The Telegraph
Since 1st March, 1999
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Health is not wealth for private insurers

New Delhi, May 7: The government is set to unveil its universal health insurance scheme next week. The ambit of the scheme, which was announced in the budget, is being expanded so that both private and public sector insurance firms can participate in it.

Finance minister Jaswant Singh had announced in the budget that the scheme would be offered only by the state-owned insurance companies.

“We are too happy to allow the private insurers to run the same health insurance scheme. A notice to this effect could come out as early as next week,” Ajit Mohan Sharan, joint secretary, banking and insurance, told The Telegraph.

When the scheme was announced in the budget, the private insurers had expressed disappointment at being left out and had accused the government of failing to create a level playing field.

However, now that the government has decided to allow them to participate in the scheme, some private insurers have turned coy.

A senior official from Iffco-Tokio General Insurance company, a private insurer said, “Such a policy requires tremendous infrastructure. At present,we do not have this kind of a set-up. Our management has not taken any decision on this yet.”

Shrirang Samant, chief executive officer, HDFC Chubb General Insurance, said “I am not aware of any such development. We still have to look into the details.”

However, Sam Ghosh, CEO, Bajaj Allianz General Insurance said, “It is a very promising initiative by the government to give us this opportunity. Our main concern is being able to create such an infrastructural base to sell such large number of policies.”

“We need to get into an alliance with somebody who already has a wide network base in rural area. In the next two to three weeks, we will try and work out something,” he added.

“We are expecting a formal notification from the regulator —IRDA and the government — before we get down to making any plans. Moreover, we have not worked out the feasibility of this cover as we do not have complete details of the product,” said Antony Jacob, deputy managing director of Royal Sundaram Alliance.

On the other hand, the public sector general insurance companies have expressed fears of a huge claims payout by the insurers. In addition, they feel that private insurers will fail to market the policy in rural India.

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