Max Bupa aims to breakeven by 2015

Max Bupa Health Insurance, one of the hottest players in the health care insurance business in India, hopes to reach a break-even in operations by 2015. The company, which started operations in mid-2010, is 76:24 joint ventures between Analjit Singh promoted-Max India and UK-based BUPA.

The chief financial officer of the company Neeraj Basur said, Max Bupa Health Insurance has an equity assurance of Rs 700 crore from the joint venture partners, of which, over Rs 300 crore has been infused so far. “We hope to break even in the 5^th year of operations as we had targeted,”

Being one of the most recent players in the business, Max Bupa has been trying to decide itself from other players by present unique products and special services. For instance, the company was the first to offer health insurance products with a sum insured of over Rs 15, 00,000, after which many other companies jumped into the fray, according to Basur.

In an industry where the average size of sum insured in health insurance covers is Rs 2, 00,000, Max Bupa offers health insurance products with covers ranging from Rs 15, 00,000-50, 00,000.

“We have a decent number of customers who have taken our Rs 50, 00,000 products. It depends on the customer needs. There is certainly a segment that sees value in these kinds of products. Those customers who want to ensure there are no hassles or running around when there is a health problem and if they can afford to pay that kind of premium, they go for it,” Basur observes.

Also, with the increasing medical costs and inflation driving prices up, people find it essential to move to policies with higher sum insured to ensure that they have enough coverage in the next ten years, he says.

Being a pure play health insurance player, Max Bupa has no insurance intermediaries or third party administrators, which makes the claims settlement process easy for the customers. Also, unlike most players, who get a bulk of their business from group health insurance schemes, the individual, retail customers are the focus for Max Bupa.

The company, which clocked a new business premium of Rs 46 crore for the first half of this financial year, hopes to complete its first full year on a strong note. “We have already crossed the 100,000 mark in customer base, which is pretty good for a 14 month old company. We hope to close this financial year with a total premium of Rs 70 crore,” Basur said.

All you need to know about health insurance portability

Now, policyholders, who are dissatisfied with their current health insurers, have the freedom of switching to other insurers who offer a better deal without losing the continuity benefits. But before switching the health insurers, know the fine prints.

Firstly, when a customer shifts to a new insurer, he will have to undergo all underwriting procedures just like a new policyholder. The loading for porting will be decided only after the completion of medical risk assessment.

Bajaj Allianz General Insurance, head-underwriting, TA Ramalingam says, “The new insurer has the right to reject your policy based on its underwriting guidelines, which may differ from your existing insurer. So customers need to be cautious before planning to switch.”

Why would anybody shift to a new insurer? Of course, to get a better deal compared to the existing health one. So, compare the sum insured available with the new insurer that you intend to shift.
It is always better to switch the plans that are similar in nature. Otherwise, the policy will end up in opting either lower cover or higher cover.

The policy holder has to inform the new insurer about the time regarding the choice of switching. According to Irda guidelines, insurers need to be informed 45 days before renewing the existing policy. If the request for the portability is made after 45 days, the insurer may reject the request.

Waiting period for certain illness varies from insurer to insurer. Hence, it is important for the policy holders to check the time period for pre-existing diseases. Besides the specific exclusions, other terms and conditions need to be scrutinised well before shifting.

“Take a conscious decision on shifting. Service levels of the insurers would be the most important criteria while changing your insurer. People would like to shift to an insurer who has excellent service levels especially in claims settlement,” says Shreeraj Deshpande, head-health insurance, Future Generali India.

The earned bonuses so far with the existing insurer may change as per the new portability guidelines. Ensure that you get existing benefits and additional benefits while porting your health insurance policy.

It is advisable to compare the product constructs such as internal sub-limits and co-payments. Also the policy holder should be aware about the age band pricing and how people of higher ages are treated while porting.

“With the implementation of health insurance portability, insurers will have to enhance their service capabilities and engage in constant innovation to service their existing and potential customers. It is expected to bring in new benchmarks in delivery mechanisms and product innovation in the industry,” say Damien Marmion, chief executive officer, Max Bupa Health Insurance.

Is it possible to switch my health insurance provider

Yes. Health insurance portability facilitates one to switch your service provider if you are not happy with their services without compromising on policy terms. This will increase competition thus help you well-priced and more quality services. In fact it is going to be possible from the 1st of July 2011, just 4 months away!
Sanjay Datta, the head of health at ICICI Lombard General Insurance said, "It is more like mobile number portability. Waiting period of customers will be removed".
This is going to bring immense relief to unsatisfied health insurance customers. And, portability is going to make the health insurers very competitive thus making them serve their customers better.
Bharti AXA General Insurance CEO and Managing Director Amarnath Ananthanarayanan said, "There will be increased competition in the sector and better quality of service. Overcharging and variation in rates of premium would be reduced".
The Insurance Regulatory and Development Authority or IRDA – the sectoral regulator has issued guidelines has made it compulsory that pre-existing diseases (PED), which are covered by the existing insurers, would also be covered by the new insurer. Also the insurance companies will have to provide all records and claims history of the customer to the new insurance company.
To quote IRDA - "It is essential to protect the policyholders against discontinuity and consequential loss of PED cover by making the health insurance plans portable across the insurance companies".
Datta said, "Customers can now choose to shift their insurers in a hassle free way as there would be lot of choice of them and would also ensure better quality of service from the insurance companies by increasing competition".
Max Bupa Health Insurance CFO Neeraj Basur said, "This will bring in more transparency and will also allow insurers to assess the risk and provide underwriting at the point of sales".
Insurers say that though group insurance policies would be easily portable, individual policies could take some time; as, group policies offered by different insurers are mostly similar in nature but individual policies work out differently according to individual customers. Also, it will take time to ensure satisfaction after portability of individual health insurance due to dissimilar benefits and features of individual plans. The long and short of it is at least there is a chance to change your health insurer and get better service.