The audit found that losses from the health insurance business of public sector insurers have either been eliminated, or reduced, particularly in group health insurance, where premium charges were lower and claim expenses compared to retail. was excessive. policies. All the four general insurance companies viz.
Co Ltd (NIACL), United India Insurance Company Limited (UIICL), Oriental Insurance Company Limited (OICL) and National Insurance Company Limited (NICL) have made a consolidated loss of Rs 26,400 crore between 2016-17 and 2020-21, which is Rs. It’s heavy. Companies in the marine, motor and fire insurance sectors made a profit of Rs 7800 crore during this period.
“The combined ratio for the group health insurance segment of PSU insurers ranged from 125%-165%, much higher than the 100% limit set by the Union Finance Ministry. The audit analyzed the TPA-wise allocation of business (annual premium) and TPA-wise claims expense ratio (ICR) and found that all the four PSU insurers gave a TPA (Medi Assist India) the majority of the business (15 %-44% allotted. TPA Pvt Ltd) in spite of high ICR of 100% in claims served by TPAs over a few years. For other TPAs also, the business allocation was either increased or maintained at the same level despite higher ICR in claims served by them in the previous years.
Said in a note.
The objective of the audit was to ascertain whether the PSU insurers had managed health insurance permanently, whether they had an appropriate system for empanelment of Third Party Administrators (TPAs), enrollment of hospitals and for processing and settlement of claims. Is. It also analyzed whether risk underwriting of health insurance policies was done judiciously and appropriate internal control mechanisms were in place to protect revenue.
ICICI Securities said the group health business needs higher pricing which can give a boost to the sector. “The ability to process claims effectively (including verification checks and controls) is a critical business gap that can decide winners in this business. Thus, even if life insurers are to launch health indemnity products, it requires Significant up-gradation of operational and technical capabilities will be required. Without course correction, PSU players may continue to lose market share to well-established private health insurance companies,” said ICICI Securities.