The chairman further added, “I don’t think it will be difficult for us as we are already offering some health products.”
Mediclaim policies, which are indemnity-based health plans, are the best selling health insurance products in the country. However, in 2016, the Insurance Regulatory and Development Authority of India (Irdai) asked life insurers to withdraw indemnity-based health plans from the market. Since then life insurers have been allowed to offer only fixed benefit health plans.
Under indemnity-based health insurance plans, the insurer provides reimbursement of money spent on medical treatment up to the sum insured. For fixed benefit health insurance plans, a fixed amount is paid out of the sum insured for pre-determined diseases or medical conditions.
Recently Debashish is the new chairman of IRDA. panda The U.S. had said that the time has come for life insurers to re-enter the health sector as they gave a mandate to the industry to ensure that every citizen has a health insurance policy by 2030.
However, Panda later clarified that the regulator was only evaluating the pros and cons of allowing life insurance companies to sell health insurance policies and no decision has been taken yet.
Globally, in most markets, life insurers sell health policies.
At present, there are 24.50 lakh life insurance agents in the country, while there are only 3.60 lakh agents in the general and health insurance category. If life insurers are allowed into the health insurance sector, the number of agents will increase by 600 percent, which will significantly increase the reach of health insurance in the country.
However, according to industry watchers, there are some difficulties with the proposal. For example, the claims department in a life insurer is oriented towards payment of claims upon death or maturity of the policy, but health insurance claims are filed by about 7 percent of the insured during the year.
But others contend that life insurance companies already have the necessary infrastructure in terms of distribution and policy servicing to offer these plans. In fact, this is an opportunity to elevate the experience of pre-2016, when these policies were being offered by life insurers.
Although regulations vary from country to country, the concept of composite insurance companies exists in some countries, where life insurance companies are allowed to sell both life and general insurance products.
Over the weekend, national insurer LIC had reported a manifold jump in net income of Rs 682.9 crore in the June quarter, driven by record premium income as against Rs 2.94 crore a year ago.
Profit rose despite the insurer reporting lower margins, which management attributed to changing product mix and booking of less than 50 per cent profit from equities, which declined to Rs 5,076 crore from Rs 11,368 crore in June 2021.
But a record 61 per cent jump in new policy sales buoyed the bottom line, Chairman Kumar told reporters on the earnings call. PTI i am abm ABM