ICICI Pru may offer health cover with fixed premium

ICICI Prudential Life Insurance, the country’s largest private life insurer, is looking at introducing a level premium structure for health insurance plans. Non-life insurers use a risk-based pricing for health insurance, which makes coverage expensive as people age. However, there has been objections from policyholders who have been paying premium for years without a claim. ICICI Prudential is looking at introducing a policy where the premium will remain the same year after year as in life insurance. The company is also building up a suite of health products with the latest being Crisis Cover, which provides for payment on detection of any of the 35 diseases covered. For distribution of health insurance, the company is using its existing agency network. However, the servicing has been outsourced to TTK Healthcare, a third-party administrator. Last week, the company’s promoters have increased its capital base by Rs 300 crore to Rs 2,372 crore. The promoters, ICICI Bank and Prudential, contributed to the capital in the existing proportion of 74:26, respectively. The capital infusion is aimed at driving the company’s expansion over the next year, which includes opening new branches and offices across the country as well as scaling up operations. A couple of months ago ICICI Bank had said it would transfer shares in its insurance and asset management business to a holding company — ICICI Financial Services. All future funding requirements for its insurance business was to be raised by the holding company. ICICI Bank had received commitments from international investors to pick up 5% stake in ICICI Financial Services. The agreement with foreign investors valued the holding company at $10 billion. However, the proposal could not move forward as the Foreign Investment Promotion Board (FIPB) has not yet approved the proposal. There is a possibility that ICICI Bank may go ahead and unlock the value in insurance ventures by selling stake in the holding company to domestic investors. In the first quarter of the current financial year, ICICI Prudential notched up new business group premiums of Rs 987 crore, posting a quarter-on-quarter growth of 22%. Renewal premium showed a strong growth of 98%
Source:Economic Times