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 expanded the scope of their coverage. While they have complied with the file and use system allowed by the regulator i.e, they have informed Irda but did not need to wait for the approvals, the extent of additional coverage is likely to be examined in detail, now. These could create regulatory hazards, said an Irda source.
“Public sector players have gone aggressive with pricing of the product. The public sector players are more focussed about growing the topline and since their premiums are lower than ours, companies looking to reduce their premium expense have moved towards them,” said the head of another leading private sector general insurance company.
He added that private sector players have limitation on such aggressive tactics as they are answerable to their shareholders and such moves have an impact on the profitability.
Running for cover
The 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
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
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