LIC wants to re-enter Mediclaim segment, pending regulatory clarity: LIC Chairman Mr. Kumar
Insurance giant Life Insurance Corporation (LIC) wants to re-enter the health insurance segment as the regulator sheds light on the matter, its chairman said.
“We are already doing a lot of long-term health protection products and guaranteed health products. And we are evaluating the suggestion that regulator Irdai has made recently,” LIC Chairman Mr. R. Kumar told PTI when asked. about it during its earnings call this weekend. .
The president further said, “I don’t think it will be difficult for us because we already offer some of the health products.” Mediclaim policies, which are indemnity-based health plans, are the top-selling health insurance products in the country. However, in 2016, the Insurance Regulatory and Development Authority of India (Irdai) had asked life insurers to withdraw indemnity-based health plans from the market. Since then, life insurers have only been allowed to offer defined benefit health insurance plans.
Under indemnity-based health insurance plans, the insurer reimburses money spent on medical care up to the insured amount. For defined benefit health insurance plans, a fixed amount is deducted from the sum insured for predetermined illnesses or medical conditions.
Recently, new Irdai Chairman Debasish Panda said it was time for life insurers to re-enter the healthcare sector as he had given the industry a mandate to ensure that every citizen has of a health insurance policy by 2030.
However, Mr Panda later clarified that the regulator was only weighing the pros and cons of allowing life insurers to sell health insurance policies and that no decision had yet been made.
Globally, in most markets, life insurers sell health insurance policies.
Currently, there are 24.50 lakh life insurance agents in the country, while there are only 3.60 lakh agents in the general and health insurance category. If life insurers are allowed to enter the health insurance business, the number of agents will increase by 600%, greatly increasing the penetration of health insurance in the country.
However, according to industry observers, there are some difficulties in the proposal. For example, a life insurer’s claims department is geared towards paying claims on death or policy maturity, but health insurance claims are recorded by about 7% of policyholders during the life of the policy. ‘year.
But others counter that life insurers already have the necessary infrastructure in terms of policy distribution and management to offer these plans. In fact, this is an opportunity to make the experience even better than it was before 2016, when these policies were offered by life insurers.
Although regulations vary from country to country, the concept of composite insurance companies exists in some countries where life insurance companies are allowed to sell both life insurance and non-life insurance products. general insurance.
Over the weekend, national insurer LIC reported a multiple increase in June quarter net profit to Rs 682.9 crore, driven by record premium income, from a paltry Rs 2.94 crore a year ago. one year old.
Profit rose despite the insurer’s declining margins, which management attributed to the change in product mix and the booking of less than 50% of equity profit which plunged to Rs 5,076 crore from Rs 11,368 crore in June 2021.
But a record 61% jump in sales of new fonts buoyed the bottom line, Chairman Kumar told reporters during the earnings call.
(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)