Friday, April 30, 2010

Is loss making portfolio of Health Insurance repelling foreign companies to enter India.

Is loss making portfolio of Health Insurance repelling foreign companies to enter India.

It is learnt that Religare Health Insurance may go in for 100% Indian owned venture as no agreement could be reached with 4 foreign companies, with whom discussions were being held. Reasons can be:-

1) Is it that delay in increase of foreign equity from 26% to 49% is responsible for this.

2) Is it that foreign companies are finding that losing portfolio of health insurance is going to continue for at least 5 years then why not delay the entry in to India. They may enter when the companies have incurred heavy losses and are in a mood to readjust the pricing.

Your comments are invited.

Best policy of today may not remain the best policy after few years

Best policy of today may not remain the best policy after few years

Large number of clients contacts us to know which the best policy is so that they can buy the same. Everyone’s wish is to buy the best. One of the main parameter on which decision is taken is lowest price as on today. Our suggestion is that take broader view of the whole scenario because what is lowest today may not remain lowest after few years. Is it not affect that last year Reliance was having very low premium rates and during April 2010 they suddenly increased the rates by as high as 231%. They are now one of the highest priced one and are 10th position in a list of II. You do not change insurance company frequently therefore let us see some rates as an example,

Premium for family floater policy
(Age of head of the family 35yrs/ 45yrs- 2 Adults+ 2 Children)

Only premium can not be the basis as there are many parameters like issue of policy & ID Cards ,claims settlement, brand goodwill .

Apollo Munich & Max Bupa are 2 companies who do not put a limit on room rent @ 1% of sum assured.
In comparison of Iffco-Tokio vs Apollo Munich you save Rs. 3335 by not taking Apollo Munich as a today. Assuming a claim is lodged and hospitalization is needed for 6 days where room rent is Rs. 7000 per day. You will notice that hospital will charge Rs. 42000. Apollo Munich will pay Rs.42000 where else Iffco-Tokio will pay Rs. 3000x6=Rs.18000. You will have to pay out of your pocket Rs.24000.

At the same time you will notice Apollo Munich which is No. 7 for age 35 yrs becomes No.10. When the head of the family becomes 45 yrs, which means as age will go up Apollo Munich will increase the premium rates at a faster rate.

Monday, April 26, 2010

Cloud results in large number of claims under Overseas Travel Policy on Indian Insurance Companies

Cloud results in large number of claims under Overseas Travel Policy on Indian Insurance Companies

European cloud and consequent disruption of flights has resulted in claims being filled/ lodged by those who had taken overseas travel policies, which also cover the risk delay in flight is covered under this policy.

Large numbers of flights to and from Europe were disrupted for a week due to volcanic dust over the continent.

Overseas travel policies give a maximum cover of $1,000 and are likely to result in good number of claims. They cover claims arising from delay or cancellation of trips due to unavoidable circumstances. Passengers will have to provide their bills to make a claim, say company executives. Other than cancellation of trips, travel insurance policies cover medical insurance, personal accident, check-in delays, loss of passport and baggage loss. Within the package, these claims have individual caps. Some cap check-in delay claims at $200, while all companies have capped the trip cancellation cover at $1,000.

According to Mr. TR Ramalingum said Bajaj Allianz General Insurance’s head of reinsurance.
“We have got some intimations of claim. Policy holders will have to present their bills or relevant papers. Just cancellation of a trip will not lead to reimbursement”

Friday, April 23, 2010

A boon for health coverage after retirement

A boon for health coverage after retirement

Firm offers no-pain switch from company cover

Persons in the age group of 55+ are concerned about health insurance after their retirement, when they will no longer be covered under a company’s group mediclaim policy.

As the competition grows and more and more insurance companies come out with better products with better features- We have the solutions appearance on the horizon.

Apollo Munich has asked for approval from the Insurance Regulatory and Development Authority (IRDA) to launch Optima Vital, a ‘top-up product over corporate medical cover’, convertible to health cover after retirement. To be eligible, one needs to be already covered, as an employee, by an employer-firm and below 58 years of age; if so, the new product gives the option of taking an additional ‘top-up’ coverage to the former, and then, just before completing 58 years (even if the retirement is later), opting to change this into full individual coverage. Apollo would then do so without any extra fee or medical test.

We understand that other insurance companies are developing similar products. And are going to launch the same in near future. The move would help a large number of people who are often denied health cover once they cross 50 years of age. This is despite an Irda directive to insurance companies to increase entry age for cover to 65 years and not to refuse a policy on grounds of age or load senior citizens with extra premium.

Insurance companies are, however, not eager to do so; both fees and tests get stiffer with age, especially after 50 years of age. Usually, if someone wishes to buy health insurance in later life or after retirement, there is a waiting period, or the cover comes after various exclusions on “pre-existing diseases”.

“It is difficult for anyone to go ahead and buy a cover at the age of 58 years. If you buy a top-up cover while working, you will have the option to convert it into a full-fledged policy when you retire, “ said Apollo Munich’s managing director and CEO, Antony Jacob, on the proposed scheme. “It takes away the worry of the person while retiring.”

At present, apart from being reluctant to extend coverage for the elderly, many insurance companies do not even reimburse the cost of medical tests undergone during the process of checking or updating a cover.

Saturday, April 10, 2010

Health Insurance industry estimates show –it has touched Rs 8100 Crores mark during this year (2009-2010)

Health Insurance industry estimates show –it has touched Rs 8100 Crores mark during this year (2009-2010)

Initial statistics for the year 2009-10 (year ending 31st March 2010) indicate that Health Insurance industry has touched figure of Rs 8100 crores. Last year this figure was Rs 6600 crores so it means that there has been growth or 23% during this year. Overall General Insurance Industry during 2009-10 has shown growth of 10% so it is heartening to note that Health portfolio has really contributed to the overall growth or General Insurance Industry.

Health Insurance Companies have also achieved high figures and Star Health and Allied Insurance Company Limited has reached figure of Rs 900 crores (exact figure awaited).This shows that standalone health insurance companies have strength to stand with health being the only portfolio.

On the profitability front the figures continue to be bad as this portfolio is still losing money and one should not be surprised that when all figures are complied then ( proper costing and allocation of overheads is done) then we find that in this portfolio there has been a loss of Rs 2000 crores.

Let us wait for the final figures as these are estimates.

Friday, April 9, 2010

Air ambulance- who will pay for it

Air ambulance- who will pay for it

An interesting news item has appeared in HT- according to which NHAI is planning helipads at a distance of 100 kms. on various Highways going from Delhi to various destinations say Jaipur/Agra/Haridwar/Rohtak. We appreciate the plan as it will save lives of those who get involved in major accidents on highways.

The question arises who will pay for the costs. Questions before us are;
1) If it is free- there is tendency to misuse the facility.
2) Will the pilot be available on 12 hours basis (helicopters do not take off in dark)? Estimate the cost and we know it will be high say Rs 25000 per flying hour and time being counted when it takes off from the base.

Are we expecting that cost will be paid by Insurance Company if some one to be transported has Health Insurance policy? No it is not going to happen as nearly all Insurance policies pay Rs 1000 or so and that too for ambulance only.

There is a silver lining in Platinum product of Max Bupa. If you are insured for Rs 15 Lakhs/ 20 Lakhs/ 50 Lakhs then you are having no limit on ambulance which we are made to understand covers Helicopter evacuation or use of air ambulance.

High profile people or HNI’s will be attracted towards Max Bupa product.

Reliance has great plans – and now we hear Reliance Health Insurance may come

Reliance has great plans – and now we hear Reliance Health Insurance may come.

It is great to see activity in Insurance industry and now we hear that Swiss Re may be the partner in stand alone Health Insurance Company to be set up by Reliance.

We also have been hearing that Reliance Life will also have Swiss Re as the partner.

Reliance General will have Royal Sundaram merging into it- Sun Alliance will become active partner with 26% in Reliance General Insurance Company Ltd

What these developments will mean for customers. ?

Stabilization of premiums for various policies or products at higher level .

You may like to see my other blog regarding increase of health insurance premiums by Reliance General effective April 7 ,2010 by as mush as 231% in some cases

Elbow Replacement – an idea about hospitalization cost

Elbow Replacement – an idea about hospitalization cost

We have been hearing about knee replacement. New we have Elbow Replacement. As the age of Indian people will increase we will have new treatments / surgeries, which will be required. But the fact remains cost will be high and will go on increasing year by year.

If Elbow Replacement is costing Rs 150,000 to Rs 200,000 in 2010 then we have to consider that sum assured should be high at say Rs 3 Lakhs to Rs 5 Lakhs. It will make no sense to have a policy for Rs 1 Lakh.

Reliance increases premium rates for Health Insurance.

In the past customers have enjoyed low premium rates for Health Insurance policy of Reliance General Insurance Co Ltd.

New rates were announced on 7.4.10 ,thes are increased rates and bring premium rates to more or less at par with /premium rates of other Insurance Companies.

Let us see comparision of old rates vs new rates for a family floater policy where the age of head of the family is 32.

You may be surprised to see increase of the order of 231% but I was expecting this to happen.

No Insurance Company can go on losing money for a long time as ultimately the shareholders want return on their investment.

As the companies have started getting ready for IPO as well as to release / figures in press( every 6 months) / website( every 3 months ) this was expected to happen.