‘Regulatory Sentiments Are In The Best Interest Of The Customer’
Is India finally waking up to the need of health insurance?
Absolutely. For the last 5-7 years, the health insurance industry in the country is growing at a 20 per cent CAGR. This goes on to show that more and more people are now buying health insurance products. What is encouraging is the fact that the mindset of people — young an old — is changing.
The question is no longer whether to buy a health insurance product but for how much. That is critical especially since nearly 62 per cent of the treatment expenses in India are out of pocket. You compare it with any other country. It is much lower. Take South Africa, for example. The out-of-pocket expense stands at 7 per cent.
How do you plan to tap the untapped market?
We see a paradigm shift. Awareness level in the country has changed significantly. There is an increased participation from the tier-2/3 towns, where people have been typically not open to insurance products.
Most importantly, for the first time, the nation has recognised the need for good health and health insurance. Though it is too early to comment on the National Health Policy announced by Finance Minister Arun Jaitley in Budget 2018, we are confident that this will increase penetration especially in the smaller towns.
What are the challenges?
We need to develop the health insurance segment further in the country. Though the industry has shown a very healthy growth, it is not enough and we need to focus on increasing penetration. The other important aspect is to introduce zone based pricing. Why should customers living in smaller towns pay the same premium as those living in the metros where medical costs are much higher? We, at Max Bupa, have introduced this concept of zone-based pricing. I am sure more and more companies will get into this kind of pricing mechanism.
You have launched a new product which focuses on wellness. How does this work, a shift from illness to wellness?
We want to focus on wellness by making health a daily affair. Our latest product GoActive is a holistic health insurance plan, which can be used on a daily basis and goes beyond hospitalisation. It is a 360-degree coverage for our customers’ daily health needs, including in-patient hospitalisation and on-the-go access to OPDs, diagnostics, personalised health coaching, second medical opinion, behavioural counselling and much more. The role of the regulator Insurance Regulatory and Development Authority (IRDA) in promoting wellness has been remarkable.
There is a trust deficit between customers and hospitals and also between insurers and hospitals. How will this be addressed?
Well, our customers have the flexibility to choose a hospital or doctor of their own choice. We have a tie-up with thousands of hospitals.
Will Modicare change the dynamics of health insurance in India?
I think it will. This is critical. But we are awaiting the final guidelines on the National Health Policy.
Why is there low awareness about insurance in India?
Health insurance penetration and quality of awareness continues to be low, with the majority population using self-funding for medical treatment. The widespread mistrust about the health insurance industry is also a key barrier to the growth of the sector. The insurance category in general is “sold” and not “purchased” and this holds true for health insurance as well. Due to the complexity of the product sold, there is no clarity and transparency for the consumer on what he is entitled for, till the moment of truth — which is the claims process, which is generally poorly managed.
There is an evidence of dissatisfaction among consumers with current health insurance processes, service levels and policy terms at point of claim. While 6-10 per cent of health insurers actually claim insurance, poor experience at point-of-claim leads to adverse word-of-mouth for health insurance, adding to the poor value proposition, in addition to it being a dead investment in a no-claims year.
What are the new customer trends that you are seeing?
The conversation on health insurance is gradually shifting from ‘Why do I need health insurance?’ to ‘What kind of health insurance do I need and how much sum insured do I need?’ This is an exciting time to be in the health insurance industry as the overall regulatory sentiments are in the best interests of the customers and insurers. Growing health and wellness awareness among consumers is the key driver for uptake of health insurance in India.
What are the recent technological trends witnessed in the health insurance industry?
The global insurance industry is undergoing a tectonic shift owing to a technological revolution, making all providers rethink the ways of working. Big data and digital are common megatrends that are causing disruption and driving transformations across all industries.
Technology is poised to transform the entire insurance value chain, benefiting both customer and the insurer. Technology has brought in transparency, freedom of choice and increased sense of empowerment for the consumers.
