LIC, New India Assurance spar over health biz

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Mumbai, Nov 20: The booming health insurance business in the country has seen two public sector companies, New India Assurance, the largest domestic general insurance company and Life Insurance Corporation, the largest life insurance company in the country fighting to protect their turf in the segment.

Recently, in an interaction with the standing committee on finance in Mumbai, NIA argued that the health insurance segment should be exclusively preserved for general insurers while LIC has taken a stand that services of general insurers in health insurance are not encouraging. LIC also said life insurers were in a better position to manage the business.

According to NIA, the company started the sale of mediclaim policy in the year 1986 and the portfolio, growing at 40% every year, reached Rs 1,209 crore in the year 2007-08 with a coverage of more than 85 lakh people.

“This reveals the confidence of Indians and the capability of our company to cater the requirements of the people. We are of the opinion that health insurance should remain linked to non-life insurance companies,” said NIA in its written statement before the committee.

However, LIC also in a written statement, said that penetration of the health-insurance level when, it was being handled by the general insurers, was not very encouraging.

Health insurance is altogether a different segment and more can be linked to life insurance as it is always linked to life expectancy, changing medical innovations and dynamic medical costs along with possible expenses that may be incurred in case of medical treatment, explained LIC.

The morbidity trends are better understood by life insurers as they were able to provide health insurance in the forms of riders along with some specific health related products.

In the absence of marketing of health schemes by others, till now the general insurers were catering to the health insurance needs of the market to start with medi-claim plans, pointed out LIC.

Health insurance has been a booming business of late as most of the health spending in the country is from out-of-pocket expenses and there is hardly any health insurance cover in the Indian market.

Considering the fact that the scope for health insurance is large, LIC has decided to enter the health insurance segment.