mumbai corporates will now have to pay more for buying group health insurance cover for their employees the finance ministry has asked stateowned nonlife firms to cut back on losses in group health insurance a move that will force insurers to hike premiaconfirming the development m ramadoss chairman of oriental insurance corporation said there is a general direction that the losses cannot go on rising even in our statement of intent soi submitted to the ministry the focus is on underwriting profits mr ramadoss is also the head of general insurers public sector associationeach year psu insurers submit their business plans to the finance ministry in the form of an soi and when claims exceed premiums insurance companies make underwriting lossesgroup health insurance accounts for nearly half of the rs 6000 crore premium of the health insurance market the fastestgrowing segment in the insurance business since health accounts for more than fire cargo and engineering insurance put together insurers have been falling over themselves to acquire group health portfolios as a result of the fierce competition prices continue to be in check premia are not rising despite underwriting lossesbut now there is a distinct possibility that premia on health cover could rise by as much as 30 this would mean an extra outgo of rs 900 crore for corporateshistorically group health has been a lossleading portfolio nonlife companies have been selling group health policies at unprofitable rates as these were crosssubsidised by the highly profitable fire insurance business and also added to their toplines with the removal of administered pricing over the past two years premium on fire and other property insurance has fallen by over 40 leaving no headroom for crosssubsidisation however the fight for market share continues because of health insurances contribution to toplinein public sector companies the absence of centralised underwriting the decision to accept a policy is taken at the branch level as against private companies where such decisions are the discretion of the head office has resulted in interbranch competition which has made matters worse for them the need for centralised underwriting for group medical policies within psus is an important discipline that is urgently required said pavanjit singh dhingra of prudent insurance brokers it is difficult to explain to customers how two offices of the same insurance company can quote different premiums for the same risk it is also necessary for the financial health and stability of the insurance industry that avoidable group medical insurance losses are curtailed at the earliestalthough industrywide claims figures are not available for 200809 a senior executive in charge of health insurance said total claims under group health insurance are expected to be above rs 3000 crore resulting in underwriting losses it companies have been among the big buyers of health insurance besides very high sum insured limits and coverage for dependent parents these policies had extremely wide coverage with some including even dental plans as a result claims have gone through the roof said the