The Indian health insurance sector has registered phenomenal growth in the past few years. Experts are of the opinion that in the coming few years the health insurance sector is poised to reach new heights as public and private insurers are coming up with various schemes to cover the untapped insurance market. However, lack of penetration still remains a huge detriment. Raelene Kambli catches up with Ravinder M, National Head – Rural, Accident & Health, Tata AIG General Insurance Co to understand the current market scenario for the health insurance sector in India
How would you broadly characterise the health insurance industry in the last five years? Are there a lot of changes within the sector?
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| Ravinder M |
The health insurance industry constitutes about 24 per cent of general insurance market and has the fastest growing portfolio with a CAGR in excess of 30 per cent in the last six years. This portfolio is expected to report a CAGR in excess of 25-30 per cent over the next five years.
Where the changes are concerned, I would say that the industry is currently experiencing changes in terms of product innovation and next level customer servicing standards.
What kind of operating models are viable in India for health insurance?
There is more focus and demand for indemnity based products. The demand for benefit products, critical illness products are also increasing.
The companies offering health insurance products are constantly trying to introduce better designed products, more appropriate pricing, additional innovative underwriting techniques as well as more stringent risk and claims management initiatives. All the above is taking place while driving forward on service standards to meet the increasing demands of consumers.
Lack of insurance penetration remains the biggest challenge that the industry faces. How are insurance companies tackling this industry situation?
Many companies offering health insurance policies are choosing to advertise for creating awareness about good health and the importance of buying health insurance.
Also, contacting customers through different channels of distribution is being initiated to ensure that all sections of society and geographies are contacted. Different channels of distribution include bancassurance, direct marketing and online.
What are the government’s initiatives in this regard?
Government has taken many initiatives to increase the health insurance penetration levels in India. It has launched the Central Govt Health Scheme, Rashtriya Swasth Bima Yojana (RSBY), Rajiv Gandhi Arogyasri, etc.
RSBY has been launched by Ministry of Labour & Employment in 2008 for below poverty line (BPL) families. It entitles to hospitalisation coverage up to Rs 30,000. There is no age limit and covers up to five members in the family.
Premium funding pattern includes Government of India’s contribution of approximately 75 per cent, State Government’s contribution of 25 per cent and the beneficiary’s contribution of Rs 30 as registration fee. Selection of the insurer is done by the State Government on the basis of competitive bidding.
The RSBY has been one of the most successful schemes, having a reach in 26 states, covering 378 districts. RSBY cards have been issued to 27.6 million BPL families, covering 7.5 crore lives. Almost 3.2 million claims have been registered.
What else needs to be done to address the lack of penetration problem?
Reaching out to the smaller towns and districts where the real India belongs is important and critical. Platforms such as medical camps, vaccination camps and Panchayat can be used to create awareness about maintaining good health and importance of buying health insurance.
The industry looks forward to the government launching more health insurance schemes and health insurance companies launching more health insurance products catering to all segments of the society. This may help in improving the penetration levels.
How do you see the market shaping up in the coming years?
Customers in India are used to being offered a single type of health insurance product as the market is in a relatively infant stage of evolution. With time we expect the market to mature and the insurance companies to come out with new age products which will cater to the increasing and diverse needs of the customers
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