 "Private general insurers set up in-house TPAs to service claims")
To resolve claims faster, private general insurance companies have set up in-house third-party administrators (TPAs). Insurers said while these claims were usually handled by external TPAs, they were moving to a mechanism through which internal teams would deal with these claims.
Amit Bhandari, vice-president (health underwriting and claims), ICICI Lombard General Insurance, said, “To ensure we are able to fulfil our promise of settling claims in a convenient, hassle free and speedy manner, we decided to develop in-house claim processing capabilities. It has helped us further enhance our quality service standards, leading to huge benefits for the customers. It has also helped bring a greater level of transparency in all our processes and systems, thereby providing better quality of services to our end customers,” he said.
Private general insurers, including ICICI Lombard, Bajaj Allianz General Insurance and HDFC ERGO have their own in-house TPAs. Other private general insurers are setting up a fully integrated internal claims servicing process either by the end of this financial year or the next.
Insurers said when one had an internal TPA, grievances were much lower. “Some of the common issues faced by insurers while working with external TPAs are maintaining transparency and providing superior quality service to customers. Market trends reveal consumers are now looking at insurance companies to provide complete healthcare solution such as wellness services, second opinion and prompt replies on queries related to products, systems and services. These are areas where in-house capabilities help, as TPAs tend to lack direct connection with customers,” said Bhandari.
For servicing each claim, insurers have to pay four to five per cent commission to TPAs. With an in-house TPA, this cost is reduced. “Complaints tend to be higher, with respect to external TPAs. Further, Irda rules have said all claims have to be referred back to the insurer by a TPA. When each claim request needs to be sent back to the company, a TPA’s role is very small,” said a senior official of a private general insurer.
In terms of setting up an internal claims settlement process, Bajaj Allianz General Insurance has been one of the early movers. Suresh Sugathan, head (health insurance), Bajaj Allianz General Insurance, said in-house claims processing was faster and added a personal touch. “We have had an in-house TPA for almost eight years and have been able to offer better services at the right price. We have found grievances are low in the case of in-house processes and this has helped us in analytics, through which we can offer faster quotes to group customers,” he said.
Insurers believe in the next three to five years, all general insurers would have to move to either a completely in-house TPA or a structure in which in-house TPAs handle 75-80 per cent claims, with external TPAs handling the rest. Bhandari said for TPAs to continue, they would have to move up the value chain by striving to improve efficiency and providing seamless service to end consumers.
Some insurers, however, differ. Amarnath Ananthanarayanan, chief executive and managing director, Bharti AXA General Insurance, said with more insurance companies coming into the market, it might not be feasible for each insurer to work independently with a hospital superintendent. He added, “It is on the insurers to ensure the promise of service they make to a customer is delivered by the TPA.” Bharti AXA General Insurance does not have an in-house TPA.
Public general insurers have already mooted a common TPA to handle health claims. This TPA, expected to be operational from January 1, 2014, would have the four public general insurers — New India Assurance, Oriental Insurance, National Insurance and United India Insurance and reinsurer General Insurance Corporation of India (GIC) — as stakeholders. It would be run as a separate corporate entity.
This TPA is aimed at putting an end to large-scale leakages, while settling insurance claims in the health segment.
According to industry players, it is expected this would hasten the claim-settlement process and reduce the claims ratio of insurance companies. It is also likely to reduce costs for these insurance companies, who pay a commission of six per cent of the premiums to TPAs, for settling claims.
Amit Bhandari, vice-president (health underwriting and claims), ICICI Lombard General Insurance, said, “To ensure we are able to fulfil our promise of settling claims in a convenient, hassle free and speedy manner, we decided to develop in-house claim processing capabilities. It has helped us further enhance our quality service standards, leading to huge benefits for the customers. It has also helped bring a greater level of transparency in all our processes and systems, thereby providing better quality of services to our end customers,” he said.
Private general insurers, including ICICI Lombard, Bajaj Allianz General Insurance and HDFC ERGO have their own in-house TPAs. Other private general insurers are setting up a fully integrated internal claims servicing process either by the end of this financial year or the next.
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General insurers engage the services of a TPA licensed with the insurance regulator to service claims related to health insurance policies. The Insurance Regulatory and Development Authority (Irda), in its new health regulations, had said TPAs couldn’t settle or reject claims of an insurance company. The guidelines said they could only handle claims admission and recommend payment of claims to the insurer.
Insurers said when one had an internal TPA, grievances were much lower. “Some of the common issues faced by insurers while working with external TPAs are maintaining transparency and providing superior quality service to customers. Market trends reveal consumers are now looking at insurance companies to provide complete healthcare solution such as wellness services, second opinion and prompt replies on queries related to products, systems and services. These are areas where in-house capabilities help, as TPAs tend to lack direct connection with customers,” said Bhandari.
For servicing each claim, insurers have to pay four to five per cent commission to TPAs. With an in-house TPA, this cost is reduced. “Complaints tend to be higher, with respect to external TPAs. Further, Irda rules have said all claims have to be referred back to the insurer by a TPA. When each claim request needs to be sent back to the company, a TPA’s role is very small,” said a senior official of a private general insurer.
In terms of setting up an internal claims settlement process, Bajaj Allianz General Insurance has been one of the early movers. Suresh Sugathan, head (health insurance), Bajaj Allianz General Insurance, said in-house claims processing was faster and added a personal touch. “We have had an in-house TPA for almost eight years and have been able to offer better services at the right price. We have found grievances are low in the case of in-house processes and this has helped us in analytics, through which we can offer faster quotes to group customers,” he said.
Insurers believe in the next three to five years, all general insurers would have to move to either a completely in-house TPA or a structure in which in-house TPAs handle 75-80 per cent claims, with external TPAs handling the rest. Bhandari said for TPAs to continue, they would have to move up the value chain by striving to improve efficiency and providing seamless service to end consumers.
Some insurers, however, differ. Amarnath Ananthanarayanan, chief executive and managing director, Bharti AXA General Insurance, said with more insurance companies coming into the market, it might not be feasible for each insurer to work independently with a hospital superintendent. He added, “It is on the insurers to ensure the promise of service they make to a customer is delivered by the TPA.” Bharti AXA General Insurance does not have an in-house TPA.
Public general insurers have already mooted a common TPA to handle health claims. This TPA, expected to be operational from January 1, 2014, would have the four public general insurers — New India Assurance, Oriental Insurance, National Insurance and United India Insurance and reinsurer General Insurance Corporation of India (GIC) — as stakeholders. It would be run as a separate corporate entity.
This TPA is aimed at putting an end to large-scale leakages, while settling insurance claims in the health segment.
According to industry players, it is expected this would hasten the claim-settlement process and reduce the claims ratio of insurance companies. It is also likely to reduce costs for these insurance companies, who pay a commission of six per cent of the premiums to TPAs, for settling claims.