Group health insurance premium rates are not going to pinch employers this year as competition among general insurers is expected to keep rates under check.

According to industry experts, despite high claims in the group health insurance segment, rising competition has resulted in insurers being unable to raise rates. The premium rates for group health insurance are likely to soften by 5-10 per cent at the time of policy renewals in April.

Group health insurance is the health cover that employers buy for their employees. It is a loss-making portfolio for general insurance companies with a total claims ratio of around 110 per cent (for every ₹100 they get as premium, they are paying out claims worth ₹110). G Srinivasan, Chairman and Managing Director of New India Assurance, which has the largest health insurance portfolio in the industry, said, “We are looking at different strategies depending on the ability and willingness of the corporate to pay premium. We also suggest alternatives like co-pay, reducing the benefits, limiting the room rent availability, and putting restrictions on covers for senior citizens.”

Insurers, typically, cross-subsidise group health insurance as they get bulk insurance business from corporates for other lines of businesses such as fire, property and engineering. “Group health was an accommodation business for many years. So two years back, there was a sharp increase in group health insurance rates because we wanted the portfolio to stand for itself. But in the last one year, insurers have started looking at it again as an accommodation business,” said Srinivasan.

According to Amarnath Ananthanarayan, MD and CEO of Bharti AXA General Insurance, despite losses in group health insurance they have been unable to raise rates due to competition. He said the company is looking at offering not just a hospital reimbursement policy to group customers but also plans to offer other health insurance related products, such as outpatient department coverage for parents and higher deductible super top-up cover which the employee can purchase separately under the group plan.

The health insurance industry in India is a highly competitive space with 23 general insurance companies and five standalone health insurance companies.

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