These losses were attributed to the deterioration of the health insurance activities of these four PSUs or the decline in profits of other lines of business, noted the audit report on third-party administrators (TPA) in the activities of health insurance from public sector insurance companies.
“The losses were due to group health insurance policies where premiums charged were lower and claim expenses were greater than retail policies,” he said, adding that the market share of PSU insurers in the health insurance business is also decreasing relative to stand-alone health insurers and private insurers.
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Audit findings tabled in Parliament on Friday highlighted that the four insurers – New India Assurance, United India Insurance, Oriental Insurance and National Insurance – failed to comply with the government’s directive not to exceed 95% of the combined ratio of stand-alone group policies and 100% for group policies with cross-subsidization.
Meanwhile, state-run general insurers continue to lose market share in terms of gross direct premiums written with their private counterparts. The collective market share of the four public sector general insurers fell 426 basis points year-on-year to 37.86% at the end of the first quarter of this fiscal year.
All four PSU insurers lost market share in the 12 months ended June 30. New India Assurance, which continues to hold the highest market share in general insurance at 17.53%, lost 235 basis points year-on-year during the period. . The company was the only PSU general insurer that had previously been able to increase its market share.
