)
Four general insurers and a national reinsurer are planning to join hands to float a new third-party administrator (TPA) claims processing outfit. The joint venture is expected to start operations by September and the total project outlay is estimated at Rs 200 crore.
“We are in the process of finalising the name for the TPA. Once that is firmed up, we will apply to the Insurance Regulatory and Development Authority for a licence,” said Milind A Kharat, chairman-cum-managing director, United India Insurance Company, one of the four general insurance companies that are part of the venture.
The other partners are: National Insurance Company, New India Assurance Company, Oriental Insurance Company and General Insurance Corporation of India (GIC). The four primary insurers will hold 23.75 per cent stake each and GIC will hold five per cent.
According to Kharat, once the joint venture gets operational, the business will be transferred from the current service providers to the joint venture in a phased manner.
It may be noted at present, the four insurers together earn a premium of around Rs 9,000 crore under their health insurance portfolio and pay a service fee of about five per cent to the TPAs.
According to the insurers, while they sell policies and meet the claims out of their pocket, the TPAs earn the goodwill for settling the claims and blame the insurers for any delays.
With in-house claims processing, insurers will be in a position to leverage the combined strength to negotiate better rates with the hospitals and it will also bring down the claim ratio, said Kharat.
He added the companies will not move its middle or lower management level people to the new company.
