Bajaj Allianz General Insurance is collecting detailed customer information which together with the claims experience will help it to arrive at the right price for health and motor insurance

TA Ramalingam, head-underwriting, Bajaj Allianz General Insurance, says motor insurance has better data availability than health insurance so far. In an interview to Moneylife, he was optimistic that health insurance, like motor insurance, will be able to offer the right price for good policyholders. Excerpts:

You mentioned about in-house data for analysis. Do you use the data from the Insurance Information Bureau (IIB), a body of the Insurance Regulatory and Development Authority (IRDA)?

We depend on management information systems and constant feedback from our in-house claims processing team (health administration team, or HAT). It sends signals based on the claims experience to help us refine the underwriting process. We do look at IIB at the macro level to crosscheck our experience, like on the top five diseases and so on.

IIB data may not be accurate. Your comments.

We may get misled if we entirely rely on it. We may end up on a different track. Some insurers may not give data in the format that is actually wanted by IIB. For example, new insurers may give data in sub ICD level rather than ICD level. (ICD stands for International Classification of Diseases.) We depend on our data analysis and just crosscheck with IIB at the macro level. The more qualitative data we get, the better it is from the business perspective. If the common insurance database is available with accurate information, it will help the industry.

You have rich data from your claims experience. How would you improve on it? New insurers have a lot of questions at the time of proposal.

New companies are capturing detailed information about customer profile and medical conditions. It helps with proper customer segmentation. Beyond a certain level, we can't just fight on price. We will be competitive with proper segmentation. The detailed data capture has to happen to offer right pricing for customers. It will happen soon in health insurance. Agents will see other agents doing it and will follow suit.

Car insurance has started capturing a lot of information at the proposal stage to offer better premium rates for good drivers compared to bad drivers.

Exactly. Motor is doing it to a great extent and health will follow it. After all, motor and health are big portfolios of general insurance. Today, the available information is not good enough. The actuaries cannot do proper pricing due to lack of complete information. Right risks should get the right price.

(The first part of this interview was published on Friday. Read, "Bajaj Allianz General Insurance: Senior citizen mediclaim product has been profitable")