The health insurance industry has witnessed consistent growth since its launch in 1986, more so after the liberalisation of the insurance sector in 2000. The growth has been especially magnificent in the last five years, following the advent of standalone health insurers and various government-sponsored health insurance schemes. In 2013, the health insurance industry got a great fillip, with several noteworthy events making the news headlines.
More awareness & relevance
Most people are yet to accept insurance as a tool for financing healthcare expenses. They usually procrastinate when it comes to buying health insurance unless faced with a challenging situation. To counter this, GIC and the Insurance Regulatory and Development Authority (Irda) launched a comprehensive marketing media campaign aimed at boosting awareness across different segments of the population. This effort, we believe, will aid the growth of awareness in the long run, and help health insurance evolve as an important financial tool.
A step to boost penetration
Thanks to high medical inflation, paying for healthcare expenses out of personal funds is no longer viable for the common Indian. Unfortunately, only about 30% of Indian population has some kind of financial tool to cover its medical expenses either partially or wholly. The industry has been unable to expand its reach, especially in Tier 2 and Tier 3 cities, with lack of effective distribution channels a cause of concern.
To improve health insurance penetration, I believe, the regulator has taken a step in the right direction by allowing standalone health insurers to distribute their products to bank customers. This will ensure wider reach for health insurance products, and it can happen at a very brisk pace.
For mono-line companies like us, it is not feasible to set up branches in locations with limited potential as it takes at least 5-7 years to break even. By partnering banks for distribution, we will get a shot in the arm as far as widening reach is concerned.
Although the need for adoption of health insurance is obvious , people are hesitant to purchase medical covers due to the confusion they harbour. There are many products available in the market nowadays that vary in terms of the benefits offered, exclusions, waiting periods and inclusions.
In order to bring in better clarity among customers and create a level-playing field, Irda has created ‘Health Insurance Standardisation Guidelines’, which all health insurance providers must follow.
The guidelines have standardised the 46 most commonly used definitions/terms/conditions in health insurance policies. They also include definitions of 11 common critical illnesses covered under various health insurance policies in India. All this is done to ensure there is no ambiguity among products and so that customers can make informed decisions while choosing a policy. The creation of the standardised guidelines is a step in the right direction and it will bring in a number of spinoff benefits.
One size no more fits all, and to keep pace with changing consumer behavior and demographics, the industry has started moving from the basic indemnity format to coverage of specific ailments, laden with benefits and features. This year, disease-management products have made an appearance in the market, and these policies are aimed at specific diseases. With preventive care being used worldwide as a means to reduce the effect of lifestyle-related ailments, it’s time India moved towards disease-specific health insurance programmes.
A lot of effort has been made this year and the stakeholders in the segment — insurance companies, healthcare providers, TPAs and the regulatory body — must work as a cohesive unit to ensure long-term growth. Insurance companies must be able to bring all these parties together to ensure that the customer benefits the most and is able to handle medical emergencies without any hassle.
The writer is chief executive officer, Apollo Munich Health Insurance