The Insurance Regulatory and Development Authority of India (IRDAI) is keeping a close check on the recent health insurance premium rise trends in the industry. IRDAI chairperson Debasish Panda said all parties, including health insurers and hospitals, need to address the growing costs. He was speaking in Mumbai at the CII Insurance and Pensions Summit on 22 October. Only concerted efforts can reduce the mounting medical treatment costs, he said.
Panda acknowledged premium hikes that multiple insurers have implemented this year. According to him, there is a need for both parties - insurers and healthcare providers to reach an agreement on their pricing. In his opinion, only by improving cooperation can the issue of surging health premiums be negotiated. Panda appealed to both insurers and hospitals to openly discuss the matter saying, "Cooperation between the two parties is necessary to solve the problem".
That would, in fact, be stabilizing premium levels as the increased population covered by health insurance will ensure proper distribution in terms of risk factors in pricing. According to Panda, prices for health insurance are determined based on a number of factors, including claims experience, and general principles adopted by actuaries. He assured that efforts are being made to make health insurance accessible to the public at large.
Consolidation in the insurance sector, Panda said that is still not enough for a country with over a billion people to have some 70 insurance companies. "More people need to get into the sector," he emphasized, pointing out industrial houses and large conglomerates, in particular, to enter the insurance sector. He also reminded us that the sector is in a period of rapid growth. There are exciting opportunities for new entrants.
He encouraged more insurance companies to list on the stock exchange going public. According to him, those companies that have operated for a long time and attained a certain size should consider listing as it would promote transparency leading to more disclosure. This, in turn, will provide value for the greater good of both policyholders and shareholders leading to increased confidence and trust in the industry.
The IRDAI chief concluded with a call for cooperation and development in the sector. "We have been nudging insurers who have crossed a particular age and reached a particular level to go for listing," he noted.
