4 PSU insurers lost Rs 26K in 5 yrs: CAG
New Delhi, August 5
The Comptroller and Auditor General (CAG) on Friday said four public sector undertakings (PSU) in the field of health insurance incurred a collective loss of Rs 26,364 crore from 2016 to 2021.
Group policies to blame
- The losses were on account of group policies where premium charged was less and claim outgo was more
- The companies are New India Assurance, United India Insurance, Oriental Insurance and National Insurance Company
- They are functioning under the Ministry of Finance
In its report in Parliament, it said the losses of health insurance business of PSU insurers, either wiped out or decreased the profits accruing from other business. The losses were on account of group health insurance policies where premium charged was less and claim outgo was more when compared with retail policies for individuals.
PSU insurers’ market share in health insurance business had been reducing continuously vis-à-vis private insurers, the CAG said.
Health insurance business is the second largest line of business of the PSU insurers — the first being motor insurance — having a gross direct premium of Rs 1,16,551 crore during the five-year period.
The CAG noticed that Ministry of Finance guidelines were not complied with by the PSU insurers, said the report: ‘Third Party Administrators in Health Insurance business of Public Sector Insurance Companies’.
There are 32 general insurance companies doing health insurance business in India. Of these, four are PSU insurers — New India Assurance Company Limited, United India Insurance Company Limited, The Oriental Insurance Company Limited and National Insurance Company Limited offering various health insurance products.
