Shares of New India Assurance gained 10% in Thursday’s session to Rs 255.85 on the Bombay Stock Exchange, when the index rose 0.13%.
After a 25-30% increase in retail health insurance premiums in June, the first in six years, the company, initially slated for revisions in 2020 after a three-year gap, deferred its decision due to the pandemic. Neerja Kapur, chairman and managing director of New India Assurance, told analysts that the insurer is looking to ease the impact on policyholders by implementing smaller, annual increases rather than a substantial adjustment once every three years.
Kapur said the increase in premium is due to a spike in medical inflation and health claims frequency. She said that health claims frequency has gone up due to Covid complications.
“When we increase health insurance premiums by 25-30%, we feel for our policyholders when they come back to us and complain about it,” Kapur said. “We are staggering it over every year and rather than doing a huge increase once in three years, we will be increasing by smaller amounts every year.”
Medical inflation has gone up by 12-13%. To check health insurance premiums, New India Assurance, along with other public sector insurers, has established a preferred provider network with 4,000 hospitals, with special package rates. The insurer is also working on increasing empanelment. To tackle the surge in medical inflation, insurers are tying up for 100% cashless arrangements across a maximum number of hospitals.
While price increase is one corrective action, the insurer is working on a preferred provider network jointly with other three public sector insurance companies – Oriental, National and United – to bring medical claims. Here, the insurers have special package rates with a network of 4,000 hospitals. The insurer has tried to increase the empanelment.The General Insurance Council, under the guidance of the insurance regulator, is working towards achieving 100% cashless tie-up across a wide network of hospitals. There are 30,000 hospitals nationwide. For this, insurers are integrating with the National Health Exchange.
Since the current process of exchanging claims lacks standardisation across the ecosystem with most data exchange occurring through PDF/manual methods and processes vary significantly among insurers, TPAs, and providers leading to high cost of processing each claim, the National Health Authority developed a national health claims exchange (HCX) to enable interoperability of health claims, said the government press release issued in April this year.
