Too little info, too much risk - why insurance firms can’t cover Covid-19
Insurance companies are unable to cover the full costs of Covid-19 treatment because there is too little information about the virus to allow firms to price their policies.
General Insurance Association of Malaysia (Piam) chairperson Antony Lee explained today that the “evolving” nature of the pandemic prevented firms from determining the risks...
Insurance companies are unable to cover the full costs of Covid-19 treatment because there is too little information about the virus to allow firms to price their policies.
General Insurance Association of Malaysia (Piam) chairperson Antony Lee explained today that the “evolving” nature of the pandemic prevented firms from determining the risks.
In a BFM 89.9 interview aired this morning, he said insurers need more data to calculate just how much to charge.
“We need data in order to price products. It is very, very difficult to try and guess what the right level is to charge [...]
“It is an evolving situation. Definitely, where there is a need and demand, insurers do step up but unfortunately, this is something we do not know enough about so it is very risky to try and price this appropriately.
“It may well be that at this point in time, the price that comes out ends up being something that is not affordable,” Lee said.
For now, Lee said insurance companies could only afford to offer limited Covid-19 related policies like travel insurance, but not full medical coverage.
“If you are looking at a full-blown cover where we cover absolutely everything from A to Z - that is going to need time, clearly,” he said.
Even with vaccination programmes, insurance firms remain wary as he said not enough was known about Covid-19 vaccines.
“It really depends on the efficacy of the vaccine. We have manufacturers stating what they think (the efficacy) is.
"But don't forget these vaccines have been rapidly tested so they haven't followed the normal procedures of rolling out and developing a vaccine,” he stated.
Then who pays?
Lee’s comments come as the Health Ministry and the private sector discuss how to integrate private hospitals to treat Covid-19 patients.
The government reached out to private hospitals for assistance as public healthcare has become strained by the growing number of cases.
READ MORE: A glimpse of how private sector may be roped into Covid-19 fight
One key contention is what payment options Covid-19 patients will have if treated in private facilities.
Private hospitals argue that insurance firms should cover patients with medical cards but Lee contended today that private hospitals should be the ones “stepping up”.
Insurance plans worldwide generally do not cover pandemic-related risks like those incurred by Covid-19.
Stakeholders will engage in the third round of discussions tomorrow before the public-private integration plan rolls out next week.
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