Mediclaim portability started in October 2011. While the response has been lukewarm, there are early trends that poaching of young and healthy customers will be the strategy. Who is winning on that score?

As expected, despite newspaper advertisements from the Insurance Regulatory and Development Authority (IRDA) extolling the ease and benefits of mediclaim portability, the insured are not biting the bait so far. Private insurance companies, who have the most to gain, have got less than 100 proposals each. Insurers are targeting the young and healthy segment and are using their ‘right to underwrite’ to refuse old and unhealthy customers.

Moneylife investigation shows that the frontrunner in portability race is Apollo Munich. According to one private insurer, “Out of the total requests for policyholder medical and claim history, 90% are from Apollo Munich, which is surprising.”

The same sentiment is shared by one government-owned insurer. According to it, “Apollo Munich is targeting our young customer segment. They are working through agents who work for both the insurance companies.”

According to another private insurer, “We have a few customer requests trying to go out from our company; many are going to Max Bupa.” Moneylife has found that Star Health has also received good number of portability proposals. Only a few of Max Bupa’s customers are trying to go out when compared to the decent number of portability requests to join this company.

The question is why are standalone health insurers gaining? IRDA allows general insurance agents to also work for one standalone insurer. It means these agents are now diverting business from a general insurer to a standalone insurer. What could be the reason for agents to deflect the business? The commissions are same for renewal or new business; is there some other incentive offered by the standalone insurers? We don’t know. It could also be ex-agents of the insurance company who have details of clients and are using it for luring them with the portability bait.

It has also to do with company strategy to gain business from portability. Apollo Munich homepage has a link at the top to a portability guide, portability form, application form, etc. It has free portability reminder link on the homepage. Apollo Munich will send you a reminder email 60 days before your renewal along with a helpful guide on portability. In short, the company has taken proactive steps to gain from portability, which is a smart business strategy.

This nudge in business comes at a time when bancassurance exposure draft from IRDA brings cheer to standalone insurance companies. At present, one bank can sell products of any one insurer in the life and non-life segments. The draft allows one bank to tie up with one life, one non-life and one standalone health insurance company. This is a paradigm shift for standalone health insurers like Max Bupa, Apollo Munich and Star Health.

Interestingly, Moneylife has found some murmurs among private insurers about delays in getting medical and claim history from government-owned insurance companies. Some are saying it is just few days delay, instead of seven days it is taking 10-12 days. Others are saying that it is taking some about of follow-up to ensure government insurers are giving the information in timely manner. One insurer points out that it is taking longer than expected and they are handling it behind-the-scenes by talking with IRDA.

The volume of portability requests is low and hence the issues related to getting information from existing insurance companies have not reached a level of alarm. Once portability requests grow, it will be interesting to see if the delay in getting information from existing insurers leads to chaos. You can bet on it.

Some insurers have been tight-lipped about portability and did not want to divulge anything to Moneylife.

According to Fali Poncha, insurance industry veteran and executive chairman, IRICS Insurance Broking, “Despite best intentions on the past of the IRDA and a long journey of over a year, portability is likely to be more illusory than a reality. The need for portability is very real and IRDA’s recognition of the same is a step in the right direction. The real hurdle to making portability a success lies in the fact that the terms and conditions relating to pre-existing diseases (PED) and time-bound exclusions are not common to all insurers.”

Be prepared for a bumpy portability ride. It will work for simple and straightforward cases especially for young with no PED. For others, it is just an illusory offer from IRDA.

Also read –

• Mediclaim Portability: Some gain, a lot of pain

• “Portability is likely to be more illusory than real”

• There are grey areas in mediclaim portability guidelines, says Subramanyam

• Max Bupa, Apollo Munich & Star health to get a boost from bancassurance?