Trends that define health insurance industry In India: opportunities and challenges when it comes to insurance penetration and where it stands today.
The pandemic has made everyone aware of life’s uncertainties and the importance of preparing for health emergencies. Public awareness of health insurance has skyrocketed. People have also adapted to the high use of telemedicine and preventive medicine.
There is currently a huge gap in the market that must be addressed with innovative and customized products. Efforts are underway to offer comprehensive health insurance that includes outpatient care as well as preventive and wellness care.
The industry anticipates the emergence of large consumer technology platforms as health insurance distribution channels. With the growing need and value of health insurance, these new channels will help improve the customer experience and enable insurers to design curated and personalized offerings.
Technology and digital media are increasingly being leveraged to create new touch points and opportunities for customer acquisition and customer lifecycle management. Numerous data-driven digital innovations and tools, including machine learning, blockchain, and insurance technology, will help the health insurance industry to ramp up administrative activities and functions such as underwriting, claims processing, and customer inquiry handling, benefiting both customers and health insurance companies.
What are the factors driving health insurance growth?
Despite the prolonged shutdown in the country, the health sector rose sharply by 34.2 percent year-to-date (YTD) in July 2022, compared to 9.9 percent at the beginning of the year to date in July of FY21, as It is proposed by Retirement Care. One of the main drivers of this growth is increased consumer awareness and sensitivity to the existence of a protection scheme.
Although insurance penetration and density have grown in India over the past two decades, they are still well below global standards. With coverage of about 25% of the population, the health insurance market is still in its infancy. There is tremendous scope for expanding health insurance and penetration into a larger number of the population.
30% of the population lacks health insurance and is referred to as the “missing middle”. This section consists mostly of self-employed (agricultural and non-agricultural) workers in the informal sector in rural areas, as well as a variety of urban employment (informal, semi-formal, and formal).
The industry is taking drastic measures to increase insurance penetration and with increased awareness, health insurance is on the rise.
What makes health insurance a priority?
Medical inflation in our country may vary from 10% to 15% depending on the city. While this has always been the case, a growing awareness of the costs associated with medical treatments is important. This has always been the case, but people are becoming more aware of it due to the pandemic. We have also seen a shift from sickness to health insurance due to a fundamental shift in customers’ perception of the sector. The increasing cost of medical treatment has re-emphasized the need for health insurance.
The health insurance sector has grown in strategic importance to both industry and SBI general insurance. This segment, which now commands the largest share of the mix, requires a focused approach, realignment of internal resources, and re-engineering of the health insurance value chain.
We’ve put in health room to make it easier for us to have greater quality control, increased service levels, and data analytics-driven pricing and suggestions to help us better meet customer needs. As part of Health Vertical, we also launched Retail Health Agency Which will focus on creating a distribution force mainly in Tier 2, 3 and 4 cities and will benefit from the USP of SBI’s brand equity. We started this initiative last year and operations are in transition towards achieving the desired benefits. We have also prepared custom in-house claims built on Pune basis and set up a vast hospital with more than 11,000 hospitals across the country to provide maximum cashless facilities and seamless service to our existing and potential clients.
Industry cooperation to expand health insurance penetration
We are open to synergistic collaboration to expand and improve our offering, and we recently partnered with Apollo 247 to provide wellness services to our health insurance clients. Apart from that, we are looking for new internal technology players to improve our offering, as well as internal processes to improve our service levels.