The Insurance Regulatory and Development Authority of India (IRDAI) will recommend to the government that necessary statutory changes should be brought so as to allow health insurance providers to offer value-added services to customers, its Chairman Debasish Panda said on Tuesday.

Nudging the health insurance providers to overhaul their products, pricing and distribution strategies so as to be more consumer-centric, Panda also wanted the industry to prepare a roadmap that will help reinforce policyholders’ trust. The roadmap should focus on the three mantras of “awareness, accessibility and affordability”, he said.

High pricing

Noting that the pricing of health insurance products is “probably very high”, Panda said it is leaving health insurance to be “unaffordable” for many sections of society. Panda, however, did acknowledge that the high pricing could be due to high operational expenses, high distribution costs and also expenses of hospitals. He was speaking at the CII’s 16th Health Insurance Summit.

“We need to work on how we optimise costs — hospital care, distribution costs or operating expenses of a company. With technology and data around, how do we optimise the cost and come up with solutions? Can we also look at more comprehensive health insurance solutions — end-to-end coverage for all categories of targeted insurance population?” he noted.

Panda wanted the industry to work closely with healthcare providers to design products that would cover exclusions and pre-existing illness. “Just because somebody has diabetes doesn’t mean you should deprive him completely from an insurance cover. Doesn’t mean that a diabetic patient is going to have a heart attack or stroke everyday. People are ready to pay a little higher premium for such covers. We should think of providing more cover for them,” he said.

Value added services

Panda said the industry has been asking for approval to offer value added products and that IRDAI is open to the value added services. “We are making recommendations to the government to bring in necessary changes in statute and allow value added services. If customers can get value added services for a small fee, so be it. We need to have a platform where we can manage entire healthcare — including yoga training, gym membership, etc.,” he said.

Go for growth

Panda said India’s health insurance market — which grew at a CAGR of 19 per cent in the last five years — needs to grow at 35-40 per cent CAGR if the country has to enhance health insurance density. In terms of premium, it has grown from ₹20,000 crore per annum in 2014-15 to ₹73,000 crore in 2021-22.

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