Coronavirus payouts rise to P1.98 billion

INSURANCE PAYOUTS related to the coronavirus disease 2019 (COVID-19) totalled P1.98 billion as of end-September 2020, based on a survey conducted by the Insurance Commission (IC).

Citing the results of its second survey assessing the impact of the COVID-19 pandemic on the insurance sector, the IC reported on Tuesday that payouts jumped from the P326.95 million recorded in the first survey conducted in April 16 to May 8, 2020.

The second round of the survey covered 111 insurance companies from May to Sept. 30, 2020. Of these firms, there were 24 life insurers, 44 nonlife firms, 23 mutual benefit associations (MBAs) and 20 health maintenance organizations (HMOs).

Broken down, total payouts were made up of P1.81 billion in contractual obligations and P284.43 billion paid ex gratia or payments made outside the terms of the policy.

Payouts by the HMO sector accounted for the largest chunk with P1.09 billion or 55% of the total, followed by the life insurance industry with P739.83- million payouts or 37%, MBAs with P219.63 million or 11%, and the nonlife sector with P41.71 million or two percent of the total.

“The reported payment of approximately P2 billion in COVID-19-related claims by the four regulated entities of this Commission, is a clear testament of such regulated entities’ financial resiliency notwithstanding the challenges posed by the pandemic. Such financial resiliency is amplified by the fact that some regulated entities have even gone above and beyond their contractual obligations by paying ex gratia settlements to our fellow Filipinos,” Insurance Commissioner Dennis B. Funa said in the statement.

Based on the type of benefits, most payouts were for outpatient and inpatient claims at P637.9 million (32% of the total) and P588 million (30%), respectively. Payouts for death benefits reached P553.31 million, making up 28% of the total, while other top benefits were personal accident, medical reimbursement, hospital income, travel, critical illness and hospitalization.

HMOs processed 89,536 COVID-19-related claims with a combined value of P867.25 million. The companies reported 98% or 87,813 claims have received payouts so far: P1.02 billion in contractual obligations and P71 million paid ex gratia.

The life insurance sector recorded 19,337 claims valued at P1.05 billion, 84% or 16,164 of which have been paid: P708.51 million based on the policy and P31.32 million paid ex gratia.

Meanwhile, nonlife insurers received 1,731 claims worth P331 million, where only 30% or 521 applications have been paid, with P28.05 million for contractual obligation and P13.66 million ex gratia.

Lastly, the MBA sector reported 5,248 COVID-19-related claims amounting to P109.54 million. Nearly all or 5,244 have been paid both in terms of policy (P51.18 million) and out of policy terms (P52.48 million).

“This commission is confident that the staggering five-fold increase in payment of COVID-19-related claims will serve to inspire consumer confidence in the four respondent industries and educate our fellow Filipinos of the benefits of availing the insurance and HMO products sold by said regulated industries,” Mr. Funa added. — B.M. Laforga