To set up their own Third Party Administrator (TPA) to settle health insurance claims by four public sector general insurers New India Assurance, United India Insurance, Oriental Insurance and National Insurance is looking to hit a road block as still they are not able to find a suitable strategic partner. As per PSU general insurers they are hoping to set up this system by next fiscal.
As per PSU general insurers they are not able to find a suitable partner who can fully understand the complexities of Indian health care market in respect of health insurance.
Four PSU general insurers have been planning to set up their own TPA for last couple of years to curtail fraudulent claims and to have better bargaining powers with hospitals. As per insurers about 20% claims are suspected or doubtful.
As per insurers though penetration of health insurance have increased after the entry of TPA as a intermediary between insurers and customers but their bargaining powers with hospitals and efficient handling of claims at ground level have not been satisfactory.
Health insurance industry in India is suffering huge losses. Claim ratio was more than 110% in recent years. This fiscal year it is expected to come down to 90% as compared to 100% in last year. But as per Insurance Regulatory and Development Authority (IRDA), by efficient claim management and proper pricing it should be brought down to 70% to sustain business.
Competition Commission of India has also favoured general insurers this move even though all 30 TPAs argued that this move of PSU insurer’s will eliminate them out of business as these four PSU insurers control over 60% of total health insurance business in India.