As air pollution in India continues to worsen, a growing concern is whether this will impact health insurance premiums. With the World Air Quality Report 2024 estimating a significant health burden, insurers are being urged to factor in air pollution as a risk factor.
Air pollution is a significant health burden in India, reducing life expectancy by an estimated 5.2 years, according to the ‘World Air Quality Report 2024.’ Delhi remains the most polluted capital city globally, while India ranked as the world’s fifth-most polluted country in 2024. The primary problem is airborne particulate matter, especially fine particles that are 2.5 microns or less in diameter, designated as ‘PM 2.5,’ which are small enough to enter air sacs in the lungs.
Air pollution is a significant environmental concern, responsible for an estimated 7 million premature deaths worldwide each year.
It's caused by the release of pollutants into the atmosphere, including particulate matter, nitrogen dioxide, and ozone.
These pollutants can exacerbate respiratory conditions like asthma and contribute to cardiovascular disease.
In addition, air pollution has been linked to cognitive impairment and increased risk of cancer.
The World Health Organization recommends reducing air pollution through measures such as increasing energy efficiency, promoting clean transportation, and enforcing emission standards.
Many non-communicable diseases like chronic obstructive pulmonary disease (COPD) and asthma are exacerbated by air pollution. Experts say that if insurers factor in air pollution in future health policies, it will be a good step towards addressing this issue. However, proving the impact of air pollution as the sole or primary driver of a percentage of health insurance claims requires detailed long-term data and studies.
Discussions are underway to impose a 10-15% increase in premiums for new health insurance policies in Delhi following a surge in pollution-related health claims in 2024. The proposal aims to raise awareness among the public and encourage insurers to regularly assess risks and market conditions.
To justify a 10-15% raise in premiums, insurers will have to first update their pricing models to reflect pollution as a risk factor. Important factors like age, lifestyle, existing comorbidities of the insurer must also be considered. If pollution becomes a standard pricing factor, it could reshape the industry, requiring consistent monitoring of Air Quality Index and health trends across India.
Residents of cities like Delhi will have to pay more for health insurance than residents of cities like Kochi which has cleaner air. This should increase pressure on state governments to start giving due importance to air quality improvements. An epidemic of lung cancer soon could be a reality if air pollution continues to worsen.
The ‘Insurance Regulatory and Development Authority of India (IRDAI)’ is expected to scrutinize the proposal’s long-term impact on the insurance industry and public health policy, weighing whether it encourages insurers to address environmental risks or unfairly penalizes policyholders for systemic issues like pollution.
- dw.com | India: Will air pollution jack up health insurance costs?
- uk.news.yahoo.com | India: Will air pollution jack up health insurance costs?
