The Hindu Business Line : `Health insurance sector is anaemic'

(From right) Mr C.S. Rao, Chairman, Insurance Regulatory and Development Authority; Mr Richard Webb of Bearing Point; and Mr Walter North, USAID Mission Director; at the inaugural session of the three-day insurance conference in Hyderabad on Wednesday. - - A. Roy Chowdhury

Hyderabad , Oct. 27

WHILE acknowledging the Indian insurance sector has been growing faster than before following the opening up of the sector to private participation, the Chairman of the Insurance Regulatory and Development Authority (IRDA), Mr C.S. Rao, has said that there are areas where the expectations have been belied, especially in the health insurance segment.

Addressing a three-day international conference on Health Insurance organised by BearingPoint Consulting on Wednesday, the IRDA chief said presently the whole insurance sector had been opened up. In spite of the efforts from the regulatory side, there is no interest so far for standalone health insurance companies. Health sector is obviously one area where we have not succeeded."

On the growth of the insurance industry, he said that in terms of premium income, the growth has been 86 per cent in 2003-04 over the premium underwritten in 2000-01.

Prior to the opening up of the sector, the percentage increase from 1997-98 to 2000-2001 was only 66 per cent.

Expressing serious concern over lack of progress in the area of health insurance, the IRDA Chairman said that the regulator had taken various initiatives, the first of which is the creation of a new intermediary. The Third Party Administrator was to be a bridge between the insurance company and the insured and between the insurance company and the service provider, namely the hospital.

"The intention is to bring professional input into the processing of claims and provide cashless service to the insured. We have so far got a mixed reaction to this initiative."

According to Mr Rao, IRDA is also acutely conscious of the inadequacy of data and absence of standardisation in payment for services in hospitals.

The Data Sub-group of the Working Group on Health has addressed the issue relating to data and made a number of useful recommendations. These would be implemented shortly. "We are aware that the steps so far taken touch only the fringe of the problems and what is required is a giant leap forward," he said.

Echoing similar views on the constraints to health insurance penetration in the country, the USAID Mission Director, Mr Walter North, stressed the need to adopt accreditation system for healthcare providers in the country, to build up of data bank to help pricing of insurance products, evolve comprehensive policy on exclusions and pre-existing diseases and create an enabling environment for sustainable micro-insurance system.

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