Portability Development - Many Dimensions

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Let’s imagine any customer service or loyalty program that we may have been part of. Our usage of the program can give us some rewards, points and privileges over time which can be claimed at later stage. Now let’s imagine that we shift to another loyalty program. It’s obvious that the privileges will remain on the old program and cannot be carried forward to the new one. Would it not be great if the same could be carried forward even on the new program?? One may say that's too good to be true in any business. But there is one business realm where these accrued benefits can actually be carried forward or "Ported" And that is in Health Insurance.

?The Insurance Regulator introduced the concept of Portability with respect to a Health Insurance Policy in 2011. As per this concept, the policy holder can carry forward all the credits for pre-existing conditions as well as other timebound exclusions, while switching from one insurance provider to another. The Policyholder is also eligible for all other "Continuity Benefits" under the policy - like No Claim Bonuses, Free Annual Medical Checks etc.

?Some Specific Rights that the regulation has provided to the policy holder:

1. Policyholder can port a policy (individual or family) from a general insurance provider to a specialized health insurance provider, and vice versa. The new insurer is liable to provide the policyholder a health policy of at least the sum insured under the previous policy.

2. New insurer is liable to provide the same credit rating with respect to the pre-existing conditions that the policyholder has accrued with the previous insurer.

3. The Previous insurer and the incumbent insurer are required to complete the porting process within the stipulated timeframe as provided in the regulation

?As per the process, the policyholder submits a written application to its present insurance company to shift the policy to a new insurer. The application is required to be made at least 45 days prior to the policy renewal date, mentioning the name of the insurance company to which the policyholder wants to switch his/her policy. There must not be any renewal gaps when you want to port your insurance policy. If the policy has lapsed, the new insurer will not accept your portability request. No fee is charged for portability. A differential premium may be payable for the new plan, depending upon the benefits and commensurate pricing.

?Key Scenarios that have emerged: Awareness has really gone up only in the past four years. The pandemic was a key development which brought focus on to health plan and related conversations like portability The pandemic has jump-shifted evolution in benefits structures in health plans, many new plans and structures have come in and policyholders now have the opportunity to move to them from their present plans. Important to note that not all plans are port-suitable. It’s imperative that the incumbent insurer is given the time and opportunity to assess the compatibility of the benefit structures and confirm the porting. Hence the forty-five days heads-up period before renewal date is extremely important.

?Given increasing incidence of porting in past few years, benefit structures for health plans are becoming more homogenized (i.e., like each other). This is required for seamless comparison of plans to evaluate portability. While regulator has been nudging for more standardization of benefits structures in health plans, Insurers may feel that they are losing the zing that comes from differentiated benefit structures.

?My own view is that, for long, health insurance has been amongst the most opaque and "tough-to-compare" products across the board. The relative standardization will help address that situation and insurers will still continue to push the envelope in their quest for differentiation.

?While porting is commonly understood as moving from one insurer to another, one can also port policies within the same insurer's product suite.

?Some takeaways - Penetration of portability is still low and well-below the levels that seem reasonably likely for our health insurance context. With increased focus on health plans at customer's end, this will change over the next decade. We are seeing Inclusion of New benefits like OPD, No-Claim Bonus Protection for smaller claims, curated structures which can be used flexibly for different customer segments / needs Heightened action in this space will keep insurers nimble, customer-centric and conscious of the moments of truth in the customer journey with new-age tech inputs like AI and Machine learning, we will see rapid strides in evolution on risk underwriting, customer experience and claims management.

?Personally, I would like to see impact of new-age technologies and processes to bring in improvements in customer experience on areas like Reduction in forty-five days period for Porting evaluation, a seamless process for porting with minimal documentation and exchange of emails for the transaction, etc. All-in-All, interesting times ahead and very keen to watch the developments in this space.

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