State general insurers are taking the bait and eyeing tie-ups with corporate entities for product distribution. The crux of the problem lies in their lack of sales force unlike Life Insurance Corporation of India which has 8-lakh agents.
Sales had so far been developed through development officers in the four erstwhile subsidiaries of General Insurance Corporation of India.
State general insurers such as United India Insurance, Oriental Insurance Company and National Insurance Company are in talks with leading third-party administrators (TPAs) in the country for distribution of their products. This is in spite of the state insurers' insistance with the regulator that TPAs should not be allowed to distribute health or risk products.
Even as the talks are still in the nascent stage, some of the leading TPAs have been called for a series of interviews by the state insurers, which propose to set up pilot projects in smaller states before appointing TPAs across the country.
State-owned insurance companies intend to tie up with at least two TPAs, and there are some which have proposed zone-wise tie-ups.
The TPA regulations have yet to be finalised by the Insurance Regulatory and Development Authority (IRDA) and gazetted, but many of the state insurers are keen to bring down high claim ratios and improve the Mediclaim services.
They are of the view that through the services of TPAs, this will be possible, said an official from a state general insurance company.
Both the state and the private general insurance firms will outsource the services of TPAs, which will primarily assist them in the policy documentation to customer service including call centre to claim processing to giving the complete MIS reports. Insurers will pass on the day-to-day administrative hassles to the TPAs.
State general insurers have been availing of these services for their overseas mediclaim product. TPAs also pay policyholders for self-insured expenses on behalf of the insurer.
