NEW DELHI: All four public sector general insurance companies are in the red, mainly due to the over Rs 26,300 crore losses incurred in their health portfolio in five years from 2016-17 to 2020-21, a report of the Comptroller and Auditor General (CAG) of India has revealed.
In its report tabled in Parliament on Friday, the CAG said the losses have been caused on account of group insurance policies where premium charged was less and claim outgo was more in comparison to retail policies. The audit covered New India Insurance Company Limited, United India Insurance Company Limited, Oriental Insurance Company Limited and National Insurance Company Limited and put their combined losses at Rs 26,364 crore.
About 10 years ago, PSU insurers took the initiative to have their own network of hospitals by forming a Preferred Provider Network (PPN). It found the four PSU insurers together have PPN agreements with only 2,552 hospitals (as against 9,900 hospitals for Star Health Insurance Co. Ltd and 10,000 hospitals for HDFC Ergo General Insurance Co. Ltd). “This indicates inadequate efforts by PSU insurers in tying up with a greater number of hospitals,” the auditor has said.