Page 28 - Insurance Times October 2019

Importance of Risk Pooling in Health Y Adequacy of existing system vis-à-vis the available
resource to administer.
Insurance
Y Feasibility of investment strategy
We all know the importance of pooling in insurance, be it
life, health or other general insurance category, where Y Tailor-made customised innovative products suits and
people pay premia to create well spread out composite balance both company and customer
diverse risk profile to cross-subsidize the risk management Y Need strong coordination among all the departments
that is low-risk people to pay high-risk people's medical and work in tandem.
expenses. Research reveals that top 5% people engulfs 50%
of health expense. Rather claim fund .this is a pure uneven How Risk Manager Optimises Claim in
distribution and unhealthy skewed forms of Risk pooling the Indian Health Insurance Company -
though it is not ideal but pragmatic and practical in nature Current Scenario
and that exactly the way all companies manages the risk
Broadly the role of risk manager and the health insurance
exposure so that no bad blood creeps into the system to
bleed the system in future. companies are operating in India can be construed as
harbinger always to mitigate the risk so that claim comes very
rare though practically it does not happen, the reputation
Role of Enterprise Risk Management
gets enhanced due to the proper claim management of the
(ERM) company. Company encourages zero claim paying the no
Enterprise Risk Management (ERM) is considered as most claim bonus (NCB), there are end number of exclusions in
comprehensive proactive, integrated, composed, holistic the policy that ensures management of undue risk within a
approach across the organisation irrespective of the certain magnitude and unnecessary infiltration of claims.
departments or operations which takes all the core functions The actual tenet on which health insurance companies
into account in the broader spectrum of corporate governance operate is paying genuine claim but repudiate the
and correlates all the major activities into a collaborative ingenuine, fraud cases which escalates unwanted burden
approach which optimises the risk exposure and unwanted of the company and inflates the cost which is undue. If
hazards to enhance the productivity and profitability. company smells any malpractice in the claim process would
raise numerous questions and sometimes it turns into
A Robust ERM framework enables the insurer to identify rejection of claim or rejection of cashless claim or ends up
measure, analyse, control, report monitor and suggest all into a legal battle, consumer court, ombudsman which is
material risks in better way to align health companies' not desirable in eye of relationship, now due to the advent
corporate culture and objective with the strategic goals into of portability in the health insurance 50% of the existing
a single realm. policy is getting ported to different companies not getting
proper treatment from the companies.
ERM Entails and Encompasses the
In the meantime, premium has increased manifold more or
Following Areas less in all the health insurance companies over the last five
Y Scope and level of coverage including the chance of years. People are also becoming aware about the charges,
options and guarantees premium rate, claim Ratio of all the companies hence prior
to taking any health policy nowadays people are all
Y Acceptance of risk exposure in relation to the
established risk strategies comparing themselves or through Policy bazaar.
Y Ascertain the proper pricing mechanism including the Actually, companies are playing with the features, if some
implied nature of risk companies are giving refill benefits other company paying
'no co-pay' option, maybe a other company is paying
Y Suitability of channels of distributions
benefits for maximum relationship eighteen nineteen,
Y Robustness of underwriting guidelines and criteria's other company resorting to no age bar feature or
taken all possible angle of risks into account and hospitalisation without any room rent limit, some other
remedies to counter the existing as well as potential risk. giving top-up facility hence it is the spectrum of benefits
Y Availability of reinsurance option depends on the ultimately benefits reaching to the customers at a very
gravity of risk involve. competitive rate with faster claim process.
Y Projection of solvency and profitability under different The article is writer's own composed and his current
scenario company is noway related to it. T

28 The Insurance Times, October 2019