Several companies, particularly top IT firms and BPOs, are reducing the health insurance coverage for their staff, owing to sharp rise in premium rates. Taking one step ahead, some corporates have taken away parents of employees from their group insurance scheme, restricting the benefit only to the staff. According to the source, IT companies, which have traditionally offered substantial health covers for their staff as a human resource incentive, are now choosing to cut costs either by introducing a co-payment structure or by doing away with the cover altogether.
The insurance restrictions come in the wake of high claims from parents. Due to their high staff strength, IT, ITeS and BPO companies are the biggest buyers of group policies, followed by other services companies, manufacturers and media houses. Since the beginning of the free pricing regime, insurance companies have raised rates on their group health policies since they no longer require to cross-subsidise it against the more profitable corporate property insurance policies.
In the last 6 months, premium rates have gone up by 25-40 per cent on group health covers but the claims still far outweigh the premium. Insurers still want to have big corporate names as their clients, even at a cost. An insurer accepted renewal of the health cover by a leading IT company for Rs 25 crore in spite of it suffering claims of around Rs 35 crore in the previous year. At present, the health insurance market stands at Rs 4,000 crore in terms of premium of which 40 per cent comes from corporate health insurance.
The insurance restrictions come in the wake of high claims from parents. Due to their high staff strength, IT, ITeS and BPO companies are the biggest buyers of group policies, followed by other services companies, manufacturers and media houses. Since the beginning of the free pricing regime, insurance companies have raised rates on their group health policies since they no longer require to cross-subsidise it against the more profitable corporate property insurance policies.
In the last 6 months, premium rates have gone up by 25-40 per cent on group health covers but the claims still far outweigh the premium. Insurers still want to have big corporate names as their clients, even at a cost. An insurer accepted renewal of the health cover by a leading IT company for Rs 25 crore in spite of it suffering claims of around Rs 35 crore in the previous year. At present, the health insurance market stands at Rs 4,000 crore in terms of premium of which 40 per cent comes from corporate health insurance.
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