Q&A: Sanjay Datta, ICICI Lombard GIC

'Be guided by marked difference in parameters'

Health insurance portability is poised to be enforced in India next month. It does have its merits, but a switchover of your insurer should not be guided simply by an apparently attractive pricing and loading claimed by a competitor. Sanjay Datta speaks to Puneet Wadhwa about the nuances of the paradigm shift in the waiting. Excerpts:

What is the objective and implementation plan for health insurance portability?
Health insurance portability will give customers the choice of moving from one company to another. It offers the advantage of enhanced coverage that the existing insurer is not offering, and provides a better option to the dissatisfied customer (without having to terminate the present policy).

It will add to the overall growth of the industry by ensuring healthy competition among insurers through improved service efficiency levels and product innovation. The tentative date for the launch for the date is October 1. The insured has to intimate 45 days in advance to avail its benefits. Fresh underwriting is allowed.

When exactly should a policyholder switch an insurer?
Health insurance is a long-term relationship. A customer should not switch side just because of the pricing or loading going by another insurer’s claim. One should evaluate the product features and service levels according to one’s requirements. If there is a marked difference in any of these parameters, then only should one think of a change.

How do you expect companies to improve their quality of services with the implementation portability?
Insurers, as an ongoing process, keep improvising on service levels. Portability is surely going to fuel the development and lead to enhanced service levels by insurers to retain customers.

There was talk of having common data sharing. Is that in place?
The Insurance Regulatory and Development Authority has developed common data-sharing for all insurers, where data will be made available to insurers for accessing information pertaining to portability and evaluating portability proposal.

Do you think this will bring down the problem of loading of premium?
We do not see any change in the loading structure owing to portability. The loading of premium, as done by insurers, is risk-based and done on guidelines.

Under what circumstances can the new insurer deny portability to the policyholder?
Portability can be denied if the insured approaches within 45 days of the policy renewal date or if there is a break in the policy continuity. See, one should maintain proper documentation such as previous policy certificates and renewal notices stating continuity of coverage so that as to make it easier for the new insurer to evaluate one’s proposal.

Will we see insurers going for more product customisation in the space after the implementation of portability so that they can retain customers?
Continuity benefit (or, the time credit gained by virtue of continuous cover under the same policy) is one of the primary aspects of a health insurance policy. That used to make it difficult for a customer to switch insurer. Now, portability will allow a customer to carry forward the continuity benefit. Hence, now a customer has options to choose from best available product in terms of feature as well as price in the market. This would force insurers to innovate and customise their offerings in order to retain as well as attract customers.