Health insurance has been at the centre of many conversations. Buzz on the insurance Bill, universal health cover, new players and new products have all helped raise awareness on health insurance in India. In terms of the gross written premium, the industry has crossed R20,000-crore mark in 2014 and is expected to grow impressively in the coming years.
The year 2015 promises to be an exciting year for health insurance and we see the growth continuing at a CAGR of 20%. The market dynamics may not change much, but the potentials of each player are expected to grow as the government has placed greater emphasis on covering every citizen with some form of health insurance cover. With the government’s focus on making health insurance more accessible and affordable, India’s challenge of lower health insurance penetration may get addressed.
The promulgation of the Insurance Laws (Amendment) Bill, 2014, and the approval to increase FDI limit to 49% will bring foreign investment in the sector and raise the capital-raising options. Infusion of foreign capital and international expertise are likely to result in accelerating overall development of the insurance industry as companies will be able to access international insurance products, best practises and innovative distribution methods.
The health insurance segment is expected to have new entrants and build a space of enhanced competition among the players. This, I believe, may prove good for the people. Going forward, service is likely to play a key role in the sector. Therefore, the new entrants must strengthen the position and the service-delivery benchmarks.
Healthcare spending has reached approximately R4,00,000 crore, of which approximately 70% has been paid from the people’s pockets. Health insurance, as an industry, is poised to see many takers to counter the rising healthcare costs and cut the burden of out-of-pocket expenditure in the days to come.
Even consumers have evolved and are more informed now. They don’t want generic products and one size no more fits all. There is an increased interest in benefits that are specially designed and customised to specific needs in addition to the basic covers. We see customers leading the industry towards enhanced focus on specialised and specific products and services. Also, due to the growing incidence of lifestyle-related diseases, people are keen on purchasing health insurance policies that cover ailments such as diabetes, kidney ailments, heart attacks and cancer. Innovation would act as a catalyst in the health insurance segment.
We are hopeful that in 2015, policyholders will take onus of understanding and adopting health insurance policies, based on individual needs. Exclusions, inclusions and waiting periods will be more lucid to those who wish to purchase health insurance policies. To sum it up, we are moving in the right direction as far as health insurance segment is concerned.
The writer is CEO, Apollo Munich Health Insurance