New India Assurance hiring doctors to rein in health claims
29 Apr 2014
New India Assurance Company, which saw its net profit rise 29 per cent to Rs1,089 crore for the year ended 31 March 2014 on the back of improvement in underwritings and claims management, plans to hire doctors to keep a check on health claims and further boost margins.
New India Assurance, the country's largest health insurance provider, has already hired 25 doctors and is looking at hiring 25 more during the course of the year, to keep a check on health claims.
"The doctors will help us in managing third-party administrators and will also look at claim files," said New India Assurance chairman G Srinivasan.
Although health insurance is one of the fastest-growing businesses, it could also be a loss-making one if claims exceed premium incomes.
For New India Assurance, part of the solution has been due to increases in prices. "We had revised rates last year and we expect prices to remain steady for some time," said Srinivasan, adding that the ratio of claims to premium had improved from 103 per cent to 96 per cent.
However, he said, the motor insurance business continued to be loss-making as the combined ratio that included administration costs was over 100 per cent.
"Unlike in motor third-party, where there is some investment income from the claims reserves, in group health insurance the pay-outs start immediately," said Srinivasan.
New India Assurance said the higher profits came partly on the back of global premium growing 14.4 per cent to Rs14,304 crore, primarily due to growth in personal lines of business such as motor and health insurance.
To control health insurance costs, New India Assurance is setting up an in-house third-party administrator along with other public sector general insurance companies, said Srinivasan, adding that hiring is in progress and the company would start business in eight to nine months.
In the last financial year, the insurer had increased its market share to 15.82 per cent.
New India Assurance today reported a 29-per cent rise in net profit at Rs1,089 crore for the year to March on the back of improvement in underwritings and claims management.
The largest general insurer's gross underwritten premium increased 14.4 per cent to Rs14,304 crore in the just ended fiscal from Rs12,504 crore in FY13.
While the PSU insurance firm's incurred loss ratio came down to 83.5 per cent from 85.49 per cent a year ago, the combined ratio declined to 117 per cent from 119 per cent in FY 2013.
The company, which had an underwriting loss of Rs1,900 crore, said it hopes to achieve underwriting break-even in the next three years.
In FY 2014, it had an investment income of Rs3,193 crore as against Rs2,791 crore in FY13.
