COVID-19-related insurance payouts reach P2.93 billion in the first quarter

INSURANCE CLAIMS related to coronavirus disease 2019 (COVID-19) paid out by the industry reached P2.93 billion in the first quarter, based on a study conducted by the Insurance Commission (IC) to assess the impact of the pandemic on the sector.

Between January and March, the life insurance industry paid out P1.79 billion in claims that made up 61% of all COVID-19-related payments.

Health maintenance organizations (HMOs) paid P948 million, or 32% of the total, while nonlife insurers and mutual benefit associations (MBAs) paid 5% and 2% respectively, or P145 million and P49.4 million.

The IC said 30 out of 33 licensed life insurers were included in the survey, as well as 49 out of 55 licensed nonlife insurers, 29 out of 33 licensed MBAs, and 24 out of 28 licensed HMOs, for a total of participation rate of 88.59%, or 132 out of 149 registered firms.

“Despite the large payouts for COVID-19 related claims, the life and nonlife insurance, HMO and MBA industries remain resilient,” Insurance Commissioner Dennis B. Funa said

“While it may be arguable that COVID-19-related claims only account for a small portion of benefits paid by our regulated entities, the impact of these benefit payments was undoubtedly felt by our fellow Filipinos especially when they needed these benefits,” he added.

Of the P2.93 billion in COVID-related payouts made in the first quarter, P1.65 billion or about 56% of the total were for death benefits, while payments made for outpatient benefits were at P594.8 million or 20.31% of the total.

Meanwhile, inpatient claim payments totaled P410.7 million, just 14% of the total.

However, in the terms of number of claims made, out of a total of 206,806 claims, outpatient benefits outpaced other categories at 171,823 claims, followed by 13,020 claims for other benefits, such as emergency care and financial assistance benefits, and 6,518 claims for medical reimbursement benefits.

COVID-19-related claims during this period also exceeded those made in the previous year by 119.95%. A majority of the claims paid by life insurers and MBAs were for death benefits, while most of the payouts by HMOs were for out-patient benefits.

The study also found that as COVID-19 cases increased, related claims also increased. In January, where cases spiked to 700,000, claims paid out for the month was recorded at about P1.2 billion, while in February, where new cases were at 100,000, about P1 billion in claims were paid out.

Meanwhile, in March, when COVID-19 cases went below 100,000, paid claims were only around P700 million.

Since the pandemic started until the end of March this year, total COVID-19-related claims paid by insurance entities reached P19.64 billion.

Broken down, P3.89 billion or 20% was paid in 2020, P12.82 billion or 65% was paid in 2021, and the remaining P2.93 billion was disbursed in the first quarter of 2022.

The life insurance industry paid P10.84 billion in COVID-19-related claims or 55% of the total. This was followed by HMOs that paid out P7.39 billion or 37% of the total. Lastly, MBAs and the nonlife industry paid P882 million and P527 million respectively.

In 2020, HMOs paid the largest amount of COVID claims, totaling P1.91 billion, followed by the life insurance industry with P1.47 billion. MBAs paid P355 million, while the nonlife sector disbursed P160 million.

However, this situation was reversed in 2021, with the life insurance industry paying out P7.59 billion, followed by HMOs at P4.53 billion. MBAs and the nonlife sector paid P478 million and P222 million, respectively.

Mr. Funa noted that the P2.93 billion in claims paid in the first quarter of 2022 was only 2% of the total payments made in 2021. — T.J. Tomas