pegged excess deaths at 230 per cent in Gujarat, 215 per cent in Madhya Pradesh, 190 per cent in Telangana, 173 per cent in Maharashtra, and 169 per cent in Haryana.
Excess deaths, according to this paper, were the lowest in Kerala at 37 per cent.
(Edited by Asavari Singh)