The government has been watching the financial health of 4 PSU’s (General Insurance Companies ) and has told them they should not offer heavy or aggressive discount on group health policy which is a loss making portfolio . This is an attempt to stem losses of close to Rs 1,500 crore, which these companies have incurred during year ending March 2012.
The move could lead to a higher premium on such policies.
The finance ministry has told generalinsurance companies to revise the premium upwards or stop renewing group health insurance policies to prune their losses, said a finance ministry official. The combined ratio--- claims paid plus other expenses as a percentage of premium earned--- is close to 150% now. The combined loss of state-run firms, mainly on account of such discounts on policies, is estimated to be close to Rs 1,500 crore for FY12. This has prompted the government, the owner of these companies, to issue the directive to cut losses.
It has been noticed that Public sector companies are giving huge discounts to grab market share. So our efforts will be to bring discipline to the group health insurance segment. There should be an audit of individual portfolios so as to ensure that segment-wise there is no loss,” said the official.
What we can expect in near future is:
a) Control on Costs will be brought –use of generic medicines vs branded medicines ,sub limits within the policy ,use of PPN hospitals
b) Non coverage of parents
c) Concept of Co payment may be @ 20%. We foresee this will become a common feature in 2012- 2013
The move could lead to a higher premium on such policies.
The finance ministry has told generalinsurance companies to revise the premium upwards or stop renewing group health insurance policies to prune their losses, said a finance ministry official. The combined ratio--- claims paid plus other expenses as a percentage of premium earned--- is close to 150% now. The combined loss of state-run firms, mainly on account of such discounts on policies, is estimated to be close to Rs 1,500 crore for FY12. This has prompted the government, the owner of these companies, to issue the directive to cut losses.
It has been noticed that Public sector companies are giving huge discounts to grab market share. So our efforts will be to bring discipline to the group health insurance segment. There should be an audit of individual portfolios so as to ensure that segment-wise there is no loss,” said the official.
What we can expect in near future is:
a) Control on Costs will be brought –use of generic medicines vs branded medicines ,sub limits within the policy ,use of PPN hospitals
b) Non coverage of parents
c) Concept of Co payment may be @ 20%. We foresee this will become a common feature in 2012- 2013
