Health insurance premium to increase

Close on the heels of the increase in the Motor Third Party premium,  the Indian Health Insurance market is also  to witness an upward revision of premium rates in the coming days. The increase in the premium is expected to be about 15-20%.  The insurance companies are forced to increase the premium rates to keep in check the ever rising cost of  medical services  and the resultant rise in the claims ratio.

It is reported that the current average claim ratio for medical insurance in India is 120%, i.e., for every Re.100 of premium, the insurance companies pay  Re.120 by way of claims making the health insurance business a loss making one. The rate of yearly inflationary rise in medical expenses is  about 15% and the insurance companies have been demanding an yearly increase to that extent in the premium too.

Of late, New India Assurance Co. Ltd.  has already received IRDA sanction to increase the mediclaim  premium with immediate effect with an average expected rise of  about 20%.  Other public sector companies and private players also sure to follow the leader soon.