Fear, Not Awareness, Driving Health Insurance Buying Post-Covid: Insights from Mint Healthcare Summit
Exploring the Impact of Covid-19 on Health Insurance and the Challenges Ahead
The insurance industry saw a significant shift during the Covid-19 pandemic as individuals proactively purchased health insurance plans to safeguard themselves against unforeseen hospitalizations. However, Dr. Bhabatosh Mishra from Niva Bupa Health Insurance shared a different perspective during a panel discussion at the Mint Healthcare Summit 2023. According to Dr. Mishra, fear rather than increased awareness was the driving force behind the surge in health insurance purchases during and after the pandemic. Despite these changes, health insurance still remains a push product in India.
The Direct Link between Health Insurance and Healthcare Costs
Dr. Mishra, as the director of product, underwriting & claims at Niva Bupa Health Insurance, addressed the concerns about the significant price hike in many health insurance policies. He explained that the cost of health insurance is directly tied to healthcare expenses. While health insurance faces stringent regulations, healthcare costs can change unexpectedly. It’s not uncommon for hospitals to adjust their prices two or three times a year, further impacting the affordability of health insurance for individuals.
Low Health Insurance Density and Lack of Awareness
Mayank Gupta, the co-founder and COO of Zopper, highlighted the low health insurance density in India compared to other developing markets. Insurance density, which reflects the average spending on health insurance per capita, is significantly lower in India, approximately $70-80. In contrast, other developing countries have insurance densities ranging from $500-600. Gupta emphasized that the lack of awareness, rather than technology, is the primary obstacle in increasing health insurance coverage among the Indian population.
Enhancing Customer Experience and Addressing Claim Rejection Issues
Shilpa Arora, co-founder and COO of Insurance Samadhan, emphasized the need to focus not only on insurance penetration but also on improving the customer experience when it comes to making claims. She pointed out that improper disclosure of medical history often leads to claim rejections. Arora also stressed the importance of adequately training insurance sellers and distributors, as they may lack awareness of the specific clauses in insurance products.
Leveraging Physical and Digital Channels for Future Growth
Rishi Mathur, chief distribution officer and chief strategy officer at Canara HSBC Life Insurance, discussed the channels that should be utilized to drive the next phase of growth in health insurance. He suggested leveraging both physical and digital channels to reach a wider audience and make health insurance more accessible to the masses.
Initiatives to Increase Insurance Penetration in India
According to the annual report for FY22 by the Insurance Regulatory and Development Authority (IRDA), insurance penetration in India currently stands at 4.2% of the premium to GDP ratio. Life insurance accounts for 3.2% of this ratio, while non-life insurance, specifically health insurance, represents only 1%. Moreover, health insurance constitutes less than 1% of the overall non-life insurance segment. To address this disparity, IRDAI has introduced initiatives such as Bima Sugam, Bima Vahak, and Bima Vistar, along with state-level insurance programs, aiming to boost insurance penetration in the country.
In conclusion, the Mint Healthcare Summit shed light on the factors driving health insurance purchases post-Covid. While fear played a significant role during the pandemic, the lack of awareness and relatively low insurance density in India pose challenges for the industry. It is essential to improve customer experience, train insurance sellers, and leverage both physical and digital channels to drive future growth. By implementing initiatives to increase insurance penetration, India can work towards ensuring better health coverage for its population.
Disclaimer:
The material in this article was compiled using the most recent Acts, Rules, Circulars, Notifications, Provisions, Press Releases, and material applicable at the time. The completeness and correctness of the material ensured with due diligence. It is required of users of this material to consult the relevant, applicable legislation. The data given may change without prior notice and does not constitute professional advice. As a result, Estabizz Fintech disclaims all liability for the results of using such material.
