Reliance General has been fighting fires it created by a hefty 500% increase in the mediclaim premium. This has led to a low renewal ratio, on account of which the company is believed to have approached IRDA to reduce the premium. But the regulator has turned down its request

Reliance HealthWise policyholders don't seem to be in a mood to pay a hefty 500% premium increase even if it means losing a four-year waiting period on pre-existing conditions. Following the sharp hike in the premium last year, Reliance is losing customers rapidly. It may even have approached the regulator to rollback its premiums, though the company denies it.

According to sources in the insurance industry, "Reliance General's renewal ratio for health insurance has been at 10% after the almost 500% increase in premiums last year. In recent months, after Vijay Pawar (CEO and ED) took over the charge, the renewal ratio has increased to 25%, but it is still way below the industry average of the 90% renewal ratio."

However, according to Sharad Goel, Reliance Capital Corporate Communications, "These numbers are incorrect and much below the actual figures." A source in the insurance industry said, "Reliance General approached the Insurance Regulatory and Development Authority (IRDA) recently to reduce the premiums because of its impact on business. IRDA refused to do so, saying that once the premium is hiked due to the adverse claims ratio, it cannot be reduced." Reliance, however, has denied approaching IRDA to reduce premiums.

An increase in the premium by almost 500% in Reliance HealthWise has put off customers. (Read, 'Unhealthy rise in Reliance HealthWise premiums' ) The full impact of the unhealthy increase in premium by almost 500% will be seen over a period. Reliance General's market share has been reducing in almost all segments. (Read, 'Reliance General market share plunges by 40%' )

According to a broking house, more than 70% of Reliance customers have switched to another insurer due to Reliance's premium hike. "Due to the losses made in the past three years, Reliance had to cover up the same and revise the premium that resulted in the hike. The market reaction to the hike has led Reliance to revamp its portfolio of health policies. As a result, Reliance health insurance is not perceived as competitive in the market," said an official at another broking house. — Moneylife Digital Team