Amidst Challenges of Standardisation, Will Health Insurance portability, which is Scheduled to be Implemented from July 1 This Year, Improve The Scenario in The Insurance Sector.
Portability appears to be the latest buzzword among Indian regulators. Even as people get a grip on the nitty-gritties of mobile number portability and how they can put it to good use, the insurance regulator, Insurance Regulatory and Development Authority (IRDA), has introduced health insurance portability on February 10. This regulation will allow a person to switch between insurers and still carry forward the benefits of the old insurance without losing the accumulated credits on the waiting period and the bonus on health cover. IRDA came up with portability of health insurance policies after several representations were made by consumer associations and policy holders. Industry experts are confident that this move will give insurance providers an impetus to focus more on customer value and relationship, so that they do not shift due to perceived or actual service deficiency.
There are other reasons why this is a major benefit to customers. IRDA points out in its guidelines how a person who moves from one region to another is disadvantaged if his insurer cannot provide policy servicing at the new location. Similarly, when employees change companies, they lose cover due to lack of portability of policies. The apparent guiding philosophy behind IRDA’s initiative is to protect policyholders against such discontinuity and consequential loss of pre-existing diseases (PED) cover.
Subramanyam B, Vice-President and Head, Health Vertical, Bharti AXA General Insurance says, “The major factor which was preventing customers from transferring their health policies to another company was the possibility of losing continuity of benefits, such as cover for pre-existing diseases or illness.” The new system, once implemented, will offer flexibility and hassle-free services to those with transferable jobs, people with proclivity for changing insurers, and to those who have a penchant for changing jobs. In short, a policyholder need not necessarily remain tied to a single insurer throughout his/her life. But the other side of the coin is that insurance companies will have to deal with competition to retain their customers. According to some experts, this will eventually result in better services and product innovation.
There are other reasons why this is a major benefit to customers. IRDA points out in its guidelines how a person who moves from one region to another is disadvantaged if his insurer cannot provide policy servicing at the new location. Similarly, when employees change companies, they lose cover due to lack of portability of policies. The apparent guiding philosophy behind IRDA’s initiative is to protect policyholders against such discontinuity and consequential loss of pre-existing diseases (PED) cover.
Subramanyam B, Vice-President and Head, Health Vertical, Bharti AXA General Insurance says, “The major factor which was preventing customers from transferring their health policies to another company was the possibility of losing continuity of benefits, such as cover for pre-existing diseases or illness.” The new system, once implemented, will offer flexibility and hassle-free services to those with transferable jobs, people with proclivity for changing insurers, and to those who have a penchant for changing jobs. In short, a policyholder need not necessarily remain tied to a single insurer throughout his/her life. But the other side of the coin is that insurance companies will have to deal with competition to retain their customers. According to some experts, this will eventually result in better services and product innovation.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
