Mumbai: ICICI Prudential Life said it is keen to re-enter the health insurance vertical as there’s “nothing new” in the business for the company which had been in the segment for many years till 2016. Insurance regulator Irdai had in 2016 banned life insurers from selling pure-play health policies that are annually renewed or sold with one-year validity.
Recently, Iradi chairman Debasish Panda hinted at allowing more players into health insurance segment in order to ensure medical cover for every citizen by 2030. However, the Irdai chairman clarified that he is evaluating the pros and cons of allowing life insurers to sell health insurance and that a decision is yet to be taken on the matter.
Before the blanket ban imposed by the regulator, ICICI Prudential Life had a large customer base in the health insurance segment. Following the regulatory restriction, the life insurer helped a large number of its customers port out their plans. However, over 2.6 lakh policyholders did not port and they are still being serviced by it, a top company official has said.
“The regulator had stopped us from selling new health policies in 2016 when we were very active in the segment. Since we know the business well there is nothing new in it for us and so we are keen to re-enter this segment as and when the regulatory ban is lifted. After all health and life go perfectly well and globally this is allowed,” N S Kannan, managing director and chief executive at ICICI Prudential Life, told PTI in a recent interview.
Indemnity-based mediclaim policies are the best-selling health policies in the country. However, since 2016 life insurers have been allowed to offer only fixed benefit health plans.
After the comment from the Irdai chairman, a number of life insurers, including LIC, HDFC Life and Indiafirst Life, have said they are keen to re-enter the segment.
At present, there are 24.50 lakh life insurance agents in the country but there are only 3.60 lakh agents in general and health insurance category.
If life insurers are allowed to enter health insurance business, the number of agents is likely to rise by 600 per cent, which may lead to increased health insurance penetration in the country.
Meanwhile, Kannan expressed confidence that ICICI Prudential Life will comfortably meet its target of doubling the Value of New Business (VNB) to Rs 2,560 crore by this fiscal. The company’s VNB stood at Rs 1,328 crore in FY19.
His optimism stems from the much-anticipated VNB growth clocked in the first quarter at Rs 471 crore, which was more than 31.7 per cent from Rs 358 crore in the year-ago period.
VNB is a key profitability metric in the life insurance industry. It indicates the future profit of a life policy written now.