When mobile number portability was introduced this year on 20th January, after a successful test launch in Haryana done during November last year, many people wondered as to how many consumers would actually be willing to shift? According to a report from the Telecom Regulatory Authority of India (TRAI), by the end of February, about 38.33 lakh subscribers opted for the service.
On 10th February, 2011, the insurance regulator, Insurance Regulatory and Development Authority (IRDA) issued a similar notification which would allow any health insurance customer to shift from his existing insurer to any other insurer he deems to be better than his current one.
Health insurance portability will allow the customer to switch to a different health insurer with benefits from previous insurer being carried forward such as:
• Waiting period for pre existing diseases is portable i.e. time spent with previous insurer for pre- existing disease will be considered.
• Initial 30 days of waiting period when no cover is provided will be waived off in case you switch to another health insurer.
• At least same sum assured (with bonus) will be given by new insurer.
For the Customer
People who will try and opt for other insurers also have to be aware that though most of the major benefits are or will be transferred to the new insurers but sub-limits or features that your old insurer would have provided you may not be transferred. Taking an example, if a customer plans to shift from an insurance company XYZ which didn't have sub limits on the room rents and the new insurer ABC has, the customer will have to accept the sub limits in the new policy. For policyholders who have acquired chronic illness, they will have to pay a higher insurance premium if they want to change to a different health insurer.
In addition to this they will get other benefits which would include:
• More competitive premium pricing by health insurance providers
• Customer oriented services
• More innovative products will be offered.
• More transparency due to sharing of information across insurers.
• Bonuses would be carried forward.
For the Company
While the process seems quite simple for the customer, there would be a lot of obstacles for all the health insurance providers. There is a possibility of the customer shifting to the next cheapest option available. There will also be a need to provide a more robust electronic customer data management system as per the mandatory requirements for sharing of customer information.
With customers shifting to other insurers on an yearly basis, the strategy for the insurance companies would be to provide a robust network of hospitals and coverage's along with superior customer service. This will help them to retain their more profitable and loyal customers.
For a consumer health insurance portability is a good thing to have, but they should ensure that they use this choice more efficiently and more thought process involved, as other than price there are a whole lot of other factors which make you have the best health insurance product.