To enhance penetration there should be transition from a pure insurance model to a 'managed care-model' with suitable changes in the regulations.
The outlook for the health insurance industry looks very optimistic for the year 2018. The industry is growing at a rate of 20 percent and motor and health segments are the prime drivers for this growth. For the half year ending September 2017 the industry health premium stood at Rs 17340 crore as against Rs 14500 crore as at September 2016. The health insurance segment has clocked in around Rs 31000 crore premium for FY17.
Increased awareness is one important reason for the momentum. The customer education by both the insurance companies and the regulator has introduced more transparency in the system and has helped in augmenting buyer confidence and therefore resulting in higher premium turnover. Further innovations in product offerings that cater to both the niche and the common segments have also helped extending the reach.
The bancassurance is a promising channel to increase penetration of health insurance as we are only piggy-riding on the ‘financial inclusion’ role of a bank. Increased digitization can help in automating many processes and eliminate human related errors thereby increasing customer engagement.
The e-repository services has so far had very little uptake but going forward this can be expected to change.
Product innovations like introduction of combi products have not gone on the expected lines. But we need to wait and educate the customer on the need for a real 'protection' for himself and his family.
To enhance penetration there should be transition from a pure insurance model to a 'managed care-model' with suitable changes in the regulations. Such a model would help ensure more value to the end user.
With such radical changes in the distribution and delivery setup we can expect the health insurance premium to clock a growth of nearly 35 percent as against the current 20 percent. This would also be another step towards poverty alleviation as a sizeable number of households slip into poverty owing to self financing the healthcare emergencies.The writer is CMD, Star Health and Allied Insurance