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Niva Bupa's low 2019-20 ICR (53%) - cause for worry?

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18 Sep, 2021 by  vijay

I stumbled upon the Reassure plan based on this site's advice (which seems to have a tilt towards Bupa and HDFC) but was appalled by Bupa's ICR numbers when HDFC Ergo Health's (which is now apparently merged into HDFC Ergo General insurance) is 73% (the highest amongst standalone health companies)


The numbers for the other biggies - ICICI, Reliance - are unreliable because they're all general insurers and report fire/travel/health/vehicle numbers together.


Claims experience is one thing but payout is altogether different so is one supposed to go by features/premium/brand alone when going by these recommendations? Assume of course all declarations will be full and truthfully declared.


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18 Sep, 2021
vijay

Also there seems to be something seriously eye popping about Reassure's premiums:

18k for 50L cover

whereas that is the premium asked for 20-25L covers by ICICI, Reliance etc. This is for a 38 yr individual plan profile.


Is the catch really in the low ICR? (collect low premiums and minimize payouts for healthy profits?)

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18 Sep, 2021

Hi Vijay,


Very good questions. I am one of the persons on this forum who recommends ReAssure (Max Bupa) or Optima Restore (HDFC Ergo) to users, apart from advice on other products.


My take on ICR:

ICR is a redundant metric. The formula is money paid in claim divided by premium income earned. For the customer, the relevant metric is money paid in claims divided by amount filed in claims by customers. Whether ICR is 50 or 100, it lacks relevance for consumer because of the math involved. So don't worry about high or low ICRs of any companies.


My take on ReAssure premium:

Product premiums are not cast in stone. Internet is filled with customer complaints against all insurers about spike in claims during renewals. These spikes are due to age-band change, change in product features, increase in medical inflation etc. Therefore honestly I don't give a damn about premiums because they're hard to predict. And they're controlled by insurers. Max Bupa charging lower premium compared to competition could be their strategy to acquire more customers. Premium has no linkage with claims or claim experience, except maybe for ICIC Lombard, who happens to be an exception in the entire universe of Indian insurers. ICICI Lombard has one of the best claim payment and simplest claim experience, but their premiums tend to be high (even when the product is not as feature-rich as those from Max Bupa, HDFC Ergo, Aditya Birla etc).


I will conclude Vijay by saying that only 2 things matter - What is YOUR need and does the product MATCH those needs. Factors such as premium keep shifting and therefore, not reliable decision indicators over medium to long term.

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19 Sep, 2021
Avinash Sonee
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