The penetration of health insurance in India is dismal and the few people who have health policies depend mostly on the benefits provided by employers. Is this a challenge?-1.jpg)
The health insurance industry in India is nascent, with just 2 per cent penetration. So, effectively, 98 per cent of the population still needs health cover. Healthcare itself needs to cover a lot of ground in the country. There is need for more high-quality hospitals and doctors, in addition to providing people with adequate healthrelated policies. Hence, we see health insurance as one of India's most promising sectors in the nonlife insurance business. Also, the regulatory environment is changing in sync with the growing healthcare needs and evolving demographics to enable insurers to offer better services. More players in the market will help increase awareness. People will start looking at health policies as risk insurance, not just a tax-saving option.
How does the situation in India compare with the global scenario?
Although this sector has seen rapid expansion and the industry has grown at a CAGR of 18-20 per cent in the past few years, penetration is curtailed by low awareness, non-coverage of outpatient care or existing diseases, inefficient cost management and a weak retail distribution model. India has mostly short-term health indemnity products. Some experts say the country needs a $80 billion allocation to attain the world average for health expenditure.
We can take a leaf from the success stories abroad. In the Far East, return-linked insurance products are offered. These help in arresting moral hazard, scale up fast and appeal to the public as the idea of a return makes it a quasiinvestment product. In Europe, the buzzword is care management. In the US, they have cashless and managed care products. In India, the trend leans towards a hybrid system and most products are indemnity-driven. Lack of extensive data in terms of hospitals, medical records of patients, diseases, etc, also limits product innovation.
The fine print in health policies is seen as a mere exercise in hedging. What's your opinion?
Since a health insurance product caters to a vital need, it requires a more detailed explanation compared to other financial products. Hence, we need to employ a personalised approach to help consumers take an informed decision based on their life stages and requirements. This can be done by presenting product information in a simple manner. Also, health policies need to be more comprehensive and transparent, with minimal fine print. Companies need to address issues related to servicing and low product innovation in order to tackle these hurdles successfully.
How do you plan to tackle misselling?
In most cases, health insurance claims are outsourced to third-party administrators (TPAs), making the insurance firms faceless entities. The TPA is often the only point of reference for customers. Therefore, at a critical time, the customer could face difficulty. To avoid this, we keep our customers with us through their entire journey, not just during enrolment and claims process. In addition, we follow a stringent quality assurance process before including any hospital in our network.
Will the proposed portability facility work or is it just another selling tool?
Portable health insurance policies are a relatively new concept in the market. These allow a person to change his health insurer without losing any accrued benefits. This is a positive development that will help the sector to grow. Portability will be more relevant if it is available while switching from a group policy to an individual cover. So, if an employee switches his job, instead of losing all the accrued benefits from his existing health policy, he can continue with the same benefits, making them a part of his individual cover.
How do you intend to differentiate your products from competitors?
We offer a number of innovative benefits. For example, under the maternity benefits in our family floater plan, the newborn (of the insured) will be covered automatically. We will also cover vaccinations as per WHO recommendations. We may, in future, offer primary, secondary and dental cover in addition to homoeopathic treatment.
