Public Sector Insurers to Set Up a Common TPA to Settle Medical Claims

A common Third-Party Administrator (TPA) is to be set up by state-run general insurance companies for settling medical claims. The claims ratio (ratio of claims to the premiums earned) of state-run general insurance companies in health insurance segment is over 120%. And these insurers are blaming third-party administrators for spiralling losses in this segment.

The Chairman of New India Assurance Company says, they have started the process of setting up a common TPA along with LIC and GIC. Further, he mentions, medical claims in health insurance sector have been going up every year and it is affecting their profitability.

All state-run general insurance companies such as New India Assurance, National India, United India and Oriented India insurance along with the General Insurance Corporation (GIC) and Life Insurance Corporation of India (LIC) are going to use the common TPA. They believe that common TPA will help lower claims. The cost involved for setting up new TPA can be recovered over the years as it may help in decreasing the number of claims.

Private insurers such as HDFC Ergo, ICICI Lombard and Bajaj Allianz have already in-house TPA for claim settlement processes.

Source: The Economic Times