Life Insurance Corporation (LIC) Chairman MR Kumar has told PTI that the company was eager to re-enter the mediclaim category when the regulator provides clarity on the matter.
He said the firm was evaluating the Insurance Regulatory and Development Authority of India's (IRDAI's) suggestion and that the insurance provider already provides a wide range of assured and long-term health protection packages.
Debasish Panda, the new chairman of IRDAI, recently said it was time for life insurers to return to the health insurance market because he had mandated that the sector makes sure that every person had health insurance by the year 2030. Later on, he stressed that no decision had been made and that the regulator was just weighing the benefits and drawbacks of allowing life insurers to market health insurance coverage.
In 2016, IRDAI had asked life insurers to withdraw indemnity-based health plans from the market. According to indemnity-based health insurance policies, the life insurer reimburses medical expenses up to the covered amount. For health insurance policies with fixed benefits, a certain sum is paid from the total insured for predetermined illnesses or medical conditions.
In global markets, life insurers offer health insurance. Currently, of 24.50 lakh life insurance agents nationwide only 3.60 agents work in the health insurance sector. The number of agents is estimated to increase by 600 percent if life insurers were permitted to operate in the health insurance market.
However, observers in the business claim that the concept has some flaws. Health insurance claims are reported by about 7 percent of covered individuals annually, despite the claim department of a life insurer allegedly being focused on payment upon death or policy maturity.
Countering this observation, some exters say that life insurers already have the necessary infrastructure to offer these plans in terms of policy servicing. Also, there is an opportunity to further elevate the experience from what it was before 2016.
LIC's finances
India's largest life insurance company recently reported a net profit of Rs 682.9 crore for the April-June quarter, a multi-fold rise from a mere Rs 2.6 crore in the corresponding period last year.
On a sequential basis,
LIC's profitability metrics also declined for the June quarter. In the March quarter, new business value declined by more than 80 percent to Rs 1,861 crore from Rs 9,920 crore.
Post-earnings, the insurer told the press that its profits would remain stable going forward.
(Edited by : Nishtha Pandey)
