Agents trip health insurance porting

Health insurance portability, which has been in force for a year, has not resulted in any major churn among policyholders. Insurers say that one of the reasons could be that agents are reluctant to hand-hold customers as regulations bar commissions on ported policies.

Most non-life insurance companies have reported a couple of thousands of customers who have moved out while standalone health companies were the ones to have recorded a net inflow because of portability. A public sector company said that it received a little over 4,000 proposals to shift but ultimately only half the number actually moved. One advantage with standalone companies is that they do not have to license their own agents as existing insurance agents are allowed to sell products of health companies.

“Our main distribution channel is our agency force. Since there is no commission paid to the intermediary in the year of porting, there is no incentive for the agent,” said K G Krishnamoorthy Rao, MD & CEO, Future Generali India Insurance.

According to Sanjay Datta, head of underwriting and claims at ICICI Lombard, the experience of health insurance portability is comparable with telecom where the ratio of customers opting to port is not high compared to the base. “Health insurance customers are stickier compared to mobile customers because in insurance they have multiple policies with the same company.”

Manasije Mishra, CEO (designate), Max Bupa Health, said, “Customers are porting in through various channels, agents are also bringing in portability proposals because they know that if they keep their customers’ best interests in mind, they will get their commission in subsequent years also. We are discovering that some of the older policies are for a low value and the portability benefits are available only on the original sum insured. The customer finds it prudent to buy a family floater with a larger sum insured.”

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