Mumbai: Brace for an increase in your health insurance premiums as several insurers are set to increase rates. On Wednesday, the country’s largest standalone health insurer Star Health Insurance said that it would be raising the premium rates by 10-12 per cent per annum on two of its products in the coming days. The hikes come even as Star Health in July raised rates by 10 per cent on its Young Star Insurance Policy. Other insurers looking at increasing health insurance premium rates are New India Assurance, the country’s largest general insurer, and Niva Bupa Health Insurance. New India Assurance has raised rates by 10 per cent, which would be effective from November. Standalone health insurer Niva Bupa is hiking the premium for ‘Health Companion,’ one of its oldest products. Another top player, HDFC Ergo General, has recently increased premium rates on its flagship health insurance products ‘Optima Secure’ and ‘Optima Restore.’
While health insurers are quick to attribute the increase in rates to rising medical inflation, the fact that is often ignored is the huge commissions that they pay to their insurance agents, which are passed to the consumer and result in high premiums. Take for instance, Star Health, which pays commissions ranging from 15 per cent to as high as 45 per cent to its agents.
“The health insurance rate on the retail side is increasing on a regular basis to absorb the rising cost of healthcare services, treatments, and the introduction of new technologies and treatments. The only issue is that the insurance industry has to leverage vast cashless networks, operational/data efficiencies, and increase the risk pool. This will not only help us to expand the penetration but also help us to ensure that we keep the price affordable to the consumer. The insurance industry has to find the right balance between aggressive commissions and keeping the price stable and ensure a customer-first approach,” said a health insurance consultant.
Anand Roy, MD and CEO of Star Health Insurance, said, “Post-Covid, the medical inflation is very high. Most of the price rise has to do with medical inflation, which is 14-15 per cent. Price increase is our last strategy and is done when our loss ratios increase over 100 per cent.”
“The Master Circular on health insurance is pro-customer as it provides greater clarity to customers on coverage and waiting periods. But some price impact would be there for customers,” added Roy.
