State-run non-life insurers that have started setting up a common third-party administrator (TPA) would initially invest Rs. 1 billion. The four insurers plan to set up the TPA company in the next six months, the media reports said.
The four state-owned non-life insurers are setting up a common third-party administrator to settle medical insurance claims. The move is aimed at cutting down huge claims ratio and enhancing profits.
The four state-owned insurers include National Insurance, New India Assurance, Oriental Insurance and United India Insurance. According to insurers, the initial cost to set up TPA would be recovered over the years as claims drop. Policyholders can expect a correction in premium as the 5% commission paid to TPAs for settling claims would be passed on to them.
Each of the four state-owned insurance company will hold stake in the TPA company. The joint venture agreement will be signed soon. The four insurers said that they have expertise in handling claims, the reports concluded.
