Page 185 - Ebook health insurance IC27

Sashi Publications

Questions and Answers

Q1. Summarize the importance of data for health insurance industry .
Ans. Thefollowing point summarizes theimportance of data forhealth insurance industry:
(a) Management - they use data analysis reports generated from the experience

data to make informed decisions and corrective actions related to pricing, product
design, business plans, marketing strategy etc. For e.g, premium for products
with higher claims ratio can be modified to achieve the desired profitability.

(b) Actuaries - they performmost rating and underwritinganalysis including experience,
classification and segmentation analysis and internal tariff development.

(c) Underwriters - they use data to study the pattern indicated by the data to decide
the acceptance or denial of a risk. An underwriter also uses data to load premiums
or provide discounts for a particular kind of risk.

(d) Finance - Use data to evaluate the company's liabilities for financial reporting
and maintaining solvency margins as stipulated by the regulator.

(e) Marketing and sales- department uses data to benchmark the performance of
underwriting offices and staff members. Data is also used for provider contracting
function in establishing fair yet competitive fees to pay providers.

(f) For Regulators - Use data to analyze the overall performance of the sector, to
keep track of market developments, to frame policies in regards to solvency
margins, file and use, customer education and awareness etc.

(g) For Government - data is used by various ministries in formulating social
schemes such as Rashtriya Swasthya Bima Yojana, Arogyashri which may
be require detailed study of the historical data related to disease burden, socio-
economic factors, claims experience etc.

(h) For TPAs - they use data to evaluate their own performance in terms of claim

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