Monday, November 29, 2010

Volumes can result in reduction in health care costs

Fortune India in their October 2010 issue has covered a detailed write up on Medanta Hospital, Gurgaon and it has some interesting facts.

Medanta has ambitious plan to increase the number of beds ultimately to 1800 beds. This will lead to efficiency in use of equipment / resources and this is the reason why Medanta is charging 15% to 60% lower than what other hospitals are charging. These facts support the fact that Large hospitals can be competitive.

Thursday, October 7, 2010

Heart Diseases are responsible for maximum number of deaths

Civic run Hospitals in Mumbai have compiled data for 2001- mid 2010 period and 97677 persons died during this period due to heart attack/ailments. This is 34% or total deaths across these hospitals over the period.

According to Dr Pavan Kumar Consultant Cardiologist of Lilavati Hospital the reasons for heart attack can be.

• Poor Oral Hygiene
• Malnourishment
• Lack of adequate vitamin B-12/ Folic Acid in the diet
• Social Stress due to work pressure

According to Dr Brian Pinto, another authority and affiliated to Holy Cross Hospital the reasons for heart attack can be

• Not loading much physically active life
• Eating unhealthy foods

Costs related to hospitalization due to heart ailments in good hospitals are high and may be in the range of Rest. 1.50 lakhs to Rs. 5.00 lakhs .This fact should be kept in mind while buying health insurance .Sum assured of Rs. 1.00 lakh may turn out to be too less when the bill comes out to be Rs. 3.50 lakhs or Rs. 5.00 lakhs.

Friday, October 1, 2010

Yes medical expenses can be high

According to news paper reports Punjab Chief Minister medical expenses for 2 months were Rs 85 Lakhs.

This proves that medical expenses can be high. It is better to plan by buying health insurance unless you are a Minister/Chief Minister like Punjab Chief Minister as mentioned in this news.

Saturday, September 4, 2010

Bajaj Allianz has also increased premium rates for Health Insurance.

Bajaj Allianz has also increased premium rates for Health Insurance.

Sometime back Reliance General Insurance Co. Ltd. had increased the premium rates for health insurance.

Bajaj Allianz General Insurance Co. Ltd. has announced increased rates and with this, their rates are 20% higher than that of premium rates of Reliance General.

Let us see comparison of old rates vs. new rates of Bajaj Allianz for a family floater policy where the age of head of the family is 32.

Let us see the comparison of Bajaj Allianz rates with Reliance General/Max Bupa

You may be surprised to see increase of the order of 20% but I was expecting this to happen for quite sometime.

As mentioned earlier in one of my earlier blog no insurance company can go on losing money for a long time as ultimately the shareholders want return on their investment.

As the companies have started getting ready for IPO as well as to release / figures in press (every 6 months) / website (every 3 months) this was expected to happen.

We understand that PSU’s are also going to release new rates where they will call the product as premium product and in this cashless treatment in good hospitals will be permitted. We expect the rates to be at par with rate of Bajaj Allianz General Insurance Co. Ltd. Let us wait for the announcement.

Tuesday, August 17, 2010

Should PSU’s create a common TPA or they should create a stand alone health insurance company?

Should PSU’s create a common TPA or they should create a stand alone health insurance company?

Creation of a common TPA is not looking at the future. The right thing for the PSU’s will be to set up a JV company (ownership being shared by 4PSU companies, may be 25 % each) and then have in house claim settlement department. If Bajaj Allianz, Star and others are having success in house claim settlement department then this company (let us say for discussion sake GIPSA Health Insurance Company Ltd) can also have in house claim settlement department, strong Business Development Department to negotiate with Health Care Providers, Medical Devices Manufacturers, even Pharma suppliers so that they can have economies of procurement, use of technology to best possible extent. With the first year target of Rs 10,000 crores this company will be strong enough to negotiate and emerge the trend setter for growth of health insurance industry in our country. What NTPC did for power generation and BHEL did for Power Generation Equipment can be expected from this strong health insurance company.

We feel JV TPA with any one who is selected will not work as TPA Company (26%) will be the driving force or 4 companies who will jointly own74% .This option is not going to work.

The only successful model will be a stand alone GIPSA Health insurance Company. This strong company manned by those who specialize in health insurance, who are dedicated to make career in health insurance, who have passion for health insurance will be the solution. In 5 yrs this company can reach level of Rs 25,000 crores, may be Rs 40,000 crores.

Wednesday, July 28, 2010

Where to lodge your insurance related grievances?

Where to lodge your grievances?

Various options available with any consumer in India are to lodge complain

1. Grievance cell of Insurance Company (after pre empting your phone calls/ visits to their branch, which issued you the policy )
2. Insurance Ombudsman
3. Consumer Forum (at District level, State level and National level)
4. IRDA, which is the new addition.

We welcome the service started by IRDA. But the question before us is why we should have too many authorities for grievance resolutions.

Is it not the responsibility of the Insurance Company to provide service as a part of the product? Why they do not show the name of Grievance Officer, phone no/email on their website. Why they do not have online grievance lodging facility?

The consumers will like to have the data- how many cases lodged against the company in Consumer Forums? How many have been decided? How many have gone in favour of the insurance company and how many have gone against them?

Should there be a fee for lodging a complaint so that incomplete complaints are neither lodged nor received.

Friday, July 23, 2010

Doctors, not insurance cos & TPA’s will judge urgency of cases

Yes there may be time lag of 10 years in coming of the judgment but it is heartening to note that Maharashtra State Consumer disputes Redressal Commission has agreed that it is the doctor ,who has to decide whether it is emergency or not. It is good that this will not be for TPA’s to decide whether it is emergency or not.

It is interesting to note the observations

“An insurance company’s officials are not experts who can decide whether a particular case is of medical emergency or not, the Maharashtra State Consumer disputes Redressal Commission observed while ordering an insurance company to pay Mediclaim to a Versova resident. It is for the expert doctor in the field to give an opinion if this is case of medical emergency or not, the commission stated in its order. The case dated back to 2000. Shamim Khan was working as a schoolteacher in Jeddah, Saudi Arabia. It was during a visit to India in July 2000 that she suffered unbearable stomach pain that led to severe bleeding.

She also experienced breathing problems and her haemoglobin levels began to drop considerably. Khan was admitted to Bombay Hospital immediately where an emergency surgery was conducted. She was discharged after eight days of stay in the hospital and, after incurring a total expenditure of Rs 41,158, Khan lodged a claim for insurance with the New India Assurance Company Limited from whom she had taken a policy. The policy was in force from April 2000 to March 2001.

Kahn’s claim was, however, rejected on the ground that there was no emergency need to undergo the operation” Aggrieved by the repudiation letter she filed a complaint in a district consumer forum, where the insurance company argued that “she (Khan) knew of the illness even before she came to India and had purchased the policy by suppressing material facts of her illness”, son it had the right to repudiated the in surer pleaded.

Khan had, however, procured a doctor’s certificate to the effect that there was an emergency situation and the doctor was required to operate on her to save her life.

Based on this document, the district forum on July 7, 2007, directed the insurance company to pay the medical claim and also Rs 5000 for causing mental harassment to Khan.

The insurance company then filed an appeal against the order in the state commission. But the state commission agreed with the district forum’s view, saying “doctor’s certificate proved beyond doubt that this was clearly a case of medical emergency”.

The commission, while up holding the order of the district forum, added that the insurance company had wrongly repudiated Khan’s claim.

The order- coming at a time when insurance firms are desperately trying to whittle down expenses on claims –will spread cheer among the insured, feel consumers; organizations.

The name of the insurance company was not mentioned in the news which appeared in a leading newspaper .If you know the name of the insurance company then do let us know.

While we respect and appreciate the judgment –it will be better if the fine imposed on such co is higher, because Rs 5000 is a negligible amount for large insurance companies.

Diabetes and BP can’t be cited to reject claim of health insurance claims

Our health insurance providers have used diabetes and hypertension as 2 holy words to reject the claims of insured persons. It is very interesting to read the following news in The Times of India on July 23, 2010

“In another blow to a medical insurer hell-bent on rejecting a policy holder's claims, a district consumer forum has decreed that a cardiac patient cannot be denied his insurance even if he has not mentioned hypertension and diabetes as pre-existing ailments.

"We have taken the view that, in a large number of cases, diseases like hypertension and diabetes are so common and are always controllable... (so) unless a patient undergoes a long treatment, including hospitalization and undergoes operation in the near proximity of taking the policy (sic), (s/he) cannot be accused of concealment of facts," the forum said, while asking the insurer to honour the policy holder's insurance claims and also pay him Rs. 5,000 as compensation for mental agony.

In 2003, Mulund-based Karunakar Shetty underwent a "coronary arteries bypass grafting" surgery and ran up a bill of Rs 2, 53,553. On July 17, 2003, he intimated Oriental Insurance Company Ltd Co and Raksha TPA. Shetty had taken a policy in 2000 for Rs 3 lakh but, while renewing it in 2002 and 2003, the amount was reduced to Rs 1.5 lakh.

In November 2003, Raksha TPA informed him that his claim was rejected as he was suffering from hypertension even before he took the policy and hid this from the insurance company. Shetty, however, contended that he did not suffer from hypertension before he took the policy and even sent a statement from his family doctor to the insurance company. But they did not reconsider their decision, prompting him to file a complaint in the forum citing deficiency in service.

The insurance company denied the allegations and said that in 2003, while renewing the policy, Shetty mentioned that he did not suffer from any pre-existing disease. It even stated that, when the papers were submitted, the third-party authority got documents from a hospital that said Shetty had told them he was suffering from diabetes for the past four years.

The insurance company alleged that the statement submitted by the family doctor was false and argued that the heart ailment that Shetty suffered from was closely related to diabetes and this was not covered by the policy.
The forum, while passing its order took into account, the hospital discharge card that Shetty had submitted following his treatment in July 2002. From the discharge card and the report submitted by the family doctor it was evident that Shetty was suffering from hypertension and diabetes and he got to know of it only in 2002.

The forum observed that Shetty was unaware of the disease when he took the policy in 2000 and, even if he did not mention it in 2003 while renewing the policy, hypertension and diabetes could not be called ‘pre-existing diseases.’

The forum then directed the insurance company and Raksha TPA to jointly or individually pay Rs 1.5 lakh (the insurance amount) with an interest of 6% from November 2003.”

We would have been happier to know the name of the Insurance company .If you know it then do let us know.

Learning from this case is that client was having complete medical file to fight the case and to prove his point to the consumer forum. We have always suggested to you to maintain your medical file.

Diabetes and BP have been the bottleneck in the growth of health insurance .With a view to follow this judgment in the spirit –why not take a liberal view and increase the number of insured by taking these 2 diseases as a way of life for us.

We honour the judgment and with due respect wish to state that 6 % is too low interest to be paid. This should be 12 % which all of us pay. In fact large insurance companies can pay more than this.

Friday, June 11, 2010

Should you buy insurance from a corporate agent?

Should you buy insurance from a corporate agent?

Yes, you can buy but you must check that it is not one of the 4261 corporate agents whose licence has been cancelled by IRDA, the regulator.

The following news item is an eye opener for those who have to buy the insurance.
“The Insurance Regulatory and Development Authority (IRDA) has said that as many as 4,261 corporate agents, out of the total 7,000 in the country, are not authorized to sell policies from March 31, this year.

The IRDA, which displayed the names of corporate agents that were banned, cautioned the insurance companies and general public not to transact any insurance business through them.

The list of banned agents includes HDFC Bank (General Insurance), Oswal Consultancy, India Bulls Insurance Advisors Pvt Ltd in Mumbai; Prosoft Technologies and Tangent in Bangalore; Rishab Investments and Cosmos Financial Services in Chennai; Pact Brokerage and Atluri Travels in Hyderabad.

"These corporate agencies were due for renewal on or before March 31, 2010 but have not been renewed till date. All these agency licences have been withdrawn," IRDA said in a circular on Tuesday.

According to a senior IRDA official, the policies purchased after March 31 and till date could be valid and the full implications are being worked out.

The business is likely to hit as almost all life and general insurers including Life Insurance Corporation of India engaged these agencies.“

Is it that many of the MLM companies are also affected?

Comments are invited.

Wednesday, June 9, 2010

Lodge your health insurance claim within 7 days Timeframe to Submit documents for filing Health Insurance claims reduced to 7 days from 30 days

You must lodge your health insurance claim within 7 daysTimeframe to Submit documents for filing Health Insurance claims reduced to 7 days from 30 days
You are familiar with the clause which permitted you or expected from you that your health insurance claim should be lodged within 30 days. No one noticed that this clause has been amended to 7 days because claims submitted up to 30 days were continuing to be paid.

Now, in an abrupt move, we understand that insurance companies have suddenly decided to strictly implement the 7 day condition. They have informed the TPAs to treat claims where documents are received after 7 days from the date of discharge as untenable.

You are required to follow this 7 days clause with a view to protect your interest.

We feel that there should be a joint campaign by all insurance companies offering health insurance for the information of policy holders and a separate letter should go to each and every policy holder to make them aware of this clause being implemented.It will keep the number of cases going to Consumer Forum Courts under control.We are sure Consumer Forum Courts will support the policy holders on this issue.

Monday, May 31, 2010

Facts Indian Health Insurance 2010

Facts Indian Health Insurance 2010

IRDA has released statistics pertaining to Indian Health Insurance Industry for the year 2008 -09 and some of the facts are:
This is the truth. If you do not agree the do let us have your comments.

Thursday, May 27, 2010

Health Insurance Policy with sum assured of Rs 50 Lakhs seems to be a favourite number of Indian Insurance Companies – Yes the time has changed

Health Insurance Policy with sum assured of Rs 50 Lakhs seems to be a favourite number of Indian Insurance Companies – Yes the time has changed

Max Bupa made the beginning in our country by coming up with Health Insurance Policy for maximum sum assured of Rs 50 Lakhs and within few weeks it has been able to sell 15 policies. This shows that there was an unfulfilled demand for such product. May be the initial success of this product has appealed so much to other insurance companies that now we hear:

•New India Assurance
•Apollo Munich
•Iffco Tokio

all of them have started working actively for coming up with similar or a competitive product. An improvement being considered by New India is that its product will not be a normal domestic product (only within India) but will also be valid for overseas treatment.

We welcome this move to upgrade the Indian customer by offering premium product to him.

We have questions before us:

(i) Under the name of Medical Tourism USA Insurance Companies are sending their patients to India which shows that Indian Health Care industry has achieved certain level of acceptance in the world and is economical also.

(ii) Under New India policy- will HNI’s of India start going to foreign countries during summer season for treatment under the policy. Will the travel expenses be also paid as part of claim? If we are charging higher premium let us charge something more and include this facility also. This is the wish of many potential customers, who talked to me in last 2 days.

(iii) Is it worth while to have a product where few hundred policies are to be issued during the year? Will these polices be handled by same TPA’s or a special team will be set up.

If you have some more questions do let us know. We will be pleased to have your comments.

Monday, May 17, 2010

Portability of health insurance

As predicted by us vanilla product will be introduced by all general insurance / health insurance companies in near future as the product details are being sent to IRDA. New health insurance product to be sold by all companies will have following features:

Max sum assured – Rs 2 Lakhs only

Preexisting diseases will be covered after 4 years

Max entry age will be 65 years

No claim bonus – Reduced premium or increased sum assured will be given. Companies like Oriental will have to change their policy of not giving benefit to the customers as far as this policy is concerned.

Indicative premium for Rs 1 Lakh – up to age 18 years will be Rs 1000, which means that we are sticking to existing rates. We can expect Rs 1400 for someone who is in the 18 -35 age bracket.

•To be introduced by all companies. We feel Max Bupa may not come out with this product. Let us see what will be the stand of Regulator (IRDA) with respect to this-will Max Bupa be asked to introduce this product ?

Let us see what is the ultimate outcome when the product is introduced?

Our suggestion :

Let all the companies come out with a joint advertising campaign –explain benefits of having health insurance. We should aim for 10 crores policies to be sold under this category. With an average policy size of Rs 2500 this should mean premium of Rs. 25000 crores.

Monday, May 10, 2010

23 Life Insurance Companies are planning to enter India.

23 Life Insurance Companies are planning to enter India.

Many life insurance companies of the worked are planning to enter India.

We under stand the list is of 23 companies and as and when we come to know about more names we will be put the same in our blog.

In addition to this following Health Insurance Companies are also planning to enter

Question before us is – where are the people to manage these companies?

We in Insurance Foundation of India feel that at least 100 Management Schools (out of 1450 operating in India ) should start MBA Insurance as a separate course during 2011 session otherwise shortage of manpower in itself will retard the growth of this industry.

Friday, April 30, 2010

Best policy of today may not remain the best policy after few years

Best policy of today may not remain the best policy after few years

Large number of clients contacts us to know which the best policy is so that they can buy the same. Everyone’s wish is to buy the best. One of the main parameter on which decision is taken is lowest price as on today. Our suggestion is that take broader view of the whole scenario because what is lowest today may not remain lowest after few years. Is it not affect that last year Reliance was having very low premium rates and during April 2010 they suddenly increased the rates by as high as 231%. They are now one of the highest priced one and are 10th position in a list of II. You do not change insurance company frequently therefore let us see some rates as an example,

Premium for family floater policy
(Age of head of the family 35yrs/ 45yrs- 2 Adults+ 2 Children)

Only premium can not be the basis as there are many parameters like issue of policy & ID Cards ,claims settlement, brand goodwill .

Apollo Munich & Max Bupa are 2 companies who do not put a limit on room rent @ 1% of sum assured.
In comparison of Iffco-Tokio vs Apollo Munich you save Rs. 3335 by not taking Apollo Munich as a today. Assuming a claim is lodged and hospitalization is needed for 6 days where room rent is Rs. 7000 per day. You will notice that hospital will charge Rs. 42000. Apollo Munich will pay Rs.4200 where else Iffco-Tokio will pay Rs. 3000x6=Rs.18000. You will have to pay out of your pocket Rs.24000.

At the same time you will notice Apollo Munich which is No. 7 for age 35 yrs becomes No.10. When the head of the family becomes 45 yrs, which means as age will go up Apollo Munich will increase the premium rates at a faster rate.

Is loss making portfolio of Health Insurance repelling foreign companies to enter India.

Is loss making portfolio of Health Insurance repelling foreign companies to enter India.

It is learnt that Religare Health Insurance may go in for 100% Indian owned venture as no agreement could be reached with 4 foreign companies, with whom discussions were being held. Reasons can be:-

1) Is it that delay in increase of foreign equity from 26% to 49% is responsible for this.

2) Is it that foreign companies are finding that losing portfolio of health insurance is going to continue for at least 5 years then why not delay the entry in to India. They may enter when the companies have incurred heavy losses and are in a mood to readjust the pricing.

Your comments are invited.

Monday, April 26, 2010

Cloud results in large number of claims under Overseas Travel Policy on Indian Insurance Companies

Cloud results in large number of claims under Overseas Travel Policy on Indian Insurance Companies

European cloud and consequent disruption of flights has resulted in claims being filled/ lodged by those who had taken overseas travel policies, which also cover the risk delay in flight is covered under this policy.

Large numbers of flights to and from Europe were disrupted for a week due to volcanic dust over the continent.

Overseas travel policies give a maximum cover of $1,000 and are likely to result in good number of claims. They cover claims arising from delay or cancellation of trips due to unavoidable circumstances. Passengers will have to provide their bills to make a claim, say company executives. Other than cancellation of trips, travel insurance policies cover medical insurance, personal accident, check-in delays, loss of passport and baggage loss. Within the package, these claims have individual caps. Some cap check-in delay claims at $200, while all companies have capped the trip cancellation cover at $1,000.

According to Mr. TR Ramalingum said Bajaj Allianz General Insurance’s head of reinsurance.
“We have got some intimations of claim. Policy holders will have to present their bills or relevant papers. Just cancellation of a trip will not lead to reimbursement”

25.46% Growth in New Business of Life insurance industry during 2009-10

25.46% Growth in New Business of Life insurance industry during 2009-10.

The life insurance industry recorded 25.46 per cent increase to touch Rs 1,09,290 crores during the year 2009-10

Private players registered 12.43 per cent growth in the new business premium while state-owned Life Insurance Corporation of India (LIC) posted 33.87 per cent increase in new business income during the year.

SBI Life has emerged the largest private sector insurer in terms of new business premium by overtaking ICICI Prudential.Incidentally this was the year when Shika Sharma left ICICI Pru.

Friday, April 23, 2010

A boon for health coverage after retirement

A boon for health coverage after retirement

Firm offers no-pain switch from company cover

Persons in the age group of 55+ are concerned about health insurance after their retirement, when they will no longer be covered under a company’s group mediclaim policy.

As the competition grows and more and more insurance companies come out with better products with better features- We have the solutions appearance on the horizon.

Apollo Munich has asked for approval from the Insurance Regulatory and Development Authority (IRDA) to launch Optima Vital, a ‘top-up product over corporate medical cover’, convertible to health cover after retirement. To be eligible, one needs to be already covered, as an employee, by an employer-firm and below 58 years of age; if so, the new product gives the option of taking an additional ‘top-up’ coverage to the former, and then, just before completing 58 years (even if the retirement is later), opting to change this into full individual coverage. Apollo would then do so without any extra fee or medical test.

We understand that other insurance companies are developing similar products. And are going to launch the same in near future. The move would help a large number of people who are often denied health cover once they cross 50 years of age. This is despite an Irda directive to insurance companies to increase entry age for cover to 65 years and not to refuse a policy on grounds of age or load senior citizens with extra premium.

Insurance companies are, however, not eager to do so; both fees and tests get stiffer with age, especially after 50 years of age. Usually, if someone wishes to buy health insurance in later life or after retirement, there is a waiting period, or the cover comes after various exclusions on “pre-existing diseases”.

“It is difficult for anyone to go ahead and buy a cover at the age of 58 years. If you buy a top-up cover while working, you will have the option to convert it into a full-fledged policy when you retire, “ said Apollo Munich’s managing director and CEO, Antony Jacob, on the proposed scheme. “It takes away the worry of the person while retiring.”

At present, apart from being reluctant to extend coverage for the elderly, many insurance companies do not even reimburse the cost of medical tests undergone during the process of checking or updating a cover.

Saturday, April 10, 2010

Health Insurance industry estimates show –it has touched Rs 8100 Crores mark during this year (2009-2010)

Health Insurance industry estimates show –it has touched Rs 8100 Crores mark during this year (2009-2010)

Initial statistics for the year 2009-10 (year ending 31st March 2010) indicate that Health Insurance industry has touched figure of Rs 8100 crores. Last year this figure was Rs 6600 crores so it means that there has been growth or 23% during this year. Overall General Insurance Industry during 2009-10 has shown growth of 10% so it is heartening to note that Health portfolio has really contributed to the overall growth or General Insurance Industry.

Health Insurance Companies have also achieved high figures and Star Health and Allied Insurance Company Limited has reached figure of Rs 900 crores (exact figure awaited).This shows that standalone health insurance companies have strength to stand with health being the only portfolio.

On the profitability front the figures continue to be bad as this portfolio is still losing money and one should not be surprised that when all figures are complied then ( proper costing and allocation of overheads is done) then we find that in this portfolio there has been a loss of Rs 2000 crores.

Let us wait for the final figures as these are estimates.

Friday, April 9, 2010

Air ambulance- who will pay for it

Air ambulance- who will pay for it

An interesting news item has appeared in HT- according to which NHAI is planning helipads at a distance of 100 kms. on various Highways going from Delhi to various destinations say Jaipur/Agra/Haridwar/Rohtak. We appreciate the plan as it will save lives of those who get involved in major accidents on highways.

The question arises who will pay for the costs. Questions before us are;
1) If it is free- there is tendency to misuse the facility.
2) Will the pilot be available on 12 hours basis (helicopters do not take off in dark)? Estimate the cost and we know it will be high say Rs 25000 per flying hour and time being counted when it takes off from the base.

Are we expecting that cost will be paid by Insurance Company if some one to be transported has Health Insurance policy? No it is not going to happen as nearly all Insurance policies pay Rs 1000 or so and that too for ambulance only.

There is a silver lining in Platinum product of Max Bupa. If you are insured for Rs 15 Lakhs/ 20 Lakhs/ 50 Lakhs then you are having no limit on ambulance which we are made to understand covers Helicopter evacuation or use of air ambulance.

High profile people or HNI’s will be attracted towards Max Bupa product.

Reliance has great plans – and now we hear Reliance Health Insurance may come

Reliance has great plans – and now we hear Reliance Health Insurance may come.

It is great to see activity in Insurance industry and now we hear that Swiss Re may be the partner in stand alone Health Insurance Company to be set up by Reliance.

We also have been hearing that Reliance Life will also have Swiss Re as the partner.

Reliance General will have Royal Sundaram merging into it- Sun Alliance will become active partner with 26% in Reliance General Insurance Company Ltd

What these developments will mean for customers. ?

Stabilization of premiums for various policies or products at higher level .

You may like to see my other blog regarding increase of health insurance premiums by Reliance General effective April 7 ,2010 by as mush as 231% in some cases

Elbow Replacement – an idea about hospitalization cost

Elbow Replacement – an idea about hospitalization cost

We have been hearing about knee replacement. New we have Elbow Replacement. As the age of Indian people will increase we will have new treatments / surgeries, which will be required. But the fact remains cost will be high and will go on increasing year by year.

If Elbow Replacement is costing Rs 150,000 to Rs 200,000 in 2010 then we have to consider that sum assured should be high at say Rs 3 Lakhs to Rs 5 Lakhs. It will make no sense to have policy for Rs 1 Lakhs.

Reliance increases premium rates for Health Insurance.

In the past customers have enjoyed low premium rates for Health Insurance policy of Reliance General Insurance Co Ltd.

New rates were announced on 7.4.10 ,thes are increased rates and bring premium rates to more or less at par with /premium rates of other Insurance Companies.

Let us see comparision of old rates vs new rates for a family floater policy where the age of head of the family is 32.

You may be surprised to see increase of the order of 221% but I am not at all.

No Insurance Company can go on losing money for a long time as ultimately the shareholders want return on their investment.

As the companies have started getting ready for IPO as well as to release / figures in press( every 6 months) / website( every 3 months ) this was expected to happen.

Thursday, April 1, 2010

Mergers among Insurance Co’s will be good for customers

According to a news item Royal Sundaram Alliance Insurance Company Limited may merge in to Reliance General Insurance Company Limited.

This is because of fact that an entity can not have two insurance companies in India.
We understand that foreign partner of Royal Sundaram Alliance Insurance Company Limited i.e. Sun Alliance wants to invest 26% in Reliance General Insurance Company Limited. Therefore the option being considered is that Sun Alliance will buy Sundaram Group holding and then invest 26% in Reliance General Insurance Company Limited. This means that Royal Sundaram Alliance Insurance Company Limited will merge in to Reliance General Insurance Company Limited.

This will be good for customers as they will become the client of a strong/ large insurance company.

This may impact the customers in a positive manner.

Customers of Royal Sundaram Alliance Insurance Company Limited health Insurance will get Reliance General Insurance Company Limited Policy at lower rates. Let us see the facts;

Age. 32

Sum Assured – Rs. 2 Lakhs
(Inclusive of Service Tax)
Royal Sundaram Alliance Insurance Company Limited Premium - Rs. 2947
Reliance General Insurance Company Limited Premium - Rs. 1680

There will be saving of Rs. 1267

Let us hope for the best.

Monday, March 15, 2010

Let us work for growth of Insurance Companies

Recent news item has criticized life Insurance firms having enrolled housewives, students, chemists, chartered accountants, tax planners, and even grocery stores to generate leads that may turn in to deals/ issue of policies.

Even websites can turn lead generators in a practice that industry officials say forms a part of new business model. A website shares data on its visitors with a private insurer which in turn puts his sales team on the job. The insurance company pays a one time fee only on conversion to business depending on the premium slab. We in IFI agree that the deal or case or proposal should be always closed by a qualified agent or an intermediary so that there is no misselling.

According to the Insurance Regulatory and Development Authority (IRDA), commission can be paid to only to licensed agents. We fully support IRDA viewpoint.

Insurance companies are looking for new ways to reach customers and it should be done/ encouraged as we have to reach the masses all over the country. Penetration has to increase. Let us work for it.