The Insurance Regulatory and Development Authority (Irda) is seeking details of the pricing of group medical insurance and has called for a meeting with all non-life insurers next month to address the issue of hefty discounts in this class of business, said an insurance industry official. The regulator is taking action because it wants to ensure that there are no distortions in the premiums paid for individual policies and group policies. Irda chairman TS Vijayan recently said the regulator had received many complaints about the unfair discounts granted on group policies.
G Srinivasan, CMD, New India Assurance (NIA) said his company would follow a more disciplined approach for pricing group health insurance premium. The premium for the group health insurance premium is not adequate now. We would like them improve, he said. Srinivasan said his company is now making efforts to keep a check on health insurance claims. We are now appointing large number of doctors in our company who can supervise the claims in a more professional way, he said.
Despite losses in the group health insurance business, increasing competition among general insurers to boost the top-line has resulted in severe undercutting in the segment with premium rates having declined by 5-10 per cent so far this year. On the other hand, individual health insurance is profitable for most insurers which have been raising premium rates in this class over the last several years.
With higher investment income and reduced claim cost, NIA, the countrys largest non-life insurer, has seen its net profit soaring by 29 per cent to Rs 1,089 crore as against Rs 844 crore in the previous year. The company recorded a global premium income of Rs 14,304 crore as against Rs 12,504 crore, an increase of 14.4 per cent over the previous year.
Srinivasan said NIA is targeting a global premium of Rs 16,500 crore in FY15. We have improved our performance by cutting down our underwriting losses, management expenses and higher investment income. We have also increased our market share to 15.82 per cent during FY14, said Srinivasan.
We expect an economic turnaround during the current fiscal and expect higher premium in health, motor portfolio and project insurance, he said, adding that April 1 renewal has seen flat rates. Global reinsurance rate has fallen due to the influx of third party capital.
Several complaints received
* The Insurance Regulatory and Development Authority is seeking details of the pricing of group medical insurance
* Has called for a meeting with all non-life insurers next month to address the issue of hefty discounts in this class of business