The plan to set up a captive Third Party Administrator (TPA) company jointly by all four PSU general insurers is gathering pace, as fraud claims still remains a challenge.
In order to minimize the fraud claims in the health insurance sector, four PSU general insurers –New India Assurance, United India insurance, Oriental insurance and National insurance have come together to float a separate TPA company for captive purpose.
As per estimates, currently there are around 15-20% exaggerated claims.
TPAs manage the insurance company’s claim processing and disbursements to the insured.
At present insurers outsource the process to different TPAs and results have not been satisfactory.
Though the health insurance segment is registering strong growth on year-on-year and shaping up well in terms of market expansion and product innovation, it is a major area where there is an element of exaggeration leading to big losses for the industry.
Till few years ago, the loss ratio in the health insurance segment used to be between 140% and 150%. But it has been corrected and now industry has managed to bring it down below 100%.
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