Insurance companies are pulling out deep discounts on group mediclaim as premium rates in group medical cover segment are moving up, according to the general insurance industry officials. Rise in rates by companies, for covering the medical expenses of their employees, has forced general insurance companies to discontinue offering large discounts for group mediclaim cover.
Normally, insurance companies quote low rates in the first year to attract companies. In condition of incurring higher claims, they compensate losses by quoting higher premiums the next year. However, when client companies switching from one insurer to another for opportunities to slash costs and pay lower premiums, insurance companies rarely find a chance to get back their losses. This has made this segment unprofitable, said Mr M. Ramadoss, Chairman and Managing Director, Oriental Insurance Company.
Normally, insurance companies quote low rates in the first year to attract companies. In condition of incurring higher claims, they compensate losses by quoting higher premiums the next year. However, when client companies switching from one insurer to another for opportunities to slash costs and pay lower premiums, insurance companies rarely find a chance to get back their losses. This has made this segment unprofitable, said Mr M. Ramadoss, Chairman and Managing Director, Oriental Insurance Company.
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