Home Health Tata AIG expects health to lead revenues, to set up health management division – Times of India

Tata AIG expects health to lead revenues, to set up health management division – Times of India

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Tata AIG expects health to lead revenues, to set up health management division – Times of India

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MUMBAI: Tata AIG General Insurance expects the health segment to drive non-life revenues during the current fiscal although industry oveall is expected to de-grow 5-6%. Keeping in mind the potential of the segment, the company within three months will shift in-house the management of its health insurance indemnity claims which was hitherto outsourced to third-party administrators. The company is in the process of setting up its health management division in Hyderabad.
Speaking to TOI, Parag Ved, executive VP, and head personal lines said that health insurance is the glimmer of hope for the industry. “Customers understand the importance of health insurance after the unprecedented COVID-19 crisis. Health insurance has a market share of around 26-28% in the non-life insurance industry, this sector is likely to be on the fast track going forward,” said Ved.
While health insurance is expected to grow, the average claim size has also risen because of the additional costs due to Covid-19. There have also been disputes between the industry and hospitals on this front. “The industry along with regulator and council is trying to work out a mechanism which offers some better solution to these issues. This is an evolving procedure and requires a couple of months to play out what the pandemic is all about, and who is on which side of the line. My sense is that providers would expect an increase in tariffs across board, because of an increase in cost,” said Ved
Another development in health insurance is the change in delivery models which is expected to now go beyond hospitals. “We expect a rise in alternate solutions like telemedicine and homecare. This could in turn have a long-term impact thus helping healthcare services to reach remote populations also including the under or un-insured set of people,” said Ved.
Motor insurance, which has been a major driver of revenues for the non-life industry has been hit this year on three fronts. First, new sales of the automobile sector are under stress because of the limited mobility post-lockdown. Secondly, commercial vehicle owners – the buyers of big-ticket motor insurance – delaying renewals of vehicles that are in laid-up condition. Third, the annual hike in motor-third party insurance rates has not taken place this year because of the lockdown.
“The SME space is looking good, partially owing to increased rates in the industry and heightened awareness levels. Fire and Motor have been doing partially well, but it is a very minute part of the overall general insurance industry. The entire loss can never be compensated by a couple of segments of general insurance doing well. So, we estimate a downturn of overall 5-6% in this financial year,” said Ved.

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