Commerce
Research Paper
E-ISSN No : 2454-9916 | Volume : 5 | Issue : 10 | Oct 2019
PREMIUM COLLECTION AND INFRASTRUCTURE INVESTMENT OF PUBLIC HEALTH INSURANCE COMPANIES IN INDIA: A COMPARATIVE ANALYSIS Dr. Shib Pada Patra Assistant Professor, Department of Commerce, Chittaranjan College, Kolkata, West Bengal, India. ABSTRACT Health insurance business is important business in India. India has vast population and they live mainly in joint family. Family can live healthy when they cover their lives with health insurance. The health insurance reduces the worry of the health problems. Heath insurance business depends upon premium collection and its investment in investment instruments which boost the premium collection. Infrastructure investment is one of the important parts of investment portfolio. Relationship between premium collection and investment infrastructure is studied in this paper for four public health insurance companies using the simple linear regression (SLR) analysis. In this paper, premium collection of Health Insurance Company is powerfully related to the infrastructure investment and National Insurance Co. Ltd. (NI) is successfully invested his health premium collection in infrastructure investment. KEYWORDS: SLR, Premium Collection, Infrastructure Investment, IRDA, Portfolio Investment.
INTRODUCTION: Family can live with healthy life without having worry about their health problems. The health insurance reduces the worry about the health problems. Health insurance is purchased in advance by an individual or a group after paying a fee called premium. This collected premium of health insurance companies is invested as per IRDA portfolio investment regulation in financial markets for good returns to pay expenses and claim of insured person. The health care needs are vast in India. For better business of health insurance companies in India, infrastructure investment is one of the important investment areas in investment portfolio of health insurance business. The present paper is studied on the relationship between health insurance premium collection and infrastructure investments using simple linear regression (SLR) analysis. REVIEW OF LITERATURE: Bhole, L. M. (2004). in 'Financial Institutions and Markets., Khan, M. Y. (2000). in 'Indian Financial System', Pathak, B. (2006). in The Indian Financial System' , Saha, S. S. (2013). in Indian Financial System and Markets', they discuss in their books mainly the IRDA regulation, premium collection, investment pattren, sectorwise investment, annual reports. Nagaraju, Y. (2014). studies in journal 'A Study on Performance of Health Insurance Schemes in India'. on coverage of health insurance scheme, awareness of the beneficiaries and satisfaction towards scheme, service quality of health care. Swathi, K. & Anuradha, R. (2017). in their journal 'Health Insurance in India-An Overview' study on the concept and benefits of health insurance, overview of health insurance in India. Anita, A. (2008). in her journal 'Emerging Health Insurance in India- An Overview' discusses the health insurance scenario in India, health insurance products in India, role of IRDA, different health insurance plans and privatization of health insurance. Acosta, R. S. (2014). describes in journal 'Effects of Health Insurance Concentration Market on Insurance Coverage in Colombia', structure of health insurance market in Colombia, role of insurance as a guarantee off access of health insurance. In the above study, literatures relating to relation between health insurance premium collection and infrastructures investments on Health Insurance are not sufficient. DATA AND METHODOLOGY: Nature of Research
Exploratory in nature
Nature of Data
Secondary in nature
Source of Data
Books Journal Articles Websites GIC Annual Reports
Sample Size (Four public non-life insurance companies are selected) Period of Study
Objectives
Statistical Tools
To find the relation between health insurance premium collection and infrastructures investments
Simple Linear Regression Analysis
OBJECTIVES OF THE STUDY: The present study is made to find the following objectives: Ÿ
To find the relation between health insurance premium collection and infrastructures investment;
Ÿ
To identify the better infrastructures investment among four public health insurance companies.
RESULT AND DISCUSSION: In this paper, the premium collection (Table-II) and its partial investment in Infrastructure investment (Table-I) of a National Insurance Co. Ltd. (NI), The New India Assurance Co. Ltd. ( NIA), Oriental Insurance Co. Ltd. ( OI) and United India Insurance Co. Ltd. ( UII) shown in following way. Table-I: Infrastructure investment (Rs in Crore) YEAR
NI
NIA
OI
UII
2004-2005
600.49
1050.08
460.01
691.25
2005-2006
719.87
1206.33
527.16
684.55
2006-2007
836.83
1279.13
689.70
730.03
2007-2008
876.61
1783.04
817.00
810.68
2008-2009
1083.46
1781.67
574.72
1441.96
2009-2010
1209.25
1792.49
827.28
1168.64
2010-2011
1679.99
1751.62
1056.55
1569.18
2011-2012
2173.94
1794.62
1229.75
2082.92
2012-2013
2486.97
2310.56
1591.16
2508.39
2013-2014
2494.55
2674.84
1765.49
3343.25
Total
14161.96
17424.38
9538.82
15030.85
Source: IRDA, Annual Reports
National Insurance Co. Ltd. (NI) The New India Assurance Co. Ltd. ( NIA) Oriental Insurance Co. Ltd. ( OI) United India Insurance Co. Ltd. (UII) 2004-2005 to 2013-2014
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Research Paper
E-ISSN No : 2454-9916 | Volume : 5 | Issue : 10 | Oct 2019
Table-II: Premium Collection (within and outside India) (Rs in Crore) Year
NI
NIA
OI
UII
2004-2005
3810.65
5103.16
3090.55
2944.46
2005-2006
3536.34
5675.54
3609.77
3154.78
2006-2007
3827.12
5936.78
4020.78
3498.77
2007-2008
4021.97
6151.97
3900.22
3739.56
2008-2009
4295.85
6455.79
4077.89
4277.77
2009-2010
4645.99
7099.14
4854.67
5239.05
2010-2011
6245.17
8225.51
5569.88
6376.66
2011-2012
7815.69
10073.88
6194.6
8179.29
2012-2013
9194.61
11873.49
6737.66
9266.04
2013-201
10260.98
13727.61
7282.54
9708.93
Total
57654.37
80322.87
49338.56
56385.31
Source: IRDA, Annual Reports Findings: In above Table-I and Table-II, it is shows that NIA has invested more in infrastructure investment and also collected more health insurance premium during the study period among four public health insurance companies where OI has invested comparatively less amount in infrastructure investment and also collected lesser health insurance premium.
CONCLUSION: This paper shows that premium collection of Health Insurance Company is strongly related to the infrastructure investment in Indian health insurance market. In the study, National Insurance Co. Ltd. (NI) is effectively invested his health premium collection in infrastructure investment as compared to The New India Assurance Co. Ltd. ( NIA), Oriental Insurance Co. Ltd. ( OI) and United India Insurance Co. Ltd. ( UII). REFERENCES: Books: 1.
Bhole, L. M. (2004). Financial Institutions and Markets. New Delhi: TATA McGraw Hill Publishing Company Limited.
2.
Khan, M. Y. (2000). Indian Financial System. New Delhi: Tata McGraw Hill Publishing Company Limited.
3.
Pathak, B. (2006). The Indian Financial System. New Delhi: Pearson Education.
4.
Saha, S. S. (2013). Indian Financial System and Markets. New Delhi: Tata McGraw Hill Education Private Limited.
Journal Articles: 5.
Nagaraju, Y. (2014). A Study on Performance of health insurance Schemes in India. International Journal of Innovative Research and Practices, 1-11
6.
Swathi, K. & Anuradha, R. (2017). Health Insurance in India-An overview. IOSR Journal of Business and Management, 1-4
7.
Anita, A. (2008). Emerging Health Insurance in India- An overview. 10 Global Conference of Actuaries, 1-17
8.
Acosta, R. S. (2014). Effects of Health Insurance Concentration Market on Insurance Coverage in Colombia, Journal of Competiveness, 1-17
Databases:
In this section, Simple Linear Regression (SLR) Analysis is made to find the relation between health insurance premium and infrastructure investment. For this purpose, assumptions are shown in Table-III and result of SLR analysis is shown in Table-IV.
9.
IRDA, Annual Report, 2004-2005
10. RDA, Annual Report, 2005-2006 11. IRDA ,Annual Report,2006-2007 12. IRDA, Annual Report, 2007-2008
Table-III: Assumptions of SLR Analysis
13. IRDA, Annual Report, 2008-2009
SL. NO.
Assumptions
Statistical Test
Condition to Fulfil
Fulfilled/Not
14. IRDA, Annual Report, 2009-2010
1
Normality of residuals
Shapiro−Wilk test
P−Value >0.05
Fulfilled
16. IRDA, Annual Report, 2011-2012
2
Independence of residuals
Durbin-Watson test
Value is 2 or nearly 2
Fulfilled
18. IRDA, Annual Report, 2013-2014
3
Linearity between dependent and independent variable
ANOVA
P−Value < 0.05
Fulfilled
4
Homoscedasticity of residual
Breusch−Pagan (BP) test
P−Value >0.05
Fulfilled
VIF<10
Fulfilled
5
Variance No collinearity or Inflation Factor no multicollinearity (VIF)
15. IRDA, Annual Report, 2010-2011 17. IRDA, Annual Report, 2012-2013
Source: Computed by the Author Findings: The result of SLR assumptions in Table-III shows that all five assumptions are fulfilled and SLR analysis is used for the present study. SLR analysis: In this analysis, taking premium collection as depended variable (DV) and Infrastructure investment as independent variable (IV), the analysis is made using the SPSS 20.0. The SPSS result of SLR for National Insurance Co. Ltd. (NI), The New India Assurance Co. Ltd. (NIA), Oriental Insurance Co. Ltd. (OI) and United India Insurance Co. Ltd. (UII) is shown in Table-IV. Table-IV: Result of Estimated standardized Coefficients Parameter
Standardized Coefficient (Beta)
NI
0.981
NIA
0.902
OI
0.973
UII
0.959
Findings: The Table-IV finds that relationship exists between Infrastructure investment and premium collection of four public Health Insurance Company during the study period 2004-2005 to 2013-2014 and the study shows that Infrastructure investment of National Insurance Co. Ltd. (NI) has an important impact to increase the premium collection in Indian health insurance market.
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