Sumit BohraPresident of Insurance Brokers Association of India (IBAI), said that the high level of medical inflation is fueling the increase in premiums of health insurance policies. In conversation with George MathewBohra said 100 per cent FDI in insurance would have a big impact but said it would not be right to allow agents to represent multiple insurers.
Reconciliation of hospital bills through insurance is a tedious process and can take a whole day. How can this delay be avoided or reduced?
Insurance regulator IRDAI requires cashless claims to be settled within an hour and the industry is gearing up to meet the deadline. The new National Health Claims Exchange (NHCX) will help all stakeholders work from a single platform that reduces turnaround time (TAT). (Turnaround time is the time taken to complete the process or request to issue an insurance claim or policy)
It is a common complaint that insurance companies charge exorbitant premiums for health insurance every year. Why is this happening? Should there be a ceiling on premium increases?
The increase in premiums is linked to claims. Medical inflation is on the rise and current inflation is around 14 percent which further fuels the increase in premiums. I want to cap the premiums but this cannot be done unless the hospitals are regulated.
The health cover bill paid by 20 private insurers is between 55-80% of the claimed amount as per IBAI data. Can you explain?
The IBAI Claims Hand Book has two columns – one representing the number of claims settled in numerical terms and the second representing the number of claims settled in terms of value. Settlement of 55-80 percent of claims based on value means that smaller claims are settled faster and higher value claims may take time due to various reasons like higher scrutiny, additional details required from hospitals and customers etc. Short stay.
The government has proposed 100 percent FDI in insurance. If the law is passed, do you think it will have a big impact on the insurance sector? What kind of FDI is expected?
Definitely, it will create a big impact. Allowing 100 per cent FDI will lead to increased competition, improved innovation, economic growth, improved access and more transparency among insurers, giving customers freedom of choice and better service.
This section proposes to allow a composite license for all types of insurance activities. Does it benefit consumers or insurers?
Composite licensing allows insurers to market and sell new products to their customers, reducing acquisition costs. Life insurers, in particular, will be better positioned to underwrite health because they have policyholder underwriting data and are better positioned to underwrite health risk. This move will benefit both insurers and customers.
The government has proposed that insurance agents can serve multiple insurers instead of the current restriction of one insurer. How does it affect the area?
An agent represents an insurer and it is not correct to represent multiple insurers. If one wants to represent multiple insurers, they have to upgrade themselves to IMF (Insurance Marketing Firm) or Insurance Broker and follow the same set of compliance.
How will Bima Sugam affect the insurance sector? Why is there a delay?
Bima Sugam will help the entire ecosystem to transact faster with full transparency and give customers an opportunity to compare, buy through a portal that will reduce TAT and provide better service at competitive prices. Insurance is complex in nature and creating this platform will definitely take some time as there are more than 50 insurers that need to be integrated with different products. The regulator has already selected the CEO and the operation is going on at a fast pace by next April.
GST Council proposes to reduce/eliminate GST on health and term insurance. What is your view? Do you think it should be extended to the entire insurance sector?
This is a good step and if it is done, the burden of common people can be reduced, especially among senior citizens who pay high premium which is in the range of 10-15 percent. In fact, most of the taxpayers do not get exemption under section 80D and 80C after the new tax regime. Hence, GST waiver will be a big relief and may increase further penetration due to reduction in prices.
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