KOLKATA: The four public sector non-life companies, which have a 70% share of individual health policies, have received approval from the regulator to raise rates for individual mediclaim policies. Prices are set to rise by 20-30%, depending on the age group of the insured.
While Chennai-based United India brings into effect new rates from this month, Mumbai-headquartered New India Assurance will roll out the new policies from August. Kolkata-based National Insurance (NIC) will revise rates from October and Delhi-based Oriental is also looking at raising rates from the second half.
TOI had reported in its editions dated January 26, 2013, as well as November 22 and July 29, 2012, that general insurers were looking at raising health cover premiums.
National Insurance chairman N S R Chandraprasad said that his company has already got approval from the Insurance Regulatory and Development Authority (IRDA) to revise health insurance premiums.
"We are likely to increase the premium by 25-30% from October this year. Health premium was last revised in 2007. So it was due for long because hospital charges have multiplied many times in the last six years. In fact, the revision should have been more. United India has already revised the rates," Chandraprasad added.
Sources in Oriental Insurance and New India Assurance also said that they have got approval from sector regulator IRDA for the hike in health insurance premium rates. "There will be an increase in health insurance premium rate by at least 25% from October," an Oriental Insurance official added.
The health portfolio accounts for 25-28% of the total portfolio for PSU general insurers. Chandraprasad pointed out that there is no way out but to revise the premium upward as the claims ratio in health segment is very high.
The claims ratio for NIC in health is around 110%. This implies that for every Rs 100 premium income, it has to pay Rs 110 as claim. The average claims ratio in health segment for the general insurance companies is around 100%. "All the PSU general insurance companies are losing money in the health portfolio, so there is no other option but to hike rates," Chandraprasad said.
In group health insurance, NIC general manager Subir Bhattacharyya pointed out that the claims ratio is even higher at 125% as this segment is more prone to claims. The health portfolio of NIC is around Rs 2,561 crore. Health insurers are already putting some loading in group policies in an attempt to bring down the claims ratio.