Insurance behemoth Life Insurance Corporation (LIC) is keen to re-enter the mediclaim segment as and when the regulator provides clarity on the issue, its chairman has said. “We are already doing a lot of long-term health protection and guaranteed health products. And we are evaluating the suggestion that the regulator Irdai made recently,”
Mediclaim policies, which are indemnity-based health plans, are the best-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. Life insurers since then have been allowed to offer only fixed benefit health plans.
However, Panda later clarified that the regulator was only evaluating the pros and cons of allowing life insurers to sell health insurance policies and that no decision has been taken yet.
Globally, in most markets, life insurers sell health policies.
However, according to industry watchers, there are some difficulties in the proposal. For instance, the claims department in a life insurer is oriented towards payment of the claim on death or policy maturity but health insurance claims are logged by around 7 per cent of the insured during the year.
But others counter that life insurers already have the necessary infrastructure in terms of distribution and policy servicing to offer these plans. In fact, this is an opportunity to further elevate the experience from what it was before 2016 when these policies were being offered by life insurers.
Over the weekend, the national insurer LIC had reported a manifold jump in June quarter net income at Rs 682.9 crore, driven by record premium income, as against a paltry Rs 2.94 crore a year ago.
But a record 61 percent jump in new policy sales buoyed the bottom line, Chairman Kumar had told reporters at the earnings call.