March 7, 2014
Public-sector general insurance companies are planning to join their private-sector rivals in launching healthcare policies offering cashless outpatient department (OPD) medical cover as well as the reimbursement of medical expenses incurred overseas.
“OPD consists of almost 60 percent of overall medical spending in India, so we need to get into that space and offer reasonably priced products in a few months,” Mr G Srinivasan, Chairman and Managing Director of New India Assurance told the Hindu Business Line. The insurer is also planning to offer cover for treatment outside India, he said. The four public-sector insurers – New India Assurance, United India, Oriental Insurance and National Insurance – control 70 percent of the health insurance market.
Healthcare insurance in India typically covers medical expenses incurred during a hospital stay of at least 24 hours. According to a recent report by ICICI Lombard, only 2 percent of the health insurance products currently available cover OPD. These are sold by private-sector general insurance companies and standalone health insurers.
For insurers, covering OPD is not an easy proposition as claims are small and frequent. “While there are difficulties in managing OPD, we need to take care of the loss experience to ensure that it does not become an unviable portfolio,” said Mr Srinivasan.
The move to cover the OPD expenses will provide a wider portfolio for general insurers. Health insurance is already one of the rapidly growing sectors of the industry, expanding by 18.7 percent to INR139.75 billion (US$2.27 billion) for the financial year ended 31 March 2013.