Even as the health insurance industry bleeds, Reliance General Insurance plans on growing its health business further, says Rakesh Jain, CEO. In an interview with Vishwanath Nair, he talks about the need for insurance agents in today's business environment and expansion plans in the future. Excerpts:
In an environment where most general insurance players are bleeding in the health segment, your plans are to grow it. What is the reason behind this?
One of the main reasons for higher loss ratios in health insurance is anti-selection and ageing portfolio. Our approach has been to create a portfolio which has a judicious mix of age bands in order to make the entire book sustainable. Towards this end we are putting efforts to attract the young population, especially families, which ensures the entire spectrum of age band gets covered. This helps in reducing incidence rates and moderating claims cost.
There is a perception that hospitals overcharge when it comes to health insurance policy holders. How do you tackle this?
In order to mitigate the discretionary pricing of hospitals we have entered into agreements with service providers where package rates for procedures are pre-agreed and based on realistic costs appropriate to the services being provided. This has moderated the disputes over pricing of medical services and reduced overbilling and benefited the customer as the impact on his sum insured is moderated.
How do you plan to tackle the low penetration of health products in India?
The need for health insurance is high due to consistently increasing health costs. The two hindrances in the penetration of health insurance have been 1) the very generic nature of the available health products. In order to increase penetration and attract the right segment we have started offering features which specifically meet the needs of the customer. 2) The lack of trust factor for claim settlement. Reliance General Insurance has taken an innovative step to offer service guarantee where we assure a defined consequence in the event of variance from our assured standards. This, we feel, will help instill confidence in customers and help increase acceptability of health insurance.
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