Health insurance premiums in India, particularly in big cities like the capital, New Delhi, could become more expensive as insurers consider the impact of air pollution on policy pricing.
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.
Just this week, the World Air Quality Report 2024 by Swiss air quality technology company IQAir said Delhi remains the most polluted capital city globally, while India ranked as the world's fifth-most polluted country in 2024.
"Air pollution remains a significant health burden in India, reducing life expectancy by an estimated 5.2 years," it said.
According to the report, 13 of the 20 most polluted cities in the world are in India, with Byrnihat — a city on the Assam-Meghalaya border in the northeastern part of the country — having the world's worst air.
Air pollution causes surge in health issues
"Many non-communicable diseases like chronic obstructive pulmonary disease (COPD) and asthma are exacerbated by air pollution," said Manish Sarin, of Reliance General Insurance.
"It will be a good step if insurers factor in air pollution in future health policies. What is more important is that awareness goes up among the public," he added.
Yatharth Garg, fellow at the Insurance Institute of India, shared a similar view.
"There is no denying the fact that air pollution is rising in various metropolitan cities and is one of the factors in rising cases of health problems related to cardiovascular diseases," he told DW.
Garg pointed out that it's up to the insurers to regularly assess the risks and market conditions, and determine the insurance premiums paid by people.
Air pollution's impact on health is well documented, but proving it as the sole or primary driver of a percentage of health insurance claims requires detailed long-term data and studies.
To justify a 10-15% raise in premiums, insurers will have to first update their pricing models to reflect pollution as a risk factor.
"Insurance policies cannot just factor air pollution in a place to increase premiums," Deepak Garg, from the National Insurance Company, told DW, noting that "important factors like age, lifestyle, existing comorbidities of the insurer must be considered."
'An epidemic of lung cancer soon'
In the past two years, hospital admissions in Delhi and surrounding areas saw a significant surge due to severe air pollution.
But the problem is not limited to the capital region alone, as air pollution affects huge swathes of the South Asian country.
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.
"We could be soon seeing an epidemic of lung cancer in India because of air pollution. Not only that, every system in the human body is affected by air pollution," Arvind Kumar, a surgeon who runs a medical non-profit called Lung Care Foundation in India, told DW.
Promilla Butani, a leading New Delhi pediatrician, who also suffers from asthma, dreads the clouds of pollution that blanket India's capital city on a regular basis.
She is excited by the proposal to factor in air pollution in health insurance policies.
"It is a brilliant proposal but how it'll be implemented is what's important and the finer details of the insurance policy need to be spelt out," Bhutani told DW.
Will it force authorities to act on air pollution?
The Insurance Regulatory and Development Authority of India (IRDAI), tasked with overseeing the insurance industry, has yet to take an official stance on the matter.
The agency 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.
Chandra Bhushan, a public policy expert and CEO of International Forum for Environment, Sustainability & Technology, pointed out that if pollution becomes a standard pricing factor, it could reshape the industry, requiring consistent monitoring of Air Quality Index and health trends across India.
"There is now enough evidence that high air pollution is directly linked to diseases and hence health costs. Therefore, for insurance companies to factor in air pollution risk is natural and reasonable," he told DW.
"This means that residents of cities like Delhi will have to pay more for health insurance than residents of cities like Kochi which has cleaner air," he added.
"This should increase pressure on state governments to start giving due importance to air quality improvements."
