We are pleased to know that MAX has joined hands with BUPA and JV will be taking shape in the coming months.
We are hopeful that with BUPA entry we will be moving away from an era of traditional health insurance products to innovative products offering premium features, ofcourse with corresponding price increase.
International automobile companies are selling premium automobiles to the Indian customers/HNI customers with price ranging from Rs. 20 Lakhs to Rs. 550 Lakhs (insurance premium varying from Rs. 60000 to Rs. 15 Lakhs)
Is it not surprising that we have been selling Health Insurance Policy with sum assured of Rs. 5 Lakhs (rarely Rs. 10 Lakhs) and premium in the range of Rs. 10000 to Rs 15000
The person has his car insured for accidental repairs of Rs. 20 Lakhs or Rs. 80 Lakhs or even Rs. 200 Lakhs but he himself can go in for hospitalization of Rs. 5 Lakhs only.
In one of our blog we wrote that helicopter evacuation is not allowed as a payable expense in the policies being issued. Grand sum of Rs. 1000 is available for ambulance charges.Let us change with time.
Let us hope BUPA and some new entrants will change the rules of the game,
Wednesday, July 16, 2008
Friday, July 11, 2008
Health Insurance is the fastest growing segment of non life/general/health insurance industry of India
In 2005 when we brought out ''Best Guide to Buy Health Insurance'' in the form of book we had predicted that Health Insurance will emerge as an important segment of Indian non life insurance industry.
Even though we never thought that due to detariff the rates for Fire Insurance will go down by 85 to 90%-but we are pleased to note that during 2007 -2008 health insurance premium has grown from Rs 3300 crores to 5000 crores and with growth rate of 50% ,it has emerged as the fastest growing segment of Indian non life insurance industry.
We do hope this segment will now attarct the attention of top management and they will look into various aspects with a view to improve customer satisfaction.
Even though we never thought that due to detariff the rates for Fire Insurance will go down by 85 to 90%-but we are pleased to note that during 2007 -2008 health insurance premium has grown from Rs 3300 crores to 5000 crores and with growth rate of 50% ,it has emerged as the fastest growing segment of Indian non life insurance industry.
We do hope this segment will now attarct the attention of top management and they will look into various aspects with a view to improve customer satisfaction.
Tuesday, June 24, 2008
Money Today June 26 issue has covered health Insurance
22 pages of well researched information in Money Today is welcomed by us as this shows that Health Insurance is getting the importance ,which it deserves.
The good thing is that we have got lot of response thro emails/phone calls and some of the readers of Money Today have raised very interesting and good questions.
We will like to share with Insurance companies that the most important feature the customers are looking for in Health Insurance is good Service.Price is important feature but it is definitely not the first point at time of decision making.
The good thing is that we have got lot of response thro emails/phone calls and some of the readers of Money Today have raised very interesting and good questions.
We will like to share with Insurance companies that the most important feature the customers are looking for in Health Insurance is good Service.Price is important feature but it is definitely not the first point at time of decision making.
Friday, June 20, 2008
Large & strong companies should give 90 days notice and then withdraw any product
Recently we were informed by Reliance General that no more Health Insurance proposal under Gold should be accepted.Reason we are made to understand is that they are having heavy losses in this product.
In the case of silver those wishing to have sum assured of Rs 1 lakh will not be accepted by underwriting team.
Those lodging claim during the year whether claim is accepted or not will have difficulty at the time of renewal.They are warned that well in time thay should look for another insurance company.
Insurance intermediaries go on informing clients about various insurance products to clients.It becomes embarrassing to tell a client that now Reliance or such & such Insurance company has stopped accepting this proposal or has withdrawn this product or is not going to renew your policy as you had lodged a claim during the year.
Let us try to create a positive image of Insurance Industry,which is owned by really large & strong companies or corporate houses of the country.Can we expect that whenever they decide to stop any product they should give at least 90 days notice by releasing an ad in the press ?
Comments are invited.
In the case of silver those wishing to have sum assured of Rs 1 lakh will not be accepted by underwriting team.
Those lodging claim during the year whether claim is accepted or not will have difficulty at the time of renewal.They are warned that well in time thay should look for another insurance company.
Insurance intermediaries go on informing clients about various insurance products to clients.It becomes embarrassing to tell a client that now Reliance or such & such Insurance company has stopped accepting this proposal or has withdrawn this product or is not going to renew your policy as you had lodged a claim during the year.
Let us try to create a positive image of Insurance Industry,which is owned by really large & strong companies or corporate houses of the country.Can we expect that whenever they decide to stop any product they should give at least 90 days notice by releasing an ad in the press ?
Comments are invited.
Friday, May 16, 2008
Should premium be calculated on completed age or running age?
Should premium be calculated on completed age or running age basis?
Most of the Insurance Companies take completed age in calculating premium.
On Aug 16, 2007 New India Assurance Company Ltd. had switched over from completed age to running age concept.
At present this type of information is not advertised in the form of a statutory ad therefore no one comes to know about this.
Mr. B K Shah, a medical practitioner for Mumbai realized the difference due to change over at the time of renewal of his policy and took up matter with New India.
Rucha has written a nice news story on this in Times Business of May 16 and it is as follows;
Insurance firms calculate running age for premium
Senior citizens, who are already grappling with steep premium rate hikes, have yet another reason to be miffed with the controversial health insurance sector. In what could perhaps be a first instance of its kind, last year, a public sector insurer started calculating and charging premium on the basis of an insurance applicant’s running age, against the normal practice of completed age.
Mumbai’s B K Shah, himself a medical practitioner, discovered this when he applied for his Mediclaim policy renewal. “In a nutshell,” says Shah, “When I went for renewal at the New India Assurance Company in October, the policy showed up my age as 74, although it should have been 73....I was told that they had introduced a ‘running age’ concept.” Shah says he thus had to shell out a higher loading (increase) on the premium than if his actual age were taken into account. He paid Rs. 700 extra. “With this additional amount, my renewal premium rose to a total of Rs. 23,052 last year from Rs. 11,053 in 2006.” Subsequently, Shah made a right to information (RTI) application, which confirmed the company had shifted to this structure since August 16, 2007, “as a corporate decision”. Bimalendu Chakrabarti, CMD at New India Assurance, corroborates this development. The RTI document assured that as and when the policy was due for renewal, policyholders would be intimated along with premium calculation. Shah denies receiving any such intimation. The document also mentioned that “the product” was approved by the sectoral watchdog – Insurance Regulatory Development Authority of India (Irda). Shah now approached the Irda to verify the claim. “I received a ridiculous reply that the method of calculating age is an internal underwriting issue to be decided by the concerned insurer.” In the absence of Irda chairman C S Rao, who retired earlier this week, a detailed discussion on the subject was not possible. However, an Irda official admits that the regulator has not issued specific instructions in this regard. “Most companies follow (the concept of) completed age and one follows running age…Companies’ policies are disclosed in their documents.”
Another official adds, “In a detariffed market, the premium has to be decided by the insurance company.”
The ombudsman’s office too washes its hands of the issue. “This is not an area of dispute. We don’t look at issues such as age. We come into the picture only when a claim is denied.” says an official. Blaming this laxity for the situation, K S (Kaka) Samant, general secretary at the General Insurance Pensioners’ Association, Western Zone, says: “Since the Irda has not taken any objection, it is taken as a sign of approval.” The consumer organizations TOI spoke to said this was a case of commercial considerations overriding logic. As Mumbai activist Jehangir Gai asks, “Would someone who is 17 and running 18 be allowed to vote?”
Shah also made RTI requests to other public sector general insurers – Oriental Insurance Company, United India Insurance Company and National Insurance Company. They charge premium according to the applicant’s actual age.
Our comments:
1. If all the Insurance Companies are following one definition/norm then why did New India decide to go it for new definition?
2. Should Insurance companies advertise in the form of a statutory ad so that customers as well as insurance intermediaries are made aware of this type of change?
Your feedback will be appreciated.
Most of the Insurance Companies take completed age in calculating premium.
On Aug 16, 2007 New India Assurance Company Ltd. had switched over from completed age to running age concept.
At present this type of information is not advertised in the form of a statutory ad therefore no one comes to know about this.
Mr. B K Shah, a medical practitioner for Mumbai realized the difference due to change over at the time of renewal of his policy and took up matter with New India.
Rucha has written a nice news story on this in Times Business of May 16 and it is as follows;
Insurance firms calculate running age for premium
Senior citizens, who are already grappling with steep premium rate hikes, have yet another reason to be miffed with the controversial health insurance sector. In what could perhaps be a first instance of its kind, last year, a public sector insurer started calculating and charging premium on the basis of an insurance applicant’s running age, against the normal practice of completed age.
Mumbai’s B K Shah, himself a medical practitioner, discovered this when he applied for his Mediclaim policy renewal. “In a nutshell,” says Shah, “When I went for renewal at the New India Assurance Company in October, the policy showed up my age as 74, although it should have been 73....I was told that they had introduced a ‘running age’ concept.” Shah says he thus had to shell out a higher loading (increase) on the premium than if his actual age were taken into account. He paid Rs. 700 extra. “With this additional amount, my renewal premium rose to a total of Rs. 23,052 last year from Rs. 11,053 in 2006.” Subsequently, Shah made a right to information (RTI) application, which confirmed the company had shifted to this structure since August 16, 2007, “as a corporate decision”. Bimalendu Chakrabarti, CMD at New India Assurance, corroborates this development. The RTI document assured that as and when the policy was due for renewal, policyholders would be intimated along with premium calculation. Shah denies receiving any such intimation. The document also mentioned that “the product” was approved by the sectoral watchdog – Insurance Regulatory Development Authority of India (Irda). Shah now approached the Irda to verify the claim. “I received a ridiculous reply that the method of calculating age is an internal underwriting issue to be decided by the concerned insurer.” In the absence of Irda chairman C S Rao, who retired earlier this week, a detailed discussion on the subject was not possible. However, an Irda official admits that the regulator has not issued specific instructions in this regard. “Most companies follow (the concept of) completed age and one follows running age…Companies’ policies are disclosed in their documents.”
Another official adds, “In a detariffed market, the premium has to be decided by the insurance company.”
The ombudsman’s office too washes its hands of the issue. “This is not an area of dispute. We don’t look at issues such as age. We come into the picture only when a claim is denied.” says an official. Blaming this laxity for the situation, K S (Kaka) Samant, general secretary at the General Insurance Pensioners’ Association, Western Zone, says: “Since the Irda has not taken any objection, it is taken as a sign of approval.” The consumer organizations TOI spoke to said this was a case of commercial considerations overriding logic. As Mumbai activist Jehangir Gai asks, “Would someone who is 17 and running 18 be allowed to vote?”
Shah also made RTI requests to other public sector general insurers – Oriental Insurance Company, United India Insurance Company and National Insurance Company. They charge premium according to the applicant’s actual age.
Our comments:
1. If all the Insurance Companies are following one definition/norm then why did New India decide to go it for new definition?
2. Should Insurance companies advertise in the form of a statutory ad so that customers as well as insurance intermediaries are made aware of this type of change?
Your feedback will be appreciated.
Thursday, May 15, 2008
Punjab, Uttrakhand and Bihar also to cover health insurance of poor families
It is nice to know that more and more poor families are being covered under health insurance policies being issued by state governments and Insuarnce co's.
The contracts have recently been awarded by these states;
Punjab - New India Assurance co. Ltd.
Uttrakhand - United India Insurance Co. Ltd
Bihar - Oriental India Insurance Co. Ltd
The states which have already implemented this policy are Rajasthan, Haryana and Delhi. According to our information these states and concerned insurance co’s have started distribution of smart cards.
Bids are expected from the following states in the coming month or so;
Chhattisgarh
Goa
Gujarat
Jharkhand
Karnataka
Kerala
Maharashtra
Orissa
Tamil Nadu
Uttar Pradesh
West Bengal
The states where Indian Government is giving 90% subsidy are;
All North Eastern states
Jammu & Kashmir.
Mr. Anil Swarup, director general of labour welfare in the ministry of labour and the official in charge of implementing the scheme, said: “We are still in talks with Andhra & Madhya Pradesh governments, who have not taken steps for implementation of this scheme. We understand there are issues over committing 25% towards the premium. Andhra Pradesh already has a health insurance scheme. These states will not be covered in the first year.”
The contracts have recently been awarded by these states;
Punjab - New India Assurance co. Ltd.
Uttrakhand - United India Insurance Co. Ltd
Bihar - Oriental India Insurance Co. Ltd
The states which have already implemented this policy are Rajasthan, Haryana and Delhi. According to our information these states and concerned insurance co’s have started distribution of smart cards.
Bids are expected from the following states in the coming month or so;
Chhattisgarh
Goa
Gujarat
Jharkhand
Karnataka
Kerala
Maharashtra
Orissa
Tamil Nadu
Uttar Pradesh
West Bengal
The states where Indian Government is giving 90% subsidy are;
All North Eastern states
Jammu & Kashmir.
Mr. Anil Swarup, director general of labour welfare in the ministry of labour and the official in charge of implementing the scheme, said: “We are still in talks with Andhra & Madhya Pradesh governments, who have not taken steps for implementation of this scheme. We understand there are issues over committing 25% towards the premium. Andhra Pradesh already has a health insurance scheme. These states will not be covered in the first year.”
Tuesday, May 6, 2008
Contradiction between definition of a family
The Sixth Central Pay Commission (CPC) in its report has said, “Presently, the definition of family for the purposes of LTC includes parents and/or stepmother residing with and wholly dependent on the Government employee. Stepfathers residing with and wholly dependent on the Government employee are denied the benefit available to similarly placed stepmothers. The definition also places an unreasonable restriction in such of those cases where parents, despite not having any source of income and being totally dependent on the Government employees, continue to live in the native place. The parent in such cases are denied the option to travel to the place of posting of the Government official under LTC. The Commission, therefore, recommends that parents and/ or step parents (stepmother and stepfather) who are wholly dependent on the Government employee shall be included in the definition of family for the purpose of LTC irrespective of whether they are residing with the Government employee or not”.
The Sixth CPC has further said, “The definition of dependency is being linked to the minimum family pension for all purposes. Accordingly, all parents and/or step parents whose total income from all sources is less than the minimum family pension prescribed in Central Government and dearness relief thereon would be included in the definition of family for this purpose. The extant conditions in respect of other relations included in the family including married / divorced / abandoned / separated / widowed daughters shall continue without any change”.
Indian insurance industry is not ready to consider many of these relatives as the member of a family when it comes to issue the health insurance .We have instance where a mother wanted to take a policy for unmarried daughter of 27 yrs but the policy was refused as she is over 21 yrs.
It is in the interest of Insurance co’s to broadbase the definition of a family so that no of insured is increased , no of policies to be issued is reduced. This is the only way to be cost effective in handling the business.
The Sixth CPC has further said, “The definition of dependency is being linked to the minimum family pension for all purposes. Accordingly, all parents and/or step parents whose total income from all sources is less than the minimum family pension prescribed in Central Government and dearness relief thereon would be included in the definition of family for this purpose. The extant conditions in respect of other relations included in the family including married / divorced / abandoned / separated / widowed daughters shall continue without any change”.
Indian insurance industry is not ready to consider many of these relatives as the member of a family when it comes to issue the health insurance .We have instance where a mother wanted to take a policy for unmarried daughter of 27 yrs but the policy was refused as she is over 21 yrs.
It is in the interest of Insurance co’s to broadbase the definition of a family so that no of insured is increased , no of policies to be issued is reduced. This is the only way to be cost effective in handling the business.
Subscribe to:
Posts (Atom)
