<div><strong>Somesh Chandra</strong><br><br>The success of any idea or business is determined by how well it resonates with consumers. While the initial stages necessitate a considerable push from the business until the idea finally hooks consumers, ultimately it needs to evoke substantial interest to drive adoption. Typically this journey is marked by three to four stages – seeding of the idea, building interest/recall and ultimate adoption followed by consumer loyalty. </div><div>In short, the critical shift replacing the initial push from business to the ultimate pull from the consumer is what will determine success. The growth rate of any sector/industry is largely dependent on how rapid is the switch from push to pull. The more rapid the switch, the higher the rate of growth.<br> </div><div>Speaking of the health insurance industry in particular, for the longest time, it has been predominantly a push category with health insurance players adopting different channels and strategies to drive health insurance adoption among consumers. It is only recently that there has been a gradual shift. The increasing demand for health insurance from consumers is steadily changing the industry dynamics.<br> </div><div><strong>Reason Why Health Insurance Remained A Push Category For Long</strong></div><div><table align="right" border="1" cellpadding="2" cellspacing="2" style="width: 200px"><tbody><tr><td><img alt="" src="http://bw-image.s3.amazonaws.com/Somesh-Chandra-200.jpg" style="width: 200px; height: 208px; margin: 1px; float: right;"></td></tr><tr><td><strong>Somesh Chandra</strong></td></tr></tbody></table>One of the major reasons is clearly the lack of awareness of benefits of health insurance in the long term. Category understanding remained low with a significant section of the country plagued with misconceptions such as health insurance only being relevant for the elderly or being too complicated with several hidden clauses. Some of the common myths that came out from a recent study, Max Bupa Health Insurance Pulse 2015 are listed below<br> </div><div>1.<span class="Apple-tab-span" style="white-space:pre"> </span><strong>The need for health insurance </strong></div><div>50 per cent of the respondents thought that health insurance is for the old and 48 per cent thought that they don’t need health insurance since they are healthy. This impression of consumers could be due to the fact that Indians might be overly optimistic about their health as the report found 58 per cent not worried about their health in the near future and 72 per cent saying that they are in very good health. People also seemed to be quite bullish about their ability to foot old age retirement health costs, with 59 per cent saying that they have enough savings for that purpose.</div><div> </div><div>2.<span class="Apple-tab-span" style="white-space:pre"> </span><strong>Comparison with life and accident covers</strong></div><div>71 per cent felt that since they get health benefits from their life cover they don’t need a separate health insurance plan. Clearly, the absence of consumer awareness prevented more consumers from reaching out for comprehensive health insurance coverage.</div><div> </div><div>3.<span class="Apple-tab-span" style="white-space:pre"> </span><strong>The utility of health covers </strong></div><div>Of the total number of respondents, 71 per cent were unsure of the benefits derived from health insurance while 62 per cent thought that there is no benefit by renewing. Also, 64 per cent weren’t aware of day care and OPD coverage, with only 20 per cent being aware of maternity coverage, even as 66 per cent were unaware of relationships such as brothers- and sisters-in-law being covered under the same policy. Further, 65 per cent also didn’t see differentiation among health insurance offerings. The last two responses can primarily be attributed to the absence of adequate awareness about the enhanced features and protection offered by health insurance products.</div><div> </div><div>4.<strong><span class="Apple-tab-span" style="white-space:pre"> </span>Importance of staying insured</strong></div><div>Only 50 per cent of the respondents claim to have renewed their policies. The low awareness about benefits like no claim bonus and loyalty programmes at renewal was likely to be a major cause for this. </div><div> </div><div>5.<span class="Apple-tab-span" style="white-space:pre"> </span><strong>Premiums affordability as a purchase barrier</strong></div><div>Despite increasing awareness about health insurance, affordability of premiums was still the top purchase barrier for 20 per cent intending to purchase, followed by 13 percent citing the absence of return. <br> </div><div><strong>The Shift</strong></div><div>In spite of mere 7 per cent penetration among the Indian population, there is evidence that Indian consumers are evolving on many fronts. As is evident from the study, health insurance consumers are evolving from being price conscious to being value conscious. Most of the owners still feel inadequately protected with growing awareness about increasing cost of hospitalization and incidence of illnesses across age groups being on the rise. People are beginning to see health insurance as a health protection tool rather than just a savings or investment option. <br> </div><div>1.<span class="Apple-tab-span" style="white-space:pre"> </span><strong>Growing awareness </strong></div><div>A significant 70 per cent of the respondents thought that health insurance is more important than life insurance. A majority of the people (57 per cent) felt that health insurance plans provided by their employers were inadequate and 94 per cent said that health insurance will take care of their healthcare expenses. </div><div> </div><div>2.<span class="Apple-tab-span" style="white-space:pre"> </span><strong>Growing sum insured </strong></div><div>Along with increasing awareness, the health insurance coverage is increasing with respondents surveyed owning large covers. The average sum insured of respondents is Rs 6.5 lakh for which they are paying an annual premium of Rs 12,000. This is more than the Rs 2-3 lakh coverage range not so many years ago. Rising healthcare costs and access to more modern and expensive healtcareh facilities seem to be the possible reasons for this shift.</div><div> </div><div>3.<span class="Apple-tab-span" style="white-space:pre"> </span><strong>Shift to family covers</strong> </div><div>There seems to be an unmistakable shift from individual to family health covers. Of the total, 60 per cent respondents indicated that they are seeking coverage for the whole family.</div><div> </div><div>4.<span class="Apple-tab-span" style="white-space:pre"> </span><strong>Growing preference for value over price focus </strong></div><div>Unlike in the past, consumers now seem to be looking for much more than just affordable premiums. As many as 69 per cent said that they expect health insurance to pay for all healthcare needs, while 47 per cent sought multiple benefits such as OPD and maternity, even as 43 per cent were looking for personalized services. Only 31 percent are looking at just affordable premiums when looking at health insurance options.</div><div> </div><div>5.<span class="Apple-tab-span" style="white-space:pre"> </span><strong>More early-life purchases </strong></div><div>The average age of the health insurance consumer is getting lower, with the study finding the average age to be 32 years showing that younger people are willing to get into the category fold.<br> </div><div>Fortunately for India, developments in the last 24 months have actually taken health insurance nearer to the consumers. In the recent Union Budget 2015, tax deductions for health insurance premiums under Section 80D have been raised from Rs 15,000 to Rs 25,000 for individuals and from Rs 20,000 to Rs 30,000 for senior citizens.<br> </div><div>Equally significant development is the parliamentary approval of the Insurance Bill which, besides allowing enhanced foreign direct investment limit of 49 per cent from 26 per cent, also recognizes health insurance as a distinct entity.<br> </div><div>These developments, along with steps taken by the regulator, Insurance Regulatory and Development Authority of India (IRDAI), such as standardization of 46 most commonly used definitions, any age enrollment and lifelong renewal eased those approaching their senior years from their worries of being devoid of a health insurance cover when it is most required.<br> </div><div>With the overall health insurance ecosystem moving in favour of consumers, along with the gradual shift in consumer understanding of the importance of health insurance, we should see the industry growing at a faster pace and more Indians adopting health insurance.</div><div>Enhanced awareness about health plans and their features, along with tangible renewal and other benefits like loyalty rewards and health checks offered in policies by health insurance companies can go a long way in clearing the clouds of myths and misconceptions in the minds of consumers. Once this is accomplished, health insurance as a category will truly transition from a push to pull industry.</div><div> </div><div><div> </div><div><em>The author, Somesh Chandra, is COO & CQO at Max Bupa</em></div></div>
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