National Insurance Company Ltd (NIC) is eyeing a 20-30 per cent hike in health insurance premiums to overcome the losses incurred in the business.

The public sector insurer has filed its application for revision in prices to the Insurance Regulatory and Development Authority (IRDA).

According to N. S. R. Chandraprasad, Chairman and Managing Director, NIC, was waiting for the insurance regulator’s approval for bringing the price hike into effect.

“We filed an application with the IRDA about a month ago and are waiting for its approval. The prices should go up by 20-30 per cent,” Chandraprasad said.

Health insurance, which currently accounts for nearly 26 per cent of NIC’s total business, will be a major growth driver for the company moving forward, he said. In 2011-12, the health insurance business grew by about 24 per cent to Rs 2,078 crore. The company expects this segment of its business to grow by 20-25 per cent this year.

The high ‘combined ratio’ and rise in medical costs were some of the key reasons for the segment reporting losses, he pointed out. Combined ratio is claims and operating expenses as a percentage of premium income.

“The last time we hiked prices was three-to-four years ago. Medical inflation has gone up substantially during the last few years. A price hike is necessary to make this business viable,” he said.

Trimming losses

NIC aims to tighten its claims process to arrest leakages. “There is a very high claim ratio from group insurance policies. So we are reviewing it periodically and are interacting with service providers. We are also trying to curb frauds and exaggerated claims,” he said.

> shobha.roy@thehindu.co.in

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