Insurers pay out P327 million COVID claims

MANILA, Philippines — Insurers, mutual benefit associations (MBAs) and health maintenance organizations (HMOs) paid out P326.95 million worth of benefits to clients who were affected by the COVID-19 pandemic, the Insurance Commission (IC) said.

Based on a survey conducted by the IC on the impact of COVID-19, life insurance and non-life insurance companies, MBAs and HMOs received P308.16 million worth of COVID-19 related claims since the pandemic broke out in the Philippines.

However, regulated entities said they paid more than this amount, as they settled P307.26 million in contractual obligations and P19.68 million in ex gratia payment, bringing total COVID-19-related payouts to P326.95 million.

Insurance Commissioner Dennis Funa said this reflected the resiliency of IC-regulated entities in the face of the health crisis and their responsiveness to the needs of the insuring public, which may later on translate into heightened consumer confidence.

“According to survey results, life and non-life insurance companies, MBAs, and HMOs all have displayed financial resiliency in the handling and payout of COVID-19-related claims. The respondents honored their contractual obligations to their customers, and some have even gone above and beyond said obligations by paying ex gratia settlements,” Funa said.

“The survey has also displayed the responsiveness of, and consumer benefit provided by health insurance and HMO agreements with pandemic cover, specifically in addressing costs incurred by an individual infected by COVID-19. This may be said to inspire consumer confidence in the four respondent industries, which may later translate into an increase in the number of Filipinos covered by insurance and HMO contracts,” he added.

According to the IC, pandemic-related claims were classified into three categories, namely, medical benefits (in-patient and out-patient benefits, medical reimbursements, daily hospitalization benefits, and critical illness benefits); death benefits; and other benefits (travel inconvenience, travel cancellations and delays, and cash assistance).

The IC said bulk of the total payouts were medical benefits, which reached P258.8 million.

Death benefit payments amounted to P61.54 million, while other benefits reached P6.61 million.

By industry, IC said the 18 out of 30 life insurance companies received 887 COVID-19 related claims, translating to an amount of P188.19 million. Approximately 41 percent of this amount has been paid already.

Seven non-life insurance firms also reported 444 pandemic-related claims amounting to P25 million. These companies paid out P15.91 million in contractual obligations and P8.89 million in ex gratia benefits.

IC said five MBAs received 104 COVID-19-related claims amounting to P2.37 million, 100 percent of which has already been paid. One MBA reported out P185,000 in cash assistance to its members who were quarantined in various facilities.

On the other hand, 14 HMOs received 2,514 claims equivalent to P92.56 million.

“However, the survey answers also revealed that the total COVID-19-related benefits paid have reached P221.29 million for contractual claims and P10.46 million for ex gratia payments. As of the date of this writing, the respondents have not yet clarified this discrepancy,” the IC said.

IC’s survey, which was conducted from April 16 to May 8, was participated by 142 regulated entities (out of 147), with 100 percent participation from the life insurance and MBA sectors, 96 percent in the non-life and 89 percent in the HMO industry.

Survey was designed to assess the financial impact of the COVID-19 pandemic and to determine how IC-regulated entities have responded to pandemic-related claims.

IC noted that 93 respondents expressed willingness to provide coverage for pandemic cases in the future, as they believe they have an obligation to provide this kind of assistance to their clients in times of need.