مطالعات مدیریت راهبردی (Jun 2024)
Pathology of Group Health Insurance rating in the Iran's Insurance Industry
Abstract
Group health insurance pricing is a key component in purchasing these products; in this way, if the price set for group health coverage is too high, it can easily dissuade policyholders from staying with that company, and if it is too low, it can make it difficult for insurance companies to fulfill their obligations. Preliminary investigations have shown that two main factors cause the increase of the loss ratio of health insurance. First, the determination of non-technical premium rates due to the low premiums received or price reduction in the supplementary health insurance market and secondly, the high medical insurance losses which can be due to several reasons. Among the challenges of high health insurance losses in Iran related to pricing, we can mention the inability of insurance companies to increase insurance premiums in proportion to the increase in tariffs and the unrealistic premiums in health insurances. In fact, prices should reflect real costs and take into account the goals of the broader health insurance system. In this regard, considering that group health insurances are always among the loss-making fields in the Iran's insurance industry and have a high loss ratio in the insurance industry, it is very important to identify the challenges of group health insurance rating, which will be discussed in this paper. The research method used is of a qualitative type, which research data was collected using library study and interview. The statistical population of the research includes managers and health insurance specialists in the Iran's insurance industry, who were interviewed by snowball sampling and semi-structured interviews until theoretical saturation was reached. Based on the results of the research, the main challenges that can be posed in the pricing of group health insurance can be placed in three categories: risk assessment (such as the use of traditional methods and non-compliance with actuarial principles, non-proportion of insurance premiums with services and tariffs and their full price, freedom of action of insurance companies, etc.), holding tenders and false competition (such as the disproportion of insurance premiums with competitive items in the market, price cutting and unhealthy competition, focusing on attracting portfolios instead of focusing on providing appropriate services, etc.) and legal and regulatory (such as non-enforceability of some by-laws, lack of proper monitoring of group medical insurance rates, etc.), among which, insurance companies' dumping and providing non-technical rates to attract customers has a high share in these challenges. In order to solve the existing challenges in this field, the insurance industry can use different solutions. In the regulatory sector, the supervisory body can set up a system for registering large tenders and evaluate all the requests of the policyholders based on the coverages that can be provided in Regulation 99 of the Supreme Insurance Council and on the other hand, evaluate the rates provided by the insurance companies in order to ensure the appropriateness of the rates. In this regard, the supervisory body can annually set rates as the minimum base rate in group health insurance and oblige insurance companies to apply this rate floor. In the risk assessment section, insurers can strengthen the databases to monitor the insurance behavior of their policyholders and identify and apply risk bases for accurate risk assessment.
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