More than 100,000 health insurance policies were switched to private-sector insurers in the financial year ended March 2017 (FY2017), according to data collected by DNA Money.
The number of health policies which are ported successfully is considered small.
One of the main reasons for the low portability rate is that customers normally realise the need to port after a claim is made. Given that most claims are made because of lifestyle ailments, the new insurers approached may refuse to accept the policies offered because of the policyholders' existing health conditions, said Mr M Ravichandran, President – Insurance at Tata AIG General Insurance. Another reason is that agents are not remunerated for referring policyholders who wish to switch insurers.
Portability helps a customer only as long as the health insurance policy is profitable for the new insurer, that is, the customer has been paying the premium regularly and has not filed any claims.
Mr Antony Jacob, CEO of Apollo Munich Health Insurance, which saw 21,000 inward policies, says that transfers are made in situations where a customer is dissatisfied with his or her existing insurer. Unpleasant episodes, including reasons like denied claims, are big triggers.
Health insurance portability has been allowed by the IRDAI since 2011.