Medical insurance grows fastest and loses money fastest. Five controls that change that

Medical insurance is the fastest-growing line in the Iraqi market. It is also the one where we see companies lose money fastest, and for the same reason every time: the product looks simple from the sales side and is anything but simple from the technical side.

Four parties sit around one medical file: the insurer, the insured, the hospital or clinic, and often a claims administrator. Each has its own interest. If the insurer does not hold the technical thread, the other three will pull it.

Here are the five controls we teach, in the order we teach them.

1. Read your own policy like an auditor

The benefits table, the exclusions, the waiting periods and the pre-existing conditions clause are the contract. Most claims disputes trace back to a line nobody read carefully. Before a product goes on sale, one person who did not write it should read it against three imaginary claims.

2. Price from the loss ratio, not from the market

The loss ratio is the compass of a medical portfolio. Compute it per group, per renewal, per provider if you can. A renewal decision has three honest outcomes: renew as is, reprice, or decline. "Match the competitor's price" is not one of them.

3. Underwrite groups by their size, not by their name

A small group behaves like a set of individuals and needs medical questions. A large group spreads risk and needs a different approach to premium components: expected cost, expenses, margin. Mixing the two methods is how portfolios bleed.

4. Treat the provider network as a contract, not a list

Price schedules, discounts, network tiers and what each tier does to the premium are commercial terms. Write them, sign them, and audit against them. A network you cannot audit is a network that sets your prices for you.

5. Put a step between a claim and a payment

Pre-approval, direct billing or reimbursement, technical audit, decision, communication. Every step is a place to catch fraud, waste and abuse: inflated bills, phantom services, split invoices on the provider side; identity substitution and hidden conditions on the insured side. If you outsource claims to an administrator, keep the indicators and the audit rights in your own hands.

None of this needs new technology. It needs people who have done it on real cases. That is why our medical insurance programme spends more than half its time on exercises: a real policy, a real portfolio's loss ratio, and claims seeded with fraud for participants to find. Ask us for the outline.