Insurers seek a common repository for health data | Economic Times

Mumbai: Amid a sharp increase in insurance application rejections for term and health covers owing to new co-morbidity risks in the aftermath of the coronavirus, India’s insurance industry is seeking access to a common database for health data, like CIBIL.Such a repository functional under the aegis of Insurance Information Bureau (IIB) can help in curtailing losses for insurers on account of frauds. It can also reduce compliance processes for prospective policyholders in applying for new health or term covers where typically furnishing health and income records are mandatory, said industry insiders.While the Insurance Regulatory and Development Authority of India (IRDAI) is learned to be studying the applicability of such a common database, some private industry forums have put forth their representations to both IRDAI and IIB on the matter, sources in the know told ET.“The IRDAI is aware of the issue and such a project can be initiated under the expertise of IIB,” according to an industry official requesting anonymity.IRDAI didn’t respond to ET’s queries. “Access to a common health database across all stakeholders in the insurance lifecycle such as the insurers, TPAs (third party administrators) and hospitals can significantly reduce challenges faced by us in ensuring pricing parity and underwriting control,” the person added.According to Vibha Padalkar, the chief executive of HDFC Life, access to such a platform can improve the underwriting standards while issuing term covers and reduce costs and improve product penetration, drawing parallels with the introduction of credit bureaus for retail loans in India in early 2000s.“The parallel is CIBIL and other databases for the lending industry. Access to such information has helped NBFCs underwrite to those at the bottom of the pyramid,” Padalkar said, adding that it can help insurers convert applications into policies more efficiently. “It must be subject to consumer consent…there are plenty of examples in the international context,” she added.While Padalkar said that the discussions around such a common database are still at a nascent stage, it is the need of the hour, she emphasised. Industry experts that ET spoke with concurred with the view. However, for public implementation several safeguards must be ensured to protect customers, they said.According Srinath Sridhar, an insurance industry expert and a visiting fellow at ORF, data confidentiality would be crucial. Another factor which must be ensured is that past health records must not be used to deny health insurance to anyone, he added.81676506“As an idea it’s a great one as the pandemic has increased the awareness for health and life insurance,” said Sridhar. “Such a database can be used for not just underwriting, but product innovation and real-time tracking to allow stakeholders to raise red flags…data allocation and formatting issues must be sorted through by IRDAI.”Since the onset of the pandemic, India’s insurance industry has been stringent in the issuance of new policies. The rejection rates have increased by 10-15 percentage points according to industry insiders. There is no public data on India’s insurance rejection rates – before pandemic, for health, it was estimated to be 10-15%, while for term covers it was around 15-20%.