Private insurers are making a beeline to join hands with State governments to offer health insurance to the rural poor under the Rashtriya Swasthya Bima Yojana (RSBY) scheme.
Launched in 2008, RSBY offers up to Rs 30,000 hospitalisation benefit to below poverty line (BPL) households. Though the actual premium is in the Rs 400-500 a year range, BPL households pay a mere Rs 30 a year. The residual cost is borne by the Central and the State governments in the ratio 3:1.
“We have been watching this (RSBY) segment closely. Pricing and infrastructure are the key issues. We are looking at addressing them to venture into this segment,” Mr Tapan Singhel, Managing Director and CEO, Bajaj Allianz General Insurance, told
Max Bupa Health Insurance Company is also actively looking at this segment. “We are working on some proposals in certain States and are hopeful something will fructify soon,” said Mr Neeraj Basur, Chief Financial Officer, Max Bupa.
Huge scope
Information on the RSBY Web site show that nearly three crore of a total of 6.19 crore BPL families (estimated to have five members each) have so far enrolled for RSBY coverage. Nearly two-thirds of the families enrolled so far are insured by the four public sector majors.
The scope of the scheme is expected to increase as data on BPL families of at least four States, including Andhra Pradesh, Goa, Madhya Pradesh and Tamil Nadu, are yet to be identified and RSBY is yet to be extended.
Profitable venture
From the private sector, ICICI Lombard GIC Ltd entered the segment about four years back and is currently working in 8-9 States. “Risk appetite, pricing, ability to service the portfolio are some of the key challenges in this business. However, we have not been losing money on this scheme,” said Mr Sanjay Datta, Head – Underwriting and Claims.
Chola MS has covered 74 lakh families across five States, including Gujarat, Maharshtra, Jharkhand, Bihar and Sikkim, in the last 3-4 years.
“Our premium collections in 2011-12 stood at Rs 160 crore. We hope to grow it by 20 per cent this year,” said Mr Neeraj Moorjani, Head – Product and Brand Management, Chola.