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Buying a new health insurance policy from National Insurance Company Ltd (NIC), or renewing an existing one, could cost you 20-25 per cent more this year. The hike will come into effect during August-September.
“We have recently received the nod from the Insurance Regulatory and Development Authority (IRDA) for hiking our health insurance policy prices by 20-25 per cent,” N.S.R. Chandraprasad, Chairman and Managing Director, NIC, told Business Line .
The Kolkata-based general insurer had, in October last year, sought IRDA’s approval for a 20-30 per cent hike in health insurance premiums to overcome the losses incurred in the business.
Rising costs
A majority of insurance companies have been reporting losses in the health insurance segment resulting from the high ‘combined ratio’ and rise in medical costs.
Private insurers such as ICICI Lombard and Bharti AXA General Insurance had also approached the insurance regulator last year demanding an upward revision in health insurance prices.
“The last revision in our health insurance pricing happened in 2007. Medical inflation has gone up substantially during the last few years. A price hike was necessary to make this business viable,” Chandraprasad said.
Health insurance accounts for nearly 27 per cent of the company’s total business. NIC registered 18-20 per cent growth in the segment in 2012-13. “We are expecting a similar or slightly higher growth this year,” he said. NIC has also been active in the rural areas by providing health cover to people in the below poverty line (BPL) segment.
In 2012-13, NIC implemented the Rashtriya Swasthya Bima Yojana (RSBY) for BPL families in six States — West Bengal, Bihar, Assam, Tripura, Mizoram and Haryana — and insured 1.2 crore people.
Business Growth
NIC is eyeing a 20 per cent growth in premium to Rs 11,000 crore in 2013-14. The general insurer had posted 18 per cent growth in gross written premium at Rs 9,195 crore in 2012-13.
The company is yet to assess the extent of claims from the recent incident of flash floods at Uttarakhand.
“It is too early to assess the losses. It may take a month or so for things to stabilise there and only then will we be able to take stock of things. But we are expecting a good amount of claims to come in on account of business interruption, apart from vehicle and personal accident claims,” he said.
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