When Mint began rating health insurance plans, we just looked for the cheapest policies. We listed the cheapest plans in the market until one day a plan that was the cheapest—and modelled after Bata pricing—revised its premiums to be among the most expensive. The revision—that resulted in a hike of up to 200%—was a hard knock because we realized that listing health insurance plans by premiums alone was no value-add to our readers. So we began to include benefits that a policy carries—for example, a no-claim bonus, no caps on room rent. But claims is really where the moment of truth sits in an insurance policy, so we began including claims data as well.

The rating has become far more sophisticated, but the backlash from insurance firms continues. In fact, the first edition of the rating got us many stinkers accusing us of getting the data wrong. However, it was not us, but the firms that had not published correct data in their public disclosures. From the next year, we began the painstaking task of cross-checking the information collected with the insurer. We would use the data only once the discrepancies were ironed out. A team at SecureNow Insurance Broker Pvt. Ltd collects the data each year and this is then sent to each insurer for verification, but only a handful of them get back to us on time. Some send us information after repeated reminders and some, even after a month of reminding, simply don’t get back.

And then there are firms who take great interest in these ratings and share good ideas which we weave into our ratings. So every year, rating health insurance takes us back to the drawing board to re-evaluate our parameters. This year, for instance, we have given a higher weightage to claims because now we are also rating claims on the basis of the time it takes the insurer to settle it. We continue to look at claims settlement and claims complaints.

In bringing out Mint SecureNow Mediclaim Ratings every year, we attempt to decode a complicated financial product to give you league tables and this effort rests on a key parameter: data. And each year that we tweak our ratings to offer meaningful value to our readers, we find ourselves standing before the wall of fuzzy data disclosure. For instance, the first time we published our ratings, a very upset insurer got back to us complaining that we had not segregated claims data for group and retail policies. Group policies tend to have a better claims settlement rate and so insurers with a larger book of group will show a better settlement rate overall. But here is the problem: the Insurance Regulatory and Development Authority of India (Irdai) does not mandate a segregated group and individual disclosure and there is nothing we can do about it. This is something the industry needs to solve rather than shoot the messenger. We did ask all the firms in the listing for this data but only a handful replied leaving us with no option but to stay with public disclosures. We are still hoping that the insurance regulator would see merit in segregating the claims data.

One disclosure issue that the regulator did solve is when it made it clear in 2016 that no claims would be reported as “closed" in the books of insurers. This was important because insurers report claims in buckets: claims paid, rejected, closed and outstanding. Closed claims are those that are unpaid for want of more documents from the insured person or where the policyholder hasn’t pursued the claim further. Forking the claims into closed claims dilutes claims rejection and to address this in our ratings, we decided to look at claims settled as a percentage of total claims on which a decision was taken by the insurer whether it was closed, settled or repudiated. The regulations are yet to be followed in spirit as some insurers continue to report closed claims. In fact, after we published MSMR for this year, an insurer called up complaining that we were not following industry norms to look at claims settled as a percentage of claims settled plus claims rejected and were throwing closed claims to the mix. By ignoring closed claims, settlement rate—which was a little less than 80%—was above 90%.

The insurance regulator so far is making all the right noises around health insurance by looking carefully at exclusions, but disclosures need to be sharper and this is the easiest to implement as it doesn’t need a product overhaul or re-pricing. Data reporting needs to get standardized and more nuanced with no tolerance for insurers who don’t toe the line. By giving us clean and sharper data, the regulator only makes its job of protecting customers that much easier.

Deepti Bhaskaran is editor, personal finance, Mint