Stricter norms for standardisation of health insurance products can hurt innovation, Antony Jacob, CEO, Apollo Munich Health Insurance, tells
Sarbajeet K. Sen and
Chandralekha Mukerji.How do you view the Irda's (Insurance Regulatory Authority of India) guidelines on portability of health insurance products which is to kick in on 1 July?
It's a customer-centric move as it will allow flexibility to the insured. The move will call for improved service requirements from all insurance players. On the other hand, it is expected to bring in new benchmarks in delivery mechanisms for the insurance players. The move would require certain changes in the processes followed by the insurance companies, but all regulatory requirements are paramount.Would it benefit the insurance industry?
The move promises to be beneficial in the long run for the industry as well. Every player will have to abide by minimum service standards and requirements. Insurers need to follow their underwriting principles when accepting a proposal. Consumers should place a request to part with the insurer at least 45 days prior to the renewal date. This will enable the incumbent insurer to meet all underwriting guidelines before accepting a risk.Do you think standardisation of products will be required to bring in full portability?
Every policy is unique and is guided by an underwriting principle. Terms and conditions, as well as coverage for pre-existing diseases and waiting periods for various diseases would be as per the applicable policy terms and conditions of a particular company. Hence, standardisation of products could be tough to achieve. Stricter norms for product standardisation can also become counter-productive for innovation.The health insurance segment is the fastest growing among all general insurance business line. What are the trends you are seeing?
Though the health insurance industry has been growing at around 40% annually, Apollo Munich's growth so far this year has been over 100%. By March 2011, we hope to triple our premium income to Rs 330 crore over last year's Rs 100 crore.What are the factors driving such growth?
It is a combination of factors. I feel that awareness on the need for health cover has increased considerably. We are also finding that the people who are covered by the group schemes with companies are also opting for an additional retail policy just in case they move away from their jobs, leave the groups or retire. People are also becoming conscious of the rising healthcare costs. Lifestyle changes are also impacting the health of a person, which is prompting people to look at health covers.
Are you seeing any change in the age profile of your consumers?
|"The average age of our customers is coming down below 45 years, closer to 40."|
In the past, the 45-plus were keen buyers of health insurance because they were more conscious of healthcare costs. But in the last 12 months or so, we do have quite a lot of people coming in who are under 45. The average age of our insured population is coming down below 45 years, closer to 40.There has been increasing competition in the health space with life companies also offering health products. How do you see the emerging competition?
My understanding of the products rolled out by the life insurers is that most of them, if not all, are the benefit policies. So, it is a bullet payment on the happening of an event or the occurrence of a particular critical illness. You get a full lump-sum amount in one shot. I don't believe any of them are in the indemnity space where the insurer indemnifies customers for hospitalisation of any kind, not necessarily linked to a type of illness or a critical illness. If at all there are, they are very few.
However, it is possible that some of the life companies will also look at indemnity. So, I believe there will be competition from the life sector, from the general insurance sector and from stand-alone health insurers like us. I think India is going to see more companies bring out health insurance products and related services.Companies are raising the maximum sum insured offered on their policies. How do you see the trend?
Health insurance in India is in a nascent stage. We want people to see health insurance as a priority. To get them in, I believe the right approach would be to have products and services in the Rs 2-5 lakh category because that is where people would want to get in, taste it and then think about getting bigger health insurance covers.Individuals in the high income bracket, particularly the high net worth individuals, may look at higher covers, maybe, Rs 10 lakh or higher.
I believe a right size of cover for this country is around Rs 5 lakh. It would not cover every case of hospitalisation, but I think it would cover a high percentage. If you want to play safe, I would suggest a cover of Rs 10 lakh, plus another Rs 10 lakh for critical illness. It is important to have higher offerings in your bouquet of products, but the demand for higher covers is still very limited.What are the new products you are working on?
We are shortly going to come up with a unique top-up product. Though we have got approvals for it, it might not be the right time to talk about it. At the moment, we have a gap in our products. The entry age for senior citizens is restricted to 65. We want to allow every citizen of India to buy a policy.