)
According to the Insurance Regulatory and Development Authority’s (Irda) health insurance guidelines, to be categorised as a hospital, it should have at least 10 in-patient beds in towns with less than one million population and 15 in-patient beds in others. The hospital should also have qualified nursing staff and medical practitioners round the clock and a fully-equipped operation theatre. It should also maintain daily records of patients.
Sanjay Datta, head of underwriting and claims at ICICI Lombard General Insurance, said it has tied up with smaller health care chains that meet Irda’s criteria. “This will give a choice to customers who can visit any hospital of their choice,” he added.
According to the company's analysis, the concept of a family doctor is also evolving to primary health chains (PHC).
There has been a higher growth in medical inflation related to reimbursement cases in the non-life industry. Data from ICICI Lombard General Insurance said that in 2012-13, there was a 12 per cent rise in their reimbursement case claims compared to the previous year. Cashless claims saw a 5.1 per cent rise in 2012-13, compared to the previous year.
Due to the increase in medical inflation, combined ratios in the health segment have exceeded 100 per cent for several insurers. Combined ratio, the ratio between premium collected and claims paid, is ideally supposed to be under 100 per cent. Any ratio above 100 per cent shows that a company is making underwriting losses.
Executives from companies said that a category of customers do visit high-end hospitals for small ailments such as fever and minor injuries such as cuts and burns, etc. Due to this, the insurance company has to incur higher costs, since there is no explicit rule in Irda restricting policyholders from going to big hospitals for minor sickness.
“Since customers are not barred from visiting any hospital for a physical illness, we incur higher claims in some cases. Hence, tying up with smaller chains would give them a choice, though we do not force them to visit any one particular medical institution,” said an executive of a general insurer.
Some insurers offer suggestions to visit certain hospitals based on the ailment and client requirement. K G Krishnamoorthy Rao, management and CEO of Future Generali India Insurance, said that the insurer covers smaller hospitals apart from the major hospitals in different regions based on client needs.
The hospitals to be associated with are chosen on the basis of customer demand. S S Gopalarathnam, managing director, Chola MS General Insurance, said it has tied up with more than 2,500 hospitals across 600 towns. This includes hospitals across different categories and sizes and the hospital is selected based on customer demand in any particular area.
The underwriting losses of the non-life insurance companies declined to Rs 6,984 crore in 2012-13 from Rs 8,827 crore in the previous year, according to Irda's annual report for FY13. Public-sector insurers’ losses decreased by 11.79 per cent to Rs 5,142 crore in 2012-13 from Rs 5,829 crore in 2011-12.
The private sector insurers’ losses decreased by 38.55 per cent to Rs 1,843 crore in 2012-13, on the back of reduction in percentage of claims incurred, expenses and unexpired risk reserves as a percentage of net premiums compared to the previous year.
