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The four public-sector insurers have set the ball rolling for their proposed joint third-party administrator. Insurance companies use a third-party administrator to advise customers on hospitals, manage their claim processing and disburse claim amount to policyholders.
The administrator is expected to be fully operational by October 1.
Insurers have issued an expression of interest for hiring an IT service provider and professionals to head their IT, finance and human resources divisions. The promoters of the proposed administrator will be the four public-sector general insurers — New India Assurance, Oriental Insurance, United India Insurance and National Insurance; General Insurance Corporation (the national re-insurer); and Life Insurance Corporation of India.
The four public-sector insurers control 70 per cent of the Rs 13,000-crore health-insurance market. But they are making losses with claims ratio of over 120 per cent, particularly in the group health portfolio.
Insurers currently outsource the claims settlement process to different administrators. However, their experience in this regard has been unsatisfactory. Insurers feel that the move to settle claims through their own administrator will enable them to check fraudulent claims and resolve disputes in claim settlements faster, eventually helping bring down losses in this portfolio.
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