Insurance. Health insurance sector to continue growing in 2022

The health insurance industry in India has undergone a sea-change over the last two years. One major change has been the perception of the category amongst customers, and the need to have a health insurance policy. The pandemic has made everyone realise the uncertainties of life and their unpreparedness in case of any health-related emergency.

Since the commencement of Covid, health insurance premiums have been the main driver of the non-life insurance industry. In spite of a long nationwide lockdown, the health segment grew significantly by 34.2 per cent in YTD (year-to-date) July 2022 in comparison to a growth of 9.9 per cent witnessed in YTD July FY21.

While we have seen a rapid growth of the overall health insurance sector, some key changes/trends to look out for the next year are:

Consistent growth momentum

The growth engine/trajectory will continue as the health insurance category has gained the attention of the consumers. With a major shift in consumer perception of the industry, the focus has gradually moved from sickness insurance to health insurance.

The underlying cause of this change has been the rising cost of hospitalisation that has made people understand the need of buying health insurance.

Consumers have also realised that buying a comprehensive cover is a better choice since it extends a holistic healthcare approach with wider coverage against diseases, pre-existing conditions or even future lifestyle conditions.

Thus, many consumers have started viewing health insurance as an essential investment that brings in a wholesome health cover.

New and innovative offerings

There is a growing opportunity for the industry to come up with new and innovative product offerings that fulfil the unmet needs of the customer. A large part of the customer segments still doesn’t have specialised health policies for them.

There is a big gap in the market currently that is waiting to be filled with innovative and customised products. For eg., offerings for people with certain conditions from Day 1, offerings to cover outpatient expense coverage, look at certain segments of customers whose needs have not been fully met yet, etc.

Common Health Claims platform

Swasth alliance, a collaborative, was launched last year by Swasth Digital Health Foundation (a not-for-profit initiative) to leverage digital technologies that will drive healthcare inclusion and improve health outcomes. This will enable in creating a digital backbone for an integrated healthcare delivery in India.

The Health Claims Exchange specifications recommended by Swasth for cashless insurance will aid in improved patients’ claim related experience, faster claims processing, better visibility and tracking of claims, newer innovative insurance products, reduction in claims processing cost and better quality data for the industry and regulators. This will also make the communication between all stakeholders seamless and bring in standardisation to the whole process. It will thus bring a paradigm shift in the way claims are settled in the industry.

Coverage for missing middle

As per the recent Niti Aayog report, while the Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) and State government extension schemes provide comprehensive hospitalization cover to the bottom 50% of the population – around 70 crore individuals, another 20 per cent i.e. 25 crore individuals are covered through social health insurance and private voluntary health insurance. The remaining 30 per cent of the population is devoid of health insurance and is termed as the missing middle. This segment predominantly constitutes the self-employed (agriculture and non-agriculture) informal sector in rural areas, and a broad array of occupations – informal, semi-formal, and formal – in urban areas.

The existing infrastructure of Ayushman Bharat can be utilised to extend cover to the missing middle population.

New distribution channels

We will see the emergence of large consumer tech platforms as distribution channels for health insurance. With the rising need and value of health insurance, such newer channels will definitely aid in a much refined customer experience along with enabling to create a curated offering with personalisation. This will also help in creating a model that is both transparent and personalised. It will be data driven and digital that will thereby make the process of buying and reviewing insurance easy. The pandemic has also brought a big shift in the consumption behaviour of customers. Such newer channels will help broaden the reach of the industry, especially the millennials and the younger population.

Technology and digitisation

There will be a growing use of technology and digital mediums to create new opportunities, not just to acquire customers, but also in helping customer lifecycle management. If health insurers have transitioned to remote sales and service teams, customers too have become quite adept in availing digital services in every step of the typical health insurance process. Customers have now started extensively using their health insurers’ apps and website for accessing information and processing requests. We expect this rise in use of digital services to be a permanent fixture in the domestic insurance industry.

We will also see several data-driven innovations and digital tools, machine learning, blockchains, and insurtech that will help the health insurance sector in speeding up administrative tasks such as underwriting, processing of claims and managing customer queries benefitting both customers and health insurers equally.

There will also be an increased convergence in administrative tasks such as underwriting, processing of claims and managing customer queries.

Mayank Bathwal

(The writer is CEO, Aditya Birla Health Insurance)