Page 276 - Ebook health insurance IC27

The Insurance Times

Type of reinsurance methods used

 Payout for fixed benefit is smaller than those of indemnity health covers. Both these
product fall under high frequency, low severity category. These require portfolio
approach.

 Critical illness products tend to have lower claim insurance but much higher payout
per claim. These require quota share structures.

 Life insurance companies use of quota share/surplus structure for critical illness
insurance. Some insurance companies also use of quota share reinsurance for fixed
benefit policies.

 Nonlife insurance companies usually reinsurer health insurance with a stop loss
covers.

 Sahi companies also use a stop loss of insurance covers.
 Niche products supported by the insurers

Employers stop loss

 This cover is sold to large companies having more than 50,000 employees.

 The reinsurer and agrees to pay medical insurance claims beyond the stop loss
trigger ie a particular amount may be specified.

 Stop loss covers are also bundled with third-party administration services. In this
type of cover that the insurance company directly sells the insurance to corporate
bodies. In India corporate bodies cannot buy a cover directly from reinsurer.

White labeling

This refers to a structure where the reinsurer designs the entire insurance product-
pricing, underwriting and claims management process and the insurance company acts
as a distributor for the product.

280 Guide for Health Insurance