US-based Reed Group plans joint venture in India to unveil income protection plan

KOLKATA: Colorado-based Reed Group, which analyses medical data, is planning to set up a joint venture in India to promote data analytics-based sickness income protection insurance policy.

Income protection policy to cover the risk of getting unemployed due to sickness or sickness-led temporary disablement is not available in Indian market.

"This kind of insurance is a loss making proposition for insurers worldwide because disability duration can't be controlled as long as doctors determine the length of the claim," said John Harrison, director of Reed Group Asia Pacific.

The solution, he said, is not to allow doctors to collusion and use normal course of recovery data to design the product. Use of advanced data analytics is known for taking insurance far beyond the boundaries of traditional actuarial science.

The group is scouting for a local partner for better understanding of the Indian market. It is talking to an insurance company as well as a healthcare data analytics company for partnership.

"We were waiting for the government to raise the foreign direct investment limit to 49%. A higher foreign shareholding would improve governance and bring in expertise in the market," Harrison said.

He said that the income protection product using recovery data can be profitable here as India would be a new market for this product.

Local insurers offer income protection plan to policyholders who are incapacitated and hence unable to work due to accident. Some policies also cover the risk of temporary total disablement due to accident. But income protection needed due to sickness does not available here.

The group plans to design the product and sell it to insurers. It plans to open its office in Kolkata.