Mediclaim portability started in October 2011. While the response has been lukewarm, there are early trends that poaching of young and healthy customers will be the strategy. Who is winning on that score?
As expected, despite newspaper advertisements from the Insurance Regulatory and Development Authority (IRDA) extolling the ease and benefits of mediclaim portability, the insured are not biting the bait so far. Private insurance companies, who have the most to gain, have got less than 100 proposals each. Insurers are targeting the young and healthy segment and are using their ‘right to underwrite’ to refuse old and unhealthy customers.
Moneylife investigation shows that the frontrunner in portability race is Apollo Munich. According to one private insurer, “Out of the total requests for policyholder medical and claim history, 90% are from Apollo Munich, which is surprising.”
The same sentiment is shared by one government-owned insurer. According to it, “Apollo Munich is targeting our young customer segment. They are working through agents who work for both the insurance companies.”
According to another private insurer, “We have a few customer requests trying to go out from our company; many are going to Max Bupa.” Moneylife has found that Star Health has also received good number of portability proposals. Only a few of Max Bupa’s customers are trying to go out when compared to the decent number of portability requests to join this company.
The question is why are standalone health insurers gaining? IRDA allows general insurance agents to also work for one standalone insurer. It means these agents are now diverting business from a general insurer to a standalone insurer. What could be the reason for agents to deflect the business? The commissions are same for renewal or new business; is there some other incentive offered by the standalone insurers? We don’t know. It could also be ex-agents of the insurance company who have details of clients and are using it for luring them with the portability bait.
It has also to do with company strategy to gain business from portability. Apollo Munich homepage has a link at the top to a portability guide, portability form, application form, etc. It has free portability reminder link on the homepage. Apollo Munich will send you a reminder email 60 days before your renewal along with a helpful guide on portability. In short, the company has taken proactive steps to gain from portability, which is a smart business strategy.
This nudge in business comes at a time when bancassurance exposure draft from IRDA brings cheer to standalone insurance companies. At present, one bank can sell products of any one insurer in the life and non-life segments. The draft allows one bank to tie up with one life, one non-life and one standalone health insurance company. This is a paradigm shift for standalone health insurers like Max Bupa, Apollo Munich and Star Health.
Interestingly, Moneylife has found some murmurs among private insurers about delays in getting medical and claim history from government-owned insurance companies. Some are saying it is just few days delay, instead of seven days it is taking 10-12 days. Others are saying that it is taking some about of follow-up to ensure government insurers are giving the information in timely manner. One insurer points out that it is taking longer than expected and they are handling it behind-the-scenes by talking with IRDA.
The volume of portability requests is low and hence the issues related to getting information from existing insurance companies have not reached a level of alarm. Once portability requests grow, it will be interesting to see if the delay in getting information from existing insurers leads to chaos. You can bet on it.
Some insurers have been tight-lipped about portability and did not want to divulge anything to Moneylife.
According to Fali Poncha, insurance industry veteran and executive chairman, IRICS Insurance Broking, “Despite best intentions on the past of the IRDA and a long journey of over a year, portability is likely to be more illusory than a reality. The need for portability is very real and IRDA’s recognition of the same is a step in the right direction. The real hurdle to making portability a success lies in the fact that the terms and conditions relating to pre-existing diseases (PED) and time-bound exclusions are not common to all insurers.”
Be prepared for a bumpy portability ride. It will work for simple and straightforward cases especially for young with no PED. For others, it is just an illusory offer from IRDA.
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Beware your smartphone may have some app installed in it, which might be sending your personal information to some unknown person
As technology goes to a new high, the perennial issue of privacy gets murkier. Even a small device like mobile phone could put you at risk. These ubiquitous cellphones could keep us under constant surveillance. According to a report from ConsumerAffairs.com, recently, Democratic US Senator for Minnesota, Al Franken, ordered an investigation into mobile software maker Carrier IQ after it was learnt that the company tracks and transmits personal information of the phone user- iPhones and Androids, without their knowing about it, through installed software. The company officially denied the charge.
Critics point out that given humongous sales of smartphones in India, and the weak surveillance systems in the country, Indian might also be at the risk of being monitored by some unauthorised people.
According to the report, “AT&T, Sprint, HTC, and Samsung have all confirmed that that their mobile phones integrate the Carrier IQ software.”
Back in India, an expert say that, for years now, during the confidential meetings in the US and the Europe, the attendees were asked to deposit their mobile phones outside, and it is a fact that people can listen to conversations in and around your mobile phone if they so desire, same is increasingly happening in India.
The software encrypts all sensitive data of the users, without informing them, including the location of the user, call records, letters typed while texting or browsing. All these personal data is then eventually sent back to the companies.
“Within the Indian context, where privacy is still not considered sacred, there is no dearth of providers who will do this for you for a fee,” says Veeresh Malik, veteran seaman and columnist of Moneylife. He explains, “As far as new generation smart phones are concerned, many of them happily hook in and exchange hand-shakes or even more with the nearest wireless network on continuous basis, even if the internet access is switched off.”
Sahil Baghla, president, Anti-Hacking Welfare Society, India, told Moneylife that, “Currently there are hackers, who can steal personal data from these smartphones. If this trend continues then in coming years, nothing will be secure. All the personal details, e-mails, phone banking will monitored by these foreign companies. There is an urgent need to strengthen our cyber security laws and surveillance system.”
In its recent exposure, WikiLeaks released documents showing that two Indian companies, Delhi based Shoghi, which monitors GSM communications and SMS keyword spotting and Indore-based Cleartrail Technologies which provides interception, analytic solution, and mass monitoring of IP among others. It tracks all the information of the people.
What could be the Solution for all this? Mr Malik believes that there is a great future for face to face meetings again, it seems, or manual typewriters. “Even photocopiers, printers and printer cartridges leave secret marks on paper so that they can be traced back to the printer or copier used, and since most printers or copiers are internet enabled devices now, through a variety of devices, it is easy to track back what was printed or photocopies back,” he said.
According to Yogesh Sapkale, deputy editor, Moneylife, ‘precaution’ is the keyword while dealing with security threats everywhere, be it smartphone or internet. He says, “Smartphone user need to be cautious and continuously monitor applications that are sending and receiving data in the background. In case of suspicion, either close that application or uninstall it. In addition, do not install apps received from unknown source or vendor.”
Nifty to move in the range of 4,970 and 5,170
The government’s flip-flop over FDI in multi-brand retail led the market down, snapping its three-day winning streak. In our Friday’s closing report we had mentioned that the Nifty should maintain itself above the day’s high to reach to the level of 5,170, else it may fall to 4,900. Today, the index almost reached Friday’s high of 5,063 but couldn’t maintain the momentum. From here we may see the benchmark moving between 4,970 and 5,170. The National Stock Exchange (NSE) saw a volume of 49.78 crore shares being trade, the lowest in the last 18 days (including today). The upmove will be staggered and the market may reverse anytime.
The market opened lower this morning on speculations that the government has put the proposed 51% foreign direct investment (FDI) in multi-brand retail on hold. Profit booking was seen after the benchmarks logged 7% gains last week. The Nifty opened 13 points down at 5,037 and the Sensex resumed trade at 16,812, a loss of 35 points over its previous close.
Metal, banking, oil & gas and retail stocks witnessed selling pressure amid volatile trade, keeping the indices in the negative terrain. The announcement by finance minister Pranab Mukherjee to keep FDI in multi-brand retail on hold pushed the market to the day’s low in late morning trade with the Nifty falling to 5,003 and the Sensex going back to 16,691.
But buying in select stocks pushed the indices into the green in noon trade helping the market hit the day’s high. At the highs, the Nifty touched 5,055 and the Sensex rose to 16,863. However, the gains were short-lived as the market fell again.
Choppy trade continued till the end of the session, with the market settling in the red, ending its three-day winning streak. At close of trade, the Nifty fell by 11 points to 5,039 and the Sensex settled at 16,805, down 42 points.
The advance-decline ratio on the NSE was almost equal at 834:828.
The broader indices, too, settled flat, but with a mixed bias. The BSE Mid-cap index shed .05% while the BSE Small-cap index rose 0.09%.
The top sectoral gainers were BSE Power (up 0.86%); BSE Capital Goods (up 0.77%); BSE PSU (up 0.24%) while the noteworthy losers were BSE Metal (down0.90%); BSE Capital Goods (down 0.75%) and BSE Fast Moving Consumer Goods (down 0.67%).
The key Sensex gainers were NTPC (up 2.50%); Jaiprakash Associates (2.45%); BHEL (up 1.96%); State Bank of India (up 1.17%) and Hindalco Industries (up 0.70%). The laggards were led by Tata Steel (down 1.73%); Sun Pharma (down 1.53%); Sterlite Industries (down 1.46%); Hero MotoCorp and ITC (down 0.99%).
JP Associates (up 2.60%); Axis Bank (up 2.52%); NTPC (up 2%); BHEL (up 1.95%) and PNB (up 1.70%) were the top performers on the Nifty today. HCL Technologies (down 2.46%); SAIL (down 2.41%); Reliance Power (down 2.38%); Tata Steel (down 2.18%) and Sterlite Ind (down 1.55%) ended at the bottom of the index.
Markets in Asia settled mostly higher on hopes of a resolution to the Eurozone debt crisis as European leaders meet this week to chalk out a rescue plan. Besides, the Italian government clearing a 30 billion euro austerity plan supported investor sentiment. However, the Chinese market fell on a decline in the country’s services sector. The HSBC Purchase Managers’ Index fell to 52.5 in November from 54.1 in the previous month, indicating a further slowdown in the economy.
The Hang Seng surged 0.73%; the Jakarta Composite added 0.03%; the KLSE Composite gained 0.06%; the Nikkei 225 rose 0.60% and the Seoul Composite advanced 0.36%. On the other hand, the Shanghai Composite declined 1.16%; the Straits Times fell 0.26% and the Taiwan Weighted lost 0.60%.
Back home, foreign institutional investors were net buyers of stocks totalling Rs596.89 crore on Friday but domestic institutional investors ended up selling equities worth Rs107.53 crore.
Gitanjali Gems’ wholly-owned subsidiary Aston Luxury Group has acquired 100% stake in Crown Aim, a Hong Kong-based company engaged in jewellery distribution to China, Japan, US, Middle East and Europe. Gitanjali Gems added 0.35% to close at Rs340.95 on the NSE.
HT Media (HTML) today said it has entered into an agreement for an equal joint venture (JV) with US-based Apollo Global Inc to roll out programmes and services in the education space. The JV will enable India’s business community to train and empower employees for a 21st century global workplace, it added. The stock gained 0.93% to settle at Rs124.75 on the NSE.
Pipe manufacturer Man Industries (India) has received orders totalling Rs515 crore from overseas clients for supply of large diametre pipes for the oil and gas sector. With the new orders, the company’s order book stands at Rs1,500 crore. The orders are to be executed in next nine to 12 months. The stock surged .25% to settle at Rs115.90 on the NSE.