New India to hike health cover rates

Tags: Insurance
New India Assurance Company, the country’s largest non-life insurer, will be increasing the premium rates for its health insurance product. The insurer has filed a revised version of its health insurance policy with an increase in premium rates.

G Srinivasan, chairman and managing director, New India, while announcing the company’s financial results for the first half of the year, said, “Last revision in health insurance premium rates was in 2007. In the past five years, we have not increased the premium on our health insurance product despite medical costs rising by 8-10 per cent annually. Therefore, we have recently filed for revision in the health insurance premium rates with the insurance regulator and are hopeful to launch the (revised health insurance) product soon.”

Srinivasan refused to give details on the amount of revision and the change in the features of the product that will be launched. The insurance company has been able to curtail the loss ratio in the health insurance business to 88 per cent in the first half of the current financial year, from 104 per cent in the same period last year. The firm is targeting to lower the loss ratio in its health portfolio to 80 per cent by the end of this financial year. However, the loss ratios in motor and fire business are rising.

New India Assurance controls around 15 per cent of the insurance market.

Speaking about the plans of the public sector insurers to have a common third-party agent (TPA) company, Srinivasan said, that besides New India Assurance, the other three other general insurers – Oriental Insurance, National Insurance, United India Insurance, domestic reinsurer General Insurance Corporation and public sector behemoth Life Insurance Corporation will have a stake in the company.

“The common TPA company will be launched in four to six months time,” said Srinivasan.

For the first half of FY13 ended September 30, New India reported a 216 per cent rise in net profit at Rs 205.08 crore, compared with a net profit of Rs 95 crore in the same period of FY12. The net profit resulted from profits in its investment income as the company registered an underwriting loss of Rs 1,122 crore for the first half of the FY13, compared with an underwriting loss of Rs 1,069 crore in the same period last year.

For the first half of FY13, its domestic business grew at 15 per cent to almost Rs 5,000 crore and foreign operations saw a growth of 34.14 pr cent. The growth in domestic business came largely from selling retail covers (selling health and motor policies).

The insurance company is targeting to open 300 new offices in the country, of which, it has already opened 264 offices.

falaknaazsyed@mydigitalfc.com

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