The four public sector general insurance companies have made a killing in the new year garnering a massive swing in group medical cover business away from the private sector companies.
These companies have managed to rope in most of the big-ticket corporate clients for their group mediclaim insurance to move premiums worth close to Rs 1,000 crore. The large scale shift has caught the attention of the sector regulator too. The numbers are sizable enough to change the rankings in the insurance business by premium income generated.
For instance, over 2013 ICICI Lombard had been reducing the distance between itself and Oriental Insurance, the smallest of the four public sector insurance companies. This will now revert back to the normal pecking order.
In the general insurance business renewal of premiums happen towards the end of the calendar year. This year, sources close to the development told The Indian Express that the public sector insurers had gone aggressive and offered very low rates to get the business, notably from staff heavy information technology companies.
“They have been trying to corner group health insurance schemes and have been on a lookout for big premiums,” said the CEO of a leading private sector general insurance company. He told that big corporate clients such as Accenture, SAIL and Wipro have moved the group medical cover for their employees from private sector player to the public sector player on account of this aggressive pricing.
Sources told that the premium size of Accenture amounted to close to Rs 40 crore while that of SAIL amounted to Rs 75 crore.
Sail recently moved its group insurance cover from Bajaj Allianz General Insurance to National Insurance company.
The move by the state owned insurers is meant to cover the losses they have suffered on motor insurance premium especially third party which they have to pick up as no one else does so. The losses from the business has forced the sector regulator to hike the pooled risk cover for the business by making private sector companies too chip in.
The other inducements offered by these public sector companies in the mediclaim business has been to offer a far larger scale for coverage of diseases. In group mediclaim insurance business Insurance Regulatory Development Authority gives more freedom to the insurer and the insured companies to negotiate the extent of the cover. New India Assurance, National Insurance Company, Oriental Insurance and United India have