Health Insurance tops Non-life General Insurance segment with 27% share

Health insurance sector in India collected premiums worth INR 516 billion in FY20, accounting for 27% of the total general insurance (non-life) premium collected in India in FY20, which stood at INR 1,893 billion, according to a FICCI-PwC Report ‘Revamping India’s Health Insurance Sector.’ 

The Report pointed out that health insurance is second only to the automobile insurance segment in terms of premium contribution to the insurance sector in India. Approximately 10% of India’s population is estimated to be covered under private health insurance (excluding government-sponsored health insurance schemes).

To improve the interaction process, the Report recommends to develop a trusted blockchain network that would improve execution of processes through multiple nodes in a decentralised manner with auditability, traceability, and immutability. Blockchain and smart contracts could be the ideal way to maintain records and execute transactions through participation of all stakeholders in an accountable way, it said. 

Blockchain adoption may go a long way in ensuring trust, improving customer experience, and thus aiding in the further growth of health insurance penetration. Data quality, data standards, protocols and reliability are crucial at the beginning of a blockchain cycle and need to continuously improve for it to be successful. “The National Digital Health Mission (NDHM) has been announced and digitised health records will play an instrumental role towards automation of health insurance, especially in adjudication of claims,” the Report observed. 

Releasing the Report TL Alamelu, Member, Non-Life, Insurance Regulatory and Development Authority of India (IRDAI) stressed upon the need for increasing the health insurance market in the country. She urged the health insurance companies to focus on launching disease specific policies to increase the customer base.

 “This is what the customer is looking for. Health insurance companies should focus on developing disease specific policies to cover a larger population rather than focusing only on healthy individuals,” she added.

Emphasizing the need for more awareness in the health insurance sector, she said, “It is better to have minimal health insurance with all the exclusions, than a situation of no health insurance.”

 Alamelu also emphasized the need for a better grievance redressal system to gain customers trust. “During this time, the number of grievances related to COVID polices are very less and resolutions are also positive by the companies. Health insurance companies should extend this mechanism to all other types of health insurance policies as well. This is the only way, trust can be built among the public,” she added.

To promote the use of Artificial Intelligence in the sector, Alamelu said, “We are planning to come out with a regulatory sandbox for fintechs and insurance companies for bringing innovation through the use of blockchain, AI which can be further broad based with suggestions.” Highlighting the impact of COVID-19 spreading to tier 2,3 cities and rural areas,  Alamelu said that there is an increase in the health protection gap in the health insurance sector. “96 percent of the population don’t have a health cover. During this time also a small out of pocket expense in hospitals can financially impact the customer. There is a need to reduce this gap,” she said.

Prasun Sikdar, MD & CEO, Manipal Cigna Health Insurance discussed the shifting paradigms of business, including changes in customer behaviour and mindset in the midst of COVID- 19 outbreak. He mentioned that today health insurance is no longer a 'priority' but a 'necessity' for people. He talked about making health insurance affordable, predictable and simple in order to bridge the gap between customer expectations and experience.

Mayank Bathwal, CEO Aditya Birla Health Insurance said that OPD expenses, contributing to more than 60% of healthcare spend and important for driving preventive care are still largely not covered under the insurance policies. With the advent of digital health and significant government and regulatory interventions like the NDHB & guidelines for tele-medicine, epharmacy etc. this is the right opportunity to enhance the scope of health insurance benefits to cover OPD expenses.

Ritesh Kumar, MD & CEO, HDFC Ergo General Insurance said that the industry has risen to the occasion to alleviate the pain of its policyholder  impacted by COVID-19 to ensure coverage and faster turnaround time for claims approval, especially cashless.

Alamelu and other health insurance leaders expressed their views at a webinar ‘Virtual Health Insurance Conference 2020-Innovation for Bridging the Gap’, organized by FICCI.