'Group health policy pricing is irrational'

Standalone health insurers are awaiting the opening up of banking sector as a channel for selling their products. They feel it will bring down the cost of distribution and increase the reach. Manasije Mishra, CEO - designate of Max Bupa Health Insurance, spoke to Aswathy Varughese about opportunities and challenges in the sector. Excerpts from the interview:
 
What perks do you expect in the health space?
The General Insurance Council represented the industry’s concerns well. I am hopeful that the deliberations will yield fruitful results. The main agenda was how to beef up distribution of health and other general insurance products. The general insurance industry especially suffers from high cost of distribution. So increasing the reach of product should be the priority for us as manufacturers, regulator and the government.

How will yo make the distribution efficient and cost effective?
Bancassurance guidelines would be a big relief to standalone health insurance companies. If we could get it, the banking sector will immediately open up for the sale of health polices and the whole industry will benefit. The requirement of a wide spectrum of customers will be addressed by this. The revised draft is more flexible as banks can decide on whether they be acting as brokers or distribution partners. Also, banks can retain a company or can opt for multiple companies.

Should health insurance be offered to senior citizens?
Enrollment above the age of 65 years serves the purpose of having a medical insurance. Chances of a person at that age getting a disease or making a claim are significantly higher. The pricing will definitely reflect that. So it is not reasonable to expect that the premium a 25- or 35-year-old pays would be the same for a 75-year-old.

What are your concerns on group health plans?
We are concerned that pricing in this segment continues to be irrational. Competitive pricing in such policies will not help the industry in the long run. We have taken a conscious call to keep away from those kinds of pricing. Corporates who want to give their employees better service and are also willing to pay are approaching us. I feel that price in this segment has not been corrected.