CHENNAI: The insurance regulator's fiat giving unhappy health insurance customers the option to switch insurers evoked mixed response from the companies. "The circular is well drafted. It's a correct step and consumer-friendly move," V Jagannathan, chairman and managing director, Star Health and Allied Insurance, said.
The Insurance Regulatory and Development Authority (IRDA) on Thursday allowed policy holders to change their existing insurer without any change in the premium outgo.
Some insurers believe that the guidelines may have some adverse impact on the sector. "Portability can be genesis to various frauds and misuses. We need to evaluate the pros and cons of the move but we are confident that in the long run, it would be the company with the better services and integrity that would stand to gain in the market dynamics," Antony Jacob, CEO of Apollo Munich Health Insurance, said.
A CEO of a south-based health insurance company said that in the absence of standardisation of products in India, the switching of insurers can leading to misunderstanding. "For example, when a policy holder moves from company A to company B, he may get coverage only against four to five diseases, while he was getting coverage against six to seven with the first company. The agent may not explain the nitty-gritty of a policy," he said.
As per the guidelines, in case of a switch, the old health insurance company will have to share the details of policy in seven days. However, industry people believe that there can be logistic issues there as all health insurance companies do not have a centralised data processing facility.
"I don't expect a sweeping change overnight. It will happen gradually over a period of time after people will start understanding the implications of portability," a CEO of a health insurance company, said.
"Introduction of portability is a step in the right direction to safeguard policyholder's interest. Companies will have to constantly improvise their efficiency standards in terms of customer engagement and relationship and ensure that the customers do not move away from them citing service deficiency," Ajay Bimbhet, managing director, Royal Sundaram Alliance Insurance.
Some industry experts believe that new system will require strong underwriting and selection process by the companies as there may be some misuse by policyholders.
