Government general insurance companies suffered a loss of Rs 26,364 crore from the health insurance business in the last 5 years

A CAG report said that all the four public sector general insurance companies have incurred a loss of Rs 26,364 crore in the health insurance portfolio in the last five years. This loss to the companies is due to higher claims in group policies. An audit report of the CAG tabled in Parliament recently said, “The loss of health insurance business of public insurers has either wiped out or reduced the profits of other lines of business or has resulted in an increase in the total loss.” Four government insurance companies New India Assurance Company Limited (NIACL), United India Insurance Company Limited (UIICL), Oriental Insurance Company Limited (OICL) and National Insurance Company The total loss of National Insurance Company Limited (NICL) stood at Rs 26,364 crore from 2016-17 to 2020-21. The health insurance business is the second largest line of business of government insurance companies. The total direct premium received during the five years is Rs 1, 16,551 crore.

The first business line of PSU insurers is motor insurance. 3 banking stocks gave returns of up to 33% in 30 days; know the opinion of experts on the banking sector continuously decreasing in comparison. The report of the Comptroller and Auditor General in India (CAG) states that Ministry of Finance has laid down guidelines (September 2012/may 2013) for underwriting of group policies, according to which standalone group policies can be the combined ratio shall not exceed 95 per cent and the combined ratio should not exceed 100 per cent for cross-subsidized policies for the group.

Audit observed that the guidelines of the Ministry were not followed by the Government Insurance Companies. With regard to claim management, the report said that the IT systems of government insurance companies lack proper validation checks and controls. This weakens the smooth functioning and reporting system.