If you are persistent you will win

The health insurance claim of Sanjay (name changed) was rejected by the insurance company. Repeated attempts by the insured with insurance company at various levels were not successful. We as Insurance Brokerage Firm advised him to take up the matter with Insurance Ombudsman. The matter took some time as the office of Insurance Ombudsman is having large number of complaints or cases coming up every day. After processing the date were fixed, the case was taken up and finally the insurance company was ordered to pay the claim. We appreciate the persistence effort put in by the insured, which has brought success to him.

Outlook magazine of November 3, 2011 has carried the case of Dr Kunal Saha, a medical doctor working and residing in USA. His wife had died in Kolkatta in 1998 while undergoing treatment. Kunal was convinced that Dr. Sukumar Mukherjee, the top Kolkatta physician who first treated Anuradha, had inflicted on her a massive overdose of Depomedrol, a long acting corticosteroids that went on to play havoc with her immune system; and that the treatment that followed, involving other doctors and the Advanced Medicare Research Institute (AMRI) a reputed private hospital, had been appallingly negligent .Armed with both certainty and rage, Saha, himself, a Kolkatta trained doctor put his peers in the dock.

Saha had too traveled 50 times over 13 years to India to fight the legal battle. I admire this gentleman.

The claim of Saha was for Rs 77 crores but Supreme Court of India delivered a ruling in 2009 which vindicated his struggle. By finding the Kolkatta doctors negligent, it opened the door for compensation order to be passed.

In October 2011, National Consumer Redressal commission has ordered that three Kolkatta doctors who treated Anuradha and AMFI will have to pay Rs 1.73 crores. Net payment after deductions to Saha will be Rs 1.34 crores. According to Dr Kunal Saha the amount spent by him on legal battle has been of the order of Rs 5 crores.

The points coming up before us are;

1. We should be persistent in follow up of our case whether it is Health insurance claim against an Insurance Company or liability claim against someone, who has not performed his duty.

2. Were 3 doctors or AMFI having professional liability cover in 1998 from Insurance Company? If yes will the Insurance Company pay it?

Let us wait and watch.

4 PSU General Insurance Companies to come out with IPO

New India, National, Oriental & United all the 4 PSU General Insurance Companies will be coming out with IPO. Even though some newspapers have written that this is because Government of India is facing financial deficit.

Let us look at the positive aspects of this move of the government;

1. IPO by these strong Insurance Companies will set a healthy record for listing of Insurance Companies in India. It means putting the insurance companies shares on right path i.e. growth 2 or 3 IPO's by Private companies at high premium and then going down on listing or within 2 months of listing would have been disaster.

2. Independent Directors are a requirement of SEBI for listing on Stock Exchange. It means that all the insurance Companies will now become broad based and will start following the rules /concepts of Corporate Governance. It is good for all of us, who are the customers of these Insurance Companies.If you feel that you should be considered for appointment of Independent Director ,this is the time to lobby for it.

3. Listing on Stock Exchange means that name of the company is covered many a times in press/TV so insurance Companies will not have too waste their money on advertising as brand is coming in front of customers on regular basis.

But here is a word of caution. The shares of these companies should not go into the hands of foreign companies because these companies (4 PSU’s) are very valuable because of

1. Real Estate assets( offices/Mumbai Flats owned by New India -thees are worth many many thousands of crores) owned by them. Pvt. Companies are generally operating out of rented buildings.

2. They own valuable investments in stock, accumulated over 40 years.

These shares should go to Indian Citizens who have been the customers of these companies. Therefore I feel;

'Let us write to Finance Minister that 10 % of the equity is reserved for policy holders of the company. We who have been loyal to these 4 companies can get the benefit of appreciation in share price. If you agree make it a point to send a letter to Finance Minister. Let us have this as a campaign.

The insurance watchdog, Insurance Regulatory and Development Authority (IRDA), has asked general insurance companies to honour claims on the compulsory personal accident cover given with their motor insurance policies.

The insurance watchdog, Insurance Regulatory and Development Authority (IRDA), has asked general insurance companies to honour claims on the compulsory personal accident cover given with their motor insurance policies.

Apparently, some claims were being refused on the grounds that nominee details were not filled up by the policyholder. Now, IRDA has directed the insurance companies to make sure that nominee details are incorporated in the proposal form.

We feel that details of the owner can always be put but driver /passengers can go on changing therefore the name of nominee will always be a point of dispute .In the event of death of a person mother or wife( of the deceased) both can claim to be the nominee and who should be given the cheque ? More discussion and clarification is required .

List of Insurance Repositories selected for maintaining the Insurance data in de mat form.

Recently when the claim was lodged for health insurance with a general insurance company then the delay in clearing /payment of the claim was that they had called for original proposal form , which was submitted when the insured had purchased the policy for the firs time i.e. 3 years back . What can be the situation if insured had purchased the policy 15 years back?
We always advise the clients that they should keep all the old policies of health insurance in a file ,as it may be needed in future ,when the claim is lodged.

May be Repositories which will start operations in near future will simplify the whole thing as these will maintain data in de mat form. All of us are hopeful that this will help the insured as well as insurers.

5 companies which have been selected by IRDA for the work of Insurance Repository are;

1. National Securities Depository
2. Central Securities Depository
3.Stock Holding India
4 CAMS
5 Karvy

It is understood that" In principle" approval has been given to them.

Karvy, which is also in the business of insurance distribution, has been asked to keep arms length distance between Insurance Repository and its insurance distribution firm . It is a difficult task but we are sure that IRDA, the regulator will take sufficient precautions so that de mat data is not misused.

Yellow markings in the skin around the eyelids are a warning to you as well as insurer.

Researchers in Denmark have come out with a study after compiling data of 13000 persons and that too over 30 years . According to this those who were having patches, known as xanthelasmata were more likely to have heart attack or even die with it within 10 years.

These spots are deposits of Cholesterol which are soft and painless. They do not interfere with eyesight /vision. People generally go to dermatologists or skin specialists and get these treated.

In this Danish study started in 1970’s 12745 people were in the control group Out of this 4.4% were having xanthelasmata.Over 33 years 1872 had heart attack ,3699 developed heart disease and 8507 had died. The study shows that those with markings were 48% more likely to have heart attack,39% more likely to have heart disease and 14% more likely to die. The heart disease link is more acute for men in 70 to 79 years age group.

May be insurance companies issuing health insurance policies/life insurance policies  will start compiling data on xanthelasmata,come out with corrective steps (medical advice or loading of premium ) and save on costs associated with claims.

Apollo Munich / L & T / Max Bupa- which one is better and why?

Apollo Munich / L & T / Max Bupa- which one is better and why?

These 3 private sector companies are competing for business from premium customers or HNI’s, (high net worth individuals) who are looking for better health insurance products with good and attractive features.

Let us see the comparison ;

L & T is charging premium 72% higher than premium of Apollo Munich or 25% higher than premium of Max Bupa. The additional benefits offered are:

Hospital Cash Benefit – Rs. 6000 (max)
Recovery Benefits – Rs. 10000 (max)
Attendant person payment- Rs. 1000

provided the insured remains in hospital for 10 days or more than that.

At the same time L&T  product is losing on the following point;
No Claim Bonus is 5% vs. 10% being offered by Apollo Munich or Max Bupa.

When I checked up with few customers about their reaction on L& T product then the feedback was “no one is wishing to earn Rs. 17000 by getting hospitalized for 10 days. A person who is well off and can pay higher premium of L&T  is not the one who is looking for payment of Rs. 17000.

Let us see how L&T product will perform in the months to come.

Irda May End Third Party Insurance Pool

The insurance regulator is contemplating scrapping the third party motor pool from which claims of all accident victims are settled, possibly doubling the insurance premium for millions of automobile buyers.

“The industry has been demanding it for sometime,” said Mr. J Hari Narayan, Chairman of the Insurance Regulatory and Development Authority.

“This can be one way of going about it,” Narayan told, after meeting insurance companies during first week of November, 2011

Third party motor pool-a corpus of funds created by general insurance companies- has been opposed by private sector insurers, who allege they are being forced to contribute disproportionately to the corpus.

State-run insurance companies, such as New India Assurance, which dominate auto insurance with nearly half the market share benefit from the pool as the liability is socialized.

Portability of Health Insurance Policy has started on Oct 1, 2011

Today (Oct 1, 2011) is a good day as portability of Health Insurance policy has started on Oct 1, 2011

Our compliments to IRDA for bringing this change.

In case any one of you faces any difficulty please inform us or comment on this blog so that it can be taken up with concerned authorities/Insurance Companies.

We feel with a view to fulfill 45 days condition Insurance Companies should start issuing renewal notice 60 days in advance, because only then the customer can fulfill the procedural requirement.

It is then that customer can make up his mind for portability and submit the following
(a) Portability Form
(b) Portability Form

To new insurance company.

We feel Insurance companies should set up the system to issue receipt so that client can use it for reference. A clarification 15 is calendar days or 15 working days will be appreciated. We assume it is 15 calendar days.

HIV patients will be able to get health insurance policy issued

HIV patients will be able to get health insurance policy issued

Under the present guidelines of various Insurance Companies have not been issuing Health Insurance policies to HIV patients. From time to time we had expressed that insurance policy should be issued to them, with HIV being mentioned as preexisting disease. We always felt that HIV patient can be involved in accident and may need hospitalization. He can also get some disease which has no correlation with HIV.

It is good to know that IRDA has considered this viewpoint favorably and in near future Insurance companies will start issuing policies to HIV patients with HIV being mentioned as preexisting disease.

We feel it is a good gesture of Regulator as well as Insurance Companies.

Names of hospitals deleted from the approval list of hospitals

Names of hospitals deleted from the approval list of hospitals.

Customers have been having grievance that they looked at the hospital list when they decided to buy the health insurance for first time.

After many years say 7 years when the need arose then it is found that name of the hospital is not there. As and when the policy holder asked insurance company about deletion of name of hospital then no satisfactory reply was being given. In fact the stand was that Insurance Company has the right to add or delete the name of any hospital at any time.

(Source Times of India)

But good news is that CIC has asked the insurance company (New India) to give this information.

It is a welcome step.

It is depressing to know that bribe is demanded in a hospital

It is depressing to know that bribe is demanded in a hospital

Reading of this news item (The Times of India) was a great disappointment.

But why it happens? There is urgent need to establish more and more medical colleges/hospitals wish that next budget will bring some proposal which will encourage setting up of medical colleges as will as hospitals.

Be ready to pay Service Tax on health care from next budget (2012)

Be ready to pay Service Tax on health care from next budget (2012). There are clear indications that government is going to impose Service Tax on health insurance from next budget (2012) In case of health care- two options are being considered.

Option 1.

To exclude all services provided by clinical establishments with turnover under Rs.4 crores from the tax. This means that apart from your medical bill at a large private hospital you will also have to pay service tax, which could be 10% of the total amount. The implication of this will be that you should increase sum assured at least by 20% (10% to take care of Service Tax and 10% to take care of inflation).

Option 2.

To leave out hospitals, medical care, diagnostic and paramedical services but tax health check-ups and cosmetic surgery”. After the last budget, the government had deferred a tax on most healthcare facilities in the wake of public protests.

It is bad that only 33% vehicles were insured in India during 2010

We knew the facts that:

1. No commission is being paid to insurance intermediaries on 3rd party premium as a result they do not have any interest or motivation to sell this policy.
2. Private companies generally do not insure vehicles for 3rd party risk.
3. Customers find it is wastage of time in going to branch office of PSU’s for getting policy issued for 3rd policy or even for comprehensive policy for vehicles older than 7 years.
4. If there is break in insurance then rules are so difficult (deposit the money on the same day before 3.45 pm.Assuming th survey was done at 12.30 then you should rush to insurance company branch office to stand in the queue so that premium is deposited by 3.45 pm.When some one asked that earlier the rule was insurance to be done within 24 hours then a person laughed and said “we changed the rules to harass the customers so that they do not come to our offices to insure the vehicles.”

As a result the number of uninsured vehicles has been increasing and the statistics are;

Numbers of policies issued were 3, 74, 59,868
Additional number of policies which could have been issued 750 lakhs

Total premium earned by the industry Rs.12, 041crore
Total premium which could have been earned by the industry Rs.18000 crores (assuming some of these vehicles are old and 3 rd party cover only).

We can say about Delhi as a city or state that Police is happy if the vehicle driver does not have the policy because it gives them an opportunity to make some money on the side.

We feel all insurance companies should issue 3rd party cover. No excuse to Private Companies. No pick and chose to be allowed to them.
No vehicle should be refused insurance by any insurance company. If they refuse then they should give the reason in writing.
Let us go back to issue of policies (break in insurance) within 24 hours of survey being done.

Let us respect Motor Vehicles Act 100%

Are we wasting money/energy on Training Insurance Agents?

Are we wasting money/energy on Training Insurance Agents?

We had predicted 50000 agency managers in life insurance companies will lose their jobs

On an average 20 agents /advisors/financial advisors working for life insurance companies report to 1 agency manager. We had predicted that changes in ULIP and reduction of commission to be paid to intermediaries will result in marginal agents to lose interest opt for cancellation of their license or selling life insurance they will be left with options compelling the insurance company to cancel their license.

Yes this has happened

Source Economic Times

As you will notice from this news time in the Economic Tunis licences of 10.45 lakh agents have been cancelled. It we take the following costs.

1. Recruitment / Selection
2. Advertisement for hiring agents
3. Executive / Managers time in selection / training of agents
4. Cost of logistics – office / conference Room.

We estimate it will add up to Rs.50000/ agent. This means money spent on 10.45 lakh agents resulting in the expenditure of 10.45 Lakh X 50000 = Rs.522500 Lakhs (Rs.5225 crores) has been wasted.

or Rs.52250 crores.

It is a big loss.

Give with one hand –take it away by other hand

Give with one hand –take it away by other hand.

It is very common to hear this type of statement. The same thing was noticed in one of the news item according to which Apollo Munich is going to get approval for health insurance product for senior citizens of any age. This product is going to get approval of IRDA by end of August 2011.

This is one part of the story where it is giving with one hand. The cooling off period will be 1 year or 12 months. This is what we have called is taking away by other hand. We feel Cooling off period of 12 months is totally unreasonable. Which senior citizen will accept this while knowing it? This will encourage tendency for missselling.Let us avoid it .We do hope the regulator will look into this aspect.

Rs 10000 crores underwriting loss by our non life insurance industry during 2010-11 –it needs attention of all of us

Rs 10000 crores underwriting loss by our non life insurance industry during 2010-11 –it needs attention of all of us.

It is disappointing to know that Indian general insurance industry which touched premium figure of Rs 42000 crores during 2010-11 has incurred underwriting loss of R10,000 crore .Does it give a signal that for next 5 years these companies will go on incurring losses.
According to Mr. G Srinivasan, chairman and managing director, United India Insurance, commented that the challenges for both the industry and individual insurance companies are enormous.
Over the years, the general insurance industry may be making underwriting losses but the companies have huge investment income by which they have been able to cover up those losses and have been able to show reasonably sound balance sheet over the years, Srinivasan had said at an event in Mumbai.
“The situation will no longer continue because the quantum of losses are increasing. In 2009-10, the general insurance industry had made an underwriting loss of R5,900 crore, whereas in 2010-11 the estimates is that the industry would cross R10,000 crone underwriting losses. The general industry may have to record net losses in 2010-11,’’ he said.
It will be a good idea to know how many cases( number & Rs. Term) are pending against general insurance companies with the following;
Insurance Ombudsmen
Consumer forums at district,state and national level
Civil courts at district ,High Courts,Supreme Court
The figure will be astonishing.

What is the option before the Insurance Companies;
Refix the premium rates
Use the Insurance Broker firms in a big way
Totally do away with their direct sales force .
Strengthen underwriting team.
Merge with other company
Depending on investment income to show reduced losses or a marginal profit is not for what the promoters entered this business. A weak organization is no good for customers.

Free Medicare to all citizens- Time to introspect.

Free Medicare to all citizens- Time to introspect.

Times of India of Aug 8, 2011 has carried a news item on the concept of free medicare being cnsidered.Part of it is:

“Working towards its aim of providing free healthcare to all, the government is planning a national health entitlement card (NHEC) for every citizen that will guarantee access to a package of essential primary, secondary and tertiary healthcare fully funded by the centre.

The proposal, finalized by a high-powered expert panel of the Planning Commission, talks of covering both in-patient and OPD services free of cost with cashless facility. The health package will focus on the most common and high-impact healthcare requirements.

While the centre will bear the cost of services offered under the national health package, state government can add more services at their own cost. The health services can be availed through public sector and contracted private facilities, including NSOs and non-profit agencies.

Service providers, be it public or private, who accept the health card will not provide any services to those willing to pay additional fees either out-of-pocket or through their privately purchased insurance policies.

This is being done to keep away those who can pay to avail health services.”


This news came on (the same day) when the world was facing crisis due to debt/ deficite Aug 8, 2011 some of the major countries USA, Italy, Portugal, Greece are facing crisis due to Social Insurance/ Social benefits which were provided by those governments to their citizens.

The question before us is we on the right track. Is there any survey on lignor consumption in localities where we have so called BPL families living. Are we supporting them so that they can spend more on lignor, panmasala and gutka.

Let us include OPD in our health insurance policies

Let us include OPD in our health insurance policies.

OPD coverage is equally important. Are we living in mid-eighties when Mediclaim product was developed with coverage for Curative treatment?

The News item as above shows the importance of Diagnostic tests where small amount would have saved pain and agony to Joshi/Mishra, their families and the claim which insurance company will have to pay. Imagine the productivity loss which the employer of Joshi/ Mishra has suffered.

The time has come when we should introduce health insurance which offers OPD coverage.

PNB (Punjab National Bank) is entering Life Insurance but no one is exiting

PNB (Punjab National Bank) is entering Life Insurance but no one is exiting.

In various Blogs we wrote some one is entering and some one is exiting. In MetLife India Insurance Co Ltd no one is exiting but PNB is putting in additional equity. This will result in increase in equity of MetLife .The equity of other partners J& K Bank, Pallonji & MetLife will come down. This may be the case where MetLife share is coming down below 20%.

The equity of PNB will be 30%.

We appreciate ownership of banks rather than Banca Model as when the bank is investor there is a good stability and customers get service on long term basis.

Is it possible to reduce health care costs?

Is it possible to reduce health care costs?

It is very easy to increase costs. The challenge comes when you have to answer question
“Is it possible to reduce health care costs?”

The truth is yes, it can be reduced if Tiger biscuits can be produced packed transported & then sold at retail level at Rs.50 per kgm by a reputed company Brittania- then why it is not possible to reduce costs when it comes to Health care.

In health care economies can be achieved by
(a)Standardision on design of hospitals
(b)Standardisalon on equipments to be procured/ installed
(c)Use of generic medicines vs branded medicines

(d)Effective procurement of equipment/medicines by hospitals forming consortium

We are sure the cost can be brought down by 25% and the benefit can be passed on to the consumers.

Kothari’s may exit and Piramal group may enter ING Vysya Life Insurance

Kothari’s may exit and Piramal group may enter ING Vysya Life Insurance.

Process of coming in and going out of insurance industry continues.

As covered earlier there is a good possibility that Kothari’s who are holding 11.5% share in ING Vysya Life Insurance may sell their shareholding to Piramal group.

Kidnapping & Extortion insurance policy is a good product

Kidnapping & Extortion insurance policy is a good product.

The following news in HT s an eye-opener.

Businessman and HNI’s should go in for Kidnapping & Extortion insurance policy.

Should Railways go in for Insurance Cover?

Should Railways go in for Insurance Cover?

Indian Railways used to have group accident policy to cover accidental deaths due to accidents.

In 2009 they stopped buying the insurance- which means they went in for option of self insurance.

Claims of the order of Rs.150 crores per year have been paid in the recent years.

Is it happening at the cost of Tax Payer’s Money?

As a Corporate Governance exercise the Railways should go in for insurance?

Profit Rule for Life Insurance IPO’s Is Scrapped

Profitability of the Life Insurance Companies was one of the important conditions for coming out with IPO’s. The profitability figure for some of the Insurance Co’s is:

The insurance regulator has scrapped the minimum three-year profitability clause for life insurers to float initial public offerings. This is good news for many companies that would have struggled for a long time for raising the capital.

With this move we can expect more and more life insurance companies to come out with IPO’s and this will give a good boost / growth to Life Insurance Company.

PSU's still retain 59% market share of Indian health insurance market (2010-11) of Rs.11145 crores

PSU's still retain 59% market share of Indian health insurance market (2010-11) of Rs.11145 crores.

The health insurance figures for the year 2010-11 are available and PSU's have achieved premium figure of Rs.6578.64 crores vs Rs.4949.67 crores(2009-10). This is 59.02% market share vs 59.09% market share which was achieved during last year.

Health Insurance Premium of Indian Insurance Companies 2010-11 vs 2009-2010

You will notice that every company has shown growth in business with exception of Chola.

Growth during the year of this portfolio is 33.05% and 5 top insurance companies and their market share are:

ICICI Lombard deserves appreciation for taking up 4th position as a result Oriental is now at 5th position in the list. Star Health has crossed figure of Rs.1000 crores by touching figure of Rs.1232.44 crores.

Our comment is- health insurance is the fastest growing segment but even then a lot is to be achieved as we have large population and it needs to be covered.

Some are going & some are coming

Some are going & some are coming.

Bharti group sold Bharti AXA (both life & non Life) to RIL (Mukesh Ambani Group). DLF Pramerica is being sold to HCL (Shiv Nadar Group). Future Generali (Kishore Biyani Group) is looking for buyers for both of its companies.

After tasting the attraction of Insurance sector many well known names /business houses have decided to leave.

At the same time some are getting in this sector. Mahindra & Mahindra is entering non life business. . Magna is also entering non life. Edelweiss is entering Life business.Religare Health should be operational in near future.

Delegations of many foreign companies have been visiting India frequently and have been looking for partners. Some of these are:
Cigna
United
Discovery
Samsung Fire & Marine
….

Let us welcome those who are entering and bid goodbye to those who have left.

CORIS Gipsa TPA JV is not coming

CORIS Gipsa TPA JV is not coming.

There were indications that CORIS Gipsa TPA JV will become operational by end of 2011 and as a result of the same New/National/Oriental/United (4 PSU’s) will shift their TPA work to the new company.

Tenders were floated and Coris, a French company was selected. Suddenly we find that JV is being dropped. Tendering/Selection process has come under cloud and it was decided by the high ups to avoid negative publicity by dropping this JV.

May be it is the end of the JV idea. Let us wait & watch.

Emphasis is needed on preventive cure

Emphasis is needed on preventive cure.

More and more emphasis needs to be put on preventive cure to reduce hospitalization claims. We always thought that good hygiene is important for healthy life but correlation of brushing teeth twice leading to lower cardiac illness risk is a good and interesting study. This has appeared as a new stem in TOI.

Health Insurance portability is delayed

Health Insurance portability is delayed.

In one of my blog I had written that portability of health insurance is having complexities and it will take much longer time to become effective. We have been advising clients that do not postpone buying of Health Insurance policy for portability conditions to be known and being effective. This has happened as the portability is delayed from July 1, 2011 to Oct 1, 2011.

Frauds have no limit in insurance claims.

Frauds have no limit in insurance claims.

The following news item is an eye opener, where the person concerned tried to have a claim by taking his father’s death and even managing documents required for lodging claim.

The question before us is:

Was the claim lodged with American Insurance Company, who asked the investigator to investigate the case?

Is it that Indians have stared buying life insurance from foreign insurance companies in foreign?

Are the financial results of our General Insurance Companies disappointing?

Are the financial results of our General Insurance Companies disappointing?

Yes, it is disappointing to see that large numbers of General Insurance Companies are incurring losses and heavy losses.

Loss figure leaves impression that claims settlement will be a delayed process and may be you will have to settle with figure of 60% or 70%.
Of claim lodged. This is because of the fact that it is important for insurance companies to pay salaries/ bills/travel expenses and then only they can think of funds availability for payment of claims?

We will be happier to see profit making and financially strong insurance companies.

Healthy long life is good- Are you prepared?

We are living longer and in few years the average age of Indian citizens will touch 75 years or may be 80 years. Are we prepared to live longer but in a healthy way? Have we planned for our health care in the coming years? Very few persons have planned for health care, the fact is that for many age related treatments like hernia, cataract, hysterectomy, knee replacement a person may have to be hospitalized.

What I find is that majority of people have left this important aspect of their life to Almightily, God, Goddess or Guruji in whom they have 100% faith.

Someone may need cataract surgery at 60 years and someone may need it at age of 65 years. If you are going to live till the age of 92 years then you will definitely need hospitalization 2 to 5 times.

The solution lies in buying good health insurance and too where you smile will get claim support with a smile. Avoid disfeatured policies with large number of sub limits/exclusion clauses.

Are the financial results disappointing?

It is a disappointing thing when we see that large insurance companies are incoming losses.

Why you should buy Health Insurance?

1. Good health is most important thing in your life. When you need health care treatment then you must have it, otherwise the whole world seems to be worth nothing to you.

2. Health care costs are increasing due to

• Normal inflation due to increase in petrol costs, electricity costs, taxation, imposition of new levies/taxes.

• Improvement in medical technology results in availability of new equipment, which is better, more accurate in diagnosis. We have moved step by step from x-ray, digital x-ray, CAT scan, MRI, modern models of MRI. More developments will be coming.

• Development of new/better medicines due to application of Biotechnology/ genetics. As high R+D costs are involved and extensive clinical trials cost lot of time/money therefore their price is definitely on the high side in the beginning.

• Highly skilled doctors/nurses/paramedical staff is attracted by developed countries as a result of which health care providers have to increase compensation level to retain the staff.

• Real estate cost is high and is increasing.

All these points indicate/confirm that costs will go up year by year and you have to be prepared for it. We foresee health care costs to go up by 21% in next year.

Many a times I have come across person telling me- I own 3 flats in Gurgaon and if I needed will sell 1 of that to pay for my medical treatment. Reality is that it does not happen. You won’t sell one bathroom of your flat to pay for knee replacement.

You must have a good health insurance policy to take care of your needs.

Some people say that they will go to government or charitable hospital for treatment, when the need arises.

Recently I came across photograph of Safdarjung Hospital, a very famous hospital in New Delhi

The cost of treatment in this hospital may be less but due to excessive pressure to cater to large number of patients you may have to compromise on many things time you should not be surprised if you have to wait for 6 months for MRI test.

Shortage of ventilators has resulted in a stage that attendants or relatives of patients are being asked to pump manual ventilator to revive patients.

You have to make up your mind whether you will like to have good treatment in a good hospital and that too with dignity or you will like to shorten your life. Choice is yours.

Cheapest term insurance and highest claim rejection- A good show

Cheapest term insurance and highest claim rejection- A good show.
Extensive advertising of Aegon Religare for online issue of term insurance policy at cheapest rates has attracted attention of good number of customers.

Priya Kapoor in her article in May 9-15, 2011 issue of Economic Times wealth has given an interesting chart.

Rejection of 45% Life Insurance claims by Aegon Religare is an eye opener and needs attention of all of us. This proves what we have been saying that one should buy policy through an Insurance Brokerage Firm as they will give you professional advice and support you when it comes to lodging of claim.

Insurance Broker Firms deal with all insurance companies and are aware of what is happening in the market? Which company is following what strategy with respect to service/ claim settlement?

Bharti AXA Life Insurance Company may change hands

Bharti AXA Life Insurance Company may change hands.

There is a news going around that

“Mukesh Ambani-controlled Reliance group is planning to foray into the insurance sector, and is in negotiations with Sunil Mittal-led Bharti to buy its stake in its joint venture with Axa, a French financial group.

Our impression is that this will happen with Bharti AXA Life Insurance as well as Bharti AXA General Insurance as both Co’s are having same promoters. Let us wait and watch.

CBSE is going to explore the scope for introducing financial literacy in CBSE syllabi

CBSE is going to explore the scope for introducing financial literacy in CBSE syllabi. The committee appointed by CBSE argued that while subjects like human rights, environmental issues and disaster management have been included in the school curriculum, financial literacy is yet to be included in the school and college curriculum and thus has decided to explore its introduction in CBSE. Insurance is definitely going to be a major part of this course.

We in IFI have been pursing this as one of the project.

“Introduction of Insurance as a subject in Secondary Schools all over the country.

Our representations to the following;
Minister HR, Govt of India (Mr. Kapil Sibal)
Chief Minister, Delhi (Mrs. Shiela Dikshit)
Director of Education, Delhi
+Many others have resulted in building up of public opinion in favor of this decision.

Millions of students passing out of our schools will be in a position to appreciate the importance of insurance.

The contribution of IFI(Insurance Foundation of India) needs appreciation.

Gross Premium Underwritten by General Insurance Companies during 2010-11

Estimates/statistics of premium earned by General Insurance Companies for the year ending March 2011 are available and the overall increase during the year has been 22%.

Four Public sector companies have crossed the figure of Rs.25001 Crores which needs appreciation by all of us. Total premium of all the Pvt Sector companies (2010-11) is Rs.17567 Crores. Public sector vs. put sector share is 59%: 41%.

Comparison of New Business Premium of Life Insurance Companies during FY11 against FY10

Comparison of New Business Premium of Life Insurance Companies during FY11 against FY10

The estimates/statistics of Life Insurance Companies for the year ending March-2011 are available and these are:

In general the companies have shown % increase of 20+% but LIC continues to lead the industry with figure of Rs.86445 Crores. The exception is of Reliance Life whose premium earnings have got reduced by 22.60%. Overall the number of polices issued during the year have come down which is not very encouraging sign. Let us hope in 2011-12-we will see much better growth.

Indian Health Insurance Market- 2010-11

Estimates of Indian Health Insurance Market for the year ending March 31, 2011 are now available and according to it this market has touched figure of Rs. 11000 Crores. Rs. 11000 Crores.

Group Corporate portfolio and Group Government portfolio (Schemes like RSBY,) continue to be a loss making portfolio. Retail portfolio continues to be the group where insurance companies have been successful in reducing the claims figures by following rigid norms. May be the decision of PSU’s to go in for strictness i.e. July 1, 2010 and strengthening of PPN has resulted in good results.

Let us hope that all segments of health insurance portfolio will be profitable in few years.

Health care is achieving new heights in India; let us bring innovative changes in Health Insurance coverage

Successful knee replacement of 93 years patient by team healed by Dr. Raju Vaishya of Apollo Hospital New Delhi needs appreciation. The person who was bed redden for 1 year will be able to walk. What a great feeling of achievement for our health care industry .At the same time let us not forget that most of our health insurance policies come to an end at the age of 75 or 80 years.

According to Dr Raju Vaishya “In India longevity of people is increasing and we now have more people living beyond 70 and soon there will be those who will live beyond 80 years.”

The wish of the clients is that all insurance companies should make health insurance policies renewable till the life of the insured. Some have started doing this .Let us hope that during 2011 all the insurance companies will modify there products.

Are they supporting each other Or are they fighting with each other?

Recently we came across a news item that 64% of the cases which came up before Insurance Ombudsman (located all over the India) was pertaining to health insurance portfolio. Let us look at the facts;

Health Insurance as % of non life insurance portfolio = 32%
Group policies issued under Health Insurance portfolio = 50%
Policies issued to Individual/ Families = 50%

It means policies being issued to Individuals/ Families are only 16% of total non life insurance portfolio.

General impression is that claims arising from group policy get paid because they have the bargaining /negotiating power .It means that Individuals/ Families are the worst sufferers as this is the group which is having claims being disallowed.

The question before us is how many of the dissatisfied customers are able to reach the office of Insurance Ombudsman?

64% figure is really a very high figure .Let us try to look at the reasons for this scenario or why it is so?

There are 3 players.

Role of every player is to provide good service to the customer. When the insured has to go in for hospitalization then each one ( Insurance Company /TPA/Health care Provider ) is trying to pass on the buck to other player as if the objective or job description of each one is who can harass the customer most so that he runs away and forgets about claim .
Health care provider says that this insurance company is blacklisted or this TPA is black listed

TPA says that this health care provider is black listed.

Insurance Company says that they are ready to consider the payment of the claim but it will not be on cashless but on reimbursement basis. This defeats the basic assumption of the client that when the need arises he will be able to have payment coming from insurance company.

We need the change in thinking at all levels.

Is liposuction for obesity – Is it only cosmetic surgery or Is it the need of the day?

Liposuction is a surgery technique which can be used effectively as a treatment for obesity. Is it right to treat it under the head of Cosmetic Surgery and not allow the expenses for claim under health insurance policy. This has been the practice of all insurance companies.

According to Dr. Satish Arolkar, Plastic Surgeon and senior Consultant at the Asian Heart Research Center in Mumbai “There are many who feel that some of the cosmetic procedures should be allowed an insurance cover. Treatments such as liposuction and abdominoplasty should be covered under insurance as they target obesity.”

We know obesity leads to Complication like diabetes, heart aliments, knee replacement and the claims come in the range of Rs 2 to 5 lakhs. Is it that insurance companies are taking a short sighted approach by not allowing liposuction and abdominoplasty?

The earlier we take far sighted view and enlarge the range of our health insurance polices the better it will be.

Is Berkshire Insurance following the right practice in India?

It is interesting to read discussion about Berkshire controversy around hosting a grand get together in a 5 star hotel to those, who buy car insurance through Berkshire India website. It means you buy policy for Rs 2000 and can have benefit of attending a get together (dinner) which may be costing Rs. 3000 to Rs. 4000

Majority of the persons from Insurance Industry have said that what Berkshire is doing is wrong.

Our compliments to Economic Times (Priya as well as Khyati) for raising this issue.

What do you feel?

Berkshire Insurance, Priya as well as Khyati, Economic Times

Ayurveda- The way to reach masses for health care- The time has come to include it in our health insurance Policies

According to Sam Pitroda, Adviser to the Prime Minister of India, “Taking healthcare to the masses will be India’s biggest challenge in the next two decades, and the ancient medicinal system of Ayurveda is the only reliable way of doing so. We can’t adopt the western model- the five-star culture of health delivery system. Health care has to reach the masses,” Sam Pitroda is also chairman of the National Innovation Council, and he made the above mentioned comment while inaugurating Institute of Ayurveda and Integrative Medicine (I-AIM) in Bangalore in March 2011.


Tata Group chairman Ratan Tata inaugurated the 100-bed healthcare centre that aims to integrate traditional medicine with modern health science. The centre is wholly supported by Tata Trusts (Mumbai), the group’s philanthropic arm.

In my various blogs I have covered the point that inclusion or Ayurveda in coverage of health insurance polices at the earliest is desirable. There is some progress in this regard but lot more needs to be done.

When names of Ratan Tata & Pitroda are associated with Ayurveda – what more justification is needed by our insurance companies for inclusion of Ayurveda, as a system to be covered in health insurance policies?

Sam Pitroda, Ratan Tata, Institute of Ayurveda and Integrative Medicine (I-AIM), Ayurveda

Will Nippon Life Insurance entry in Reliance Life Insurance benefit its customers?

Reliance Life Insurance Co. Ltd, the fully-owned insurance firm of Reliance Capital Ltd. on March 14, 2011 signed an agreement to bring in the world’s sixth biggest life insurance firm Nippon Life Insurance Co. as its 26% equity partner for Rs. 3,062 crores. This is the largest foreign direct investment (FDI) in the Indian insurance space. Our compliments to both Nippon as well as Reliance Group.

We got queries from some of the members of IFI wishing to know how they will benefit from this deal.

What I feel is that benefit to the customer will be improvement in service level as Nippon is large Japanese Company and Japanese are known for efficient service to their customers.

As far as selling of shares at premium of 62 to 80% is concerned the benefit goes to Reliance Capital as for every 100 Rs invested by them in last 10 years in Reliance Life they are getting Rs 180 so the parent / holding company of Reliance Life Insurance i.e. Reliance capital is the beneficiary as they are improving their balance sheet and this is the reason that share price of this company has gone up.

It will not affect / improve bonus calculation of the company, which is passed on to policy holders.

Budget 2011- Impact on Insurance/ Health Insurance

Budget 2011- Impact on Insurance/ Health Insurance

Last day of February and people listen to the speech of Finance Minister of India, watch the analysis on TV and read comments in newspaper.

What does it mean to us with respect to Insurance/ Health Insurance

1. All unit linked insurance plans will attract Service Tax so depending upon company/ charges you will definitely pay more. For example, if you paid an annual premium of Rs. 10,000, the service tax (of 10 per cent) charged was Rs. 100. Now, the tax to be paid will be Rs. 150. These charges will be adjusted in the premiums and accordingly the yield will fall as far as you are concerned.

2. Senior Citizens above 80 years will pay no income tax till Rs. 5 Lakh income. It means saving of Rs. 26780 to any one who is above 80 yrs and has income of Rs 5 lakh. It could have been better for FM to give gift of Health Insurance policy for all those who are above 80 years. The same amount would have been given to Insurance Companies and it would have given boost to Health Insurance premium.

3. Service Tax @ 5% will be charged on all services/including diagnostic offered by a hospital or nursing home that has central air-conditioners and has more than 25 beds. This means that service tax will be added in one way or other to pre hospitalization, hospitalization and post hospitalization bills and you will bear it as your insurance limit will be exhausted earlier. Seeing health care inflation and impact of Service Tax the sum assured should be increased by you by 50% this year. It means if your sum assured is Rs 2 lakhs then it is desirable that you should increase it to Rs 3 lakhs.

It the payment is made by TPA/under cash less then Service Tax was already being paid, therefore this seems to be case or double Service Tax.

Let us wait for some more analysis.

Have ULIP changes and reduction in number of agents started affecting revenue of Life Insurance Companies

Have ULIP changes and reduction in number of agents started affecting revenue of Life Insurance Companies

Yes- it is affecting because many companies have shown downfall in first premium income of Life Insurance Company’s during April-Dec, 2010

Growth/ fall in first premium income of Life Insurance Company’s during April-Dec, 2010


Even those companies which are showing growth-may be having it because of single premium policies which are being sold.

We know single premium policy is not something which we can consider as normal long term insurance.

The Emperor of Maladies:A Biography of Cancer

The Emperor of Maladies:A Biography of Cancer

It is nice to know about achievements of some of our youngsters, who went to USA studied, worked, progressed and have brought fame to India.

Dr Siddhartha Mukherjee, author of ‘The Emperor of Maladies: A Biography of Cancer’ is one such person.

He has came out with a 6 point formula to help India control and combat the cancer epidemic and these are:

1.Put in place a strong tobacco control programme
2.Initiate sexual health education to prevent sexually transmitted cancers like cervical and oral
3.Encourage vaccination
4.Conduct mammographyand screening of vulnerable women for breast cancer and those above the age of 50
5.Start screening for and vaccination against Hepatitis B that causes liver cancer
6.Create centralized systems modeled on comprehensive cancer centres in the US that allow researchers to share data and engage in high quality clinical work.

Out of these points 3, 4 & 5 are the ones which can be covered if the patient is covered under preventive care or is eligible for OPD treatment.

Few rupees spent on these by insurance companies can result in saving large number/amount of claim, which becomes payable when the insured has to be treated in specially/super specially hospitals for cancer.

We feel that the time has come to issue health insurance policies with OPD coverage.

Health Cover for all Indians will change the scene

In one of my blog I had suggested that all senior citizens should be asked compulsorily to go in for health insurance.

On the same concept Indian Government is considering to cover all citizens with Health Cover during Five year Plan (2012-2017).

Let us see what it means to you, me or all of us. Different studies may come out with different statistics .If we make some assumptions;
India population: 120 crores
Family size: 5
Households: 24 crores



With growth in population the figure can be Rs 225000crores which is 28 times the present size of health insurance or 7 times the size of general insurance industry.

This is going to give a big boost to healthcare industry and generate employment opportunities.