Shahid Akhter, editor, ETHealthworld, spoke to Shreeraj DeshpandeHead – Health Businesses, SBI General Insurance, to find out about the emerging trends in health insurance.
Trends defining health insurance industry in India: Opportunities and challenges when it comes to insurance penetration and where does it stand today.
The pandemic has made everyone realize the uncertainties of life and the significance of preparedness in the face of health-related emergencies. General awareness on health insurance saw a considerable rise. People also adapted to higher use of telemedicine and preventive medicine.
There is currently a large gap in the market that needs to be addressed with innovative and customized products. There are efforts underway to bring in comprehensive health insurance that includes outpatient care as well as preventive care and wellness.
The industry anticipates that large consumer technology platforms will emerge as health insurance distribution channels. With the increasing need for and value of health insurance, such newer channels will help refine the customer experience enabling insurers to design curated and personalized offerings.
Technology and digital mediums are increasingly being leveraged to create new touch points and opportunities for client acquisition and customer lifecycle management. Several data-driven innovations and digital tools including machine learning, blockchains, and insurtech will also help the health insurance sector ramp up administrative activities & functions such as underwriting, claim processing, and customer query handling, benefiting both customers and health insurers.
What are the factors driving growth of health insurance?
Despite a prolonged lockdown in the country, the health sector rose sharply by 34.2 percent in YTD (year-to-date) July 2022, compared to 9.9 percent in YTD July FY21, as suggested by Care retings. One of the key drivers of this growth is an increase in consumer awareness and sensitivity to having a protection plan.
Although insurance penetration and density in India have grown over the past two decades, they still fall well short of worldwide benchmarks. With around 25% of the population covered, the health insurance market is still in its infancy. There is enormous room for health insurance expansion and penetration to a larger population.
30% of the population lacks health insurance and is referred to as the “missing middle.” This section mostly consists of the self-employed (agricultural and non-agriculture) informal sector in rural areas, as well as a diverse range of employment in urban areas (informal, semi-formal, and formal).
The industry is undertaking rigorous measures to increase insurance penetration and with the increase awareness, health insurance is witnessing a rise.
What makes health insurance a priority?
Medical inflation in our country may vary 10% to 15% depending on the city. While this has always been the case, the heightened awareness of the costs associated with medical treatment matters. This has always been the case, but people have grown more aware of it because of the pandemic. We have also seen a shift from illness insurance to health insurance due to the fundamental shift in customer perception of the sector. The rising cost of medical treatment has reaffirmed the need for health insurance.
The health insurance segment has grown in strategic importance for both the industry and SBI General Insurance. This segment, which now commands the largest share of the mix, necessitates a focused approach, re-alignment of internal resources, and re-engineering of the health insurance value chain.
We have carved out vertical health to facilitate us in having greater quality control, increased service levels and data analytics driven pricing and proposition to help us in addressing customer’s needs better. As part of the Health Vertical, we have also launched Retail Health Agency which will focus on creating distribution force majorly in Tier 2, 3 & 4 cities and will leverage USP of SBI’s brand equity. We started this initiative last year and the operations are in transition phase towards realizing the intended benefits. We also have setup a dedicated inhouse claims set up based out of Pune and created a wide Hospital of over 11,000 hospitals across the country to provide maximum cashless facility and seamless service to our existing and prospective customers
Industry collaborations for broadening health insurance penetration
We are open to synergistic collaborations to expand and improve our offering, and we recently partnered with Apollo 247 to provide wellness services to our Health Insurance customers. Apart from that, we are looking at new insurtech players to improve our offering, as well as internal processes to improve our service levels.