Turkey: Agents body calls for customised medical insurance pricing
Source: Middle East Insurance Review | Jan 2019
The health insurance market should switch to a personalised premium calculation system that prices medical coverage according to the traits of the insured, said Mr Resit Cakas, chairman of the Insurance Agents Association (SAB).
Health insurance policyholders of almost every insurance company are affected by similar increases in premium rates under a tariff system which has been largely unchanged for nearly 30 years, he said in a report by Insurance Gazette.
Recently, some insurers have introduced some innovations by diversifying their products. But the essence remains the same. That is to say, all health insurers set a standard pricing according to age group. Premium increases are applied equally to all insureds.
In addition, he said health insurers suffer technical losses despite hikes in premiums.
Mr Cakas proposed several recommendations for the insured to be charged affordable prices and for insurers to post technical profits:
- Current health insurance tariffs should be urgently reviewed. Instead of setting the same premium rates for individuals within the same age group, special conditions, habits, nature of jobs, as well as the province and district of residence of each insured should be thoroughly analysed and pricing adjusted accordingly. For example, an office worker should not pay the same premium as a policyholder with a more risky job.
- Insurance policies should be priced according to coverage for diseases. Thus, premiums should be lower for those who are not covered for certain illnesses.
- The levels and frequency of claims made by a policyholder should be reviewed, and the insurance cover priced accordingly.
- Special hospital agreements should be reviewed. In particular, insurers should strengthen cooperation with medical institutions during the healthcare provision phase. M