Ori­en­tal Health Pre­mium Hike Draws Protests

Com­plain about 40% hike, but in­surer says re­vi­sion over­due since ’09

The Economic Times - - Money -

Mum­bai: State-owned gen­eral in­surer Ori­en­tal In­sur­ance has raised pre­mi­ums on its in­di­vid­ual and fam­ily floater poli­cies by up to 40%, spark­ing com­plaints from pol­i­cy­hold­ers. “My pre­mium has shot up by 39%, de­spite not mak­ing a sin­gle claim last year. They have not con­veyed the ra­tio­nale be­hind this in­crease. We have only been told that it is ap­proved by the In­sur­ance Reg­u­la­tory and Devel­op­ment Au­thor­ity of In­dia (IR­DAI),” said Mum­bai-based Ori­en­tal pol­i­cy­holder Ashok Khand­wala, 76, who has a fam­ily floater pol­icy that cov­ers him and his wife, for close to 10 years.

“We have re­ceived a lot of com- p l a i n t s ove r s t e e p p r e mium hikes from our cus­tomers, par­tic­u­larly se­nior cit­i­zens,” said a se­nior of­fi­cial of an in­sur­ance ag­gre­ga­tion por­tal on the con­di­tion of anonymity. While the pre­mium hike for fam­ily floater poli­cies came into ef­fect last year, in­di­vid­ual pol­i­cy­hold­ers will feel the pinch this fi­nan­cial year when their poli­cies come up for re­newal. Ac­cord­ing to the com­pany, the steep hike is a re­sult of mod­i­fi­ca­tions in prod­uct fea­tures, cor­rec­tion of cer­tain anom­alies and the fact that pre­mi­ums have been re­vised for the first time in seven years. “IR­DAI al­lows pre­mium re­vi­sions ev­ery three years. How­ever, we had not ef­fected any changes in our pre- mi­ums since 2009. On an av­er­age, the in­crease has been around 25%. Had the hike been un­rea­son­able, IR­DAI would not have ap­proved it,” said KK Rao, gen­eral man­ager, Ori­en­tal In­sur­ance. New In­dia As­sur­ance and Na­tional In­sur­ance had raised their re­tail health pre­mi­ums in 2013 and 2014, re­spec­tively.

“Al s o , the in­crease is not across the board — we have cor­rected some anom­alies in the rate struc­ture. In some cases, the pre­mi­ums would have, in fact, gone down,” added Rao.

Some in­sur­ance bro­kers at­tribute the sharp rise in re­tail pre­mi­ums to the in­surer’s in­ten­tion to re­duce its loss ra­tio – pro­por­tion of claims paid to pre­mi­ums col­lected. “Their claim ex­pe­ri­ence has not been very good. They could also be look­ing to com­pen­sate for losses on the group health side,” said an in­sur­ance bro­ker who did not wish to be named.

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