Insurers Pay Out US$1 Billion Over COVID-19By Miriam Bello | Fri, 03/05/2021 - 17:55
Since the beginning of the pandemic, insurance companies in Mexico have included COVID-19 into their policies. By assuming this risk and implications, to date, the insurance sector has paid US$1 billion to face COVID-19. According to Deloitte, aside from this severe leak, the sector also faced business continuity, customer service, claim, valuation of reserves and expense problems affecting financial statements, cash flow and scores from credit agencies.
While the sector experienced growth, the number of insured people in Mexico is still very low. From all the people who have suffered from COVID-19, just 1.31 percent of them had an insurance policy. Still, COVID-19 is the second most expensive claim for AMIS, following hurricane Wilma. Yet, according to public statements made by Vice President of AMIS, Juan Riveroll, the US$1 billion are not a sign of alarm for the sector. This figure, however, is double the amount that AMIS was initially contemplating to pay for COVID-19 claims.
Breaking down the figure, the insurance sector calculates that:
Hospitalization costs are around MX$404,000 (US$18,986)
Ambulatory stays circle around MX$16,363 (US$768.99)
ICU costs escalate to MX$1.1 million (US$51,657.04)
Costs of intubated patients in ICU rise to MX$36 million (US$1.69 million)
Aside from these costs, AMIS expected the insurance sector to grow by a 10 percent. On the subject, Fernando Lledo, Director General of Bupa Mexico, told MBN that companies like the one he leads have indeed grown during the pandemic. “The fact that we are growing in such a closed and demanding niche means that the market is growing a lot,” explained Lledo. He also said that in the coming years, private medicine and insurance companies are going to play a major role in Mexico as “the population has understood that healthcare has to be prioritized.”
Growth in the insurance sector will inevitably impact hospitals. However, this sector perceives a different outcome from COVID-19 insurance growth. According to comments made by Javier Potes, Director General of CMH, to MBN, “Mexico still faces the reality of a 7 percent insurance penetration, mainly due to corporate insurance policies that might not be renewed by the end of the year given the expected increase in premiums for 2021.” Potes explained that this scenario could balance out the expected growth in individual insurance policies, which means the industry would be in the same place as before COVID-19. Potes said that the work of both the insurance and hospital sector is to create a virtuous circle “Our challenge is to create low-cost insurance products supported by quality attention at CMH hospitals.”