The year 2016 saw a growing Indian consumer base that recognizes the value of health insurance to help stave off medical inflation and cover health care expenses for oneself and the family members. This was evident through the 35% rise in gross written premium (GWP) between April and November 2016, as compared to a year ago. A growing GWP in health insurance premium is aiding the growth of this segment but India still has a long way to go to ensure health coverage for every citizen.
One of the key developments in 2016 was that the insurance regulator introduced regulations for issuance of electronic policies and submission of electronic proposal forms of insurance policies. From technology adoption to enhancement of customer experience and to product innovation with an emphasis on wellness services, health insurers have been working towards more comprehensive offerings. Standardization and simplification endeavours by the regulator, innovations by insurers and in the light of the recent changes in the economy, 2017 promises to bring in an upward thrust to the industry.
Expectations from the regulator
The launch of a universal health insurance scheme is expected to take place in 2017 and result in a major boost in the penetration levels. Insurers are eagerly awaiting the execution of such a scheme.
Cyber security, data management, and an e-repository to distribute e-policies in order to go paperless, are some concerns that the insurance regulator has raised in recent times. I expect to see more regulations from the Insurance Regulatory and Development Authority of India (Irdai), to secure stricter data confidentiality. At the same time, I also foresee a faster adoption of digital practices as a result of demonetization. The potential changes in income tax norms could augment consolidation and growth of the sector.
Technology-led disruptive ideas are essential in changing the face of businesses and can make a huge difference to health insurance companies as well.
A shared economy will lead the future, where the integration of computer programs—to simulate conversations with human users, engagements with service providers for an ambulance and first-aid models—will be put to use by the sector. Such changes will provide consumers with more value and become avenues for future success.
Investing in high-end technology will not only enhance customer experience but also be an enabler to achieve scale.
There is going to be an array of smart technology-based (primarily mobile driven) and device-based solutions for distribution and service of products, aligned with the ‘Digital India’ movement. Health insurers are embracing new technologies, and the dynamics of the industry have already started to evolve with the development of mobile and web-based applications to engage with customers. Insurers are coming up with apps that not only empower customers to manage their policies by themselves but also help them stay fit. It is expected that the trend will continue this year as well.
Insurers have also moved ahead to create digital offices, where salespersons could sell health insurance policies over mobile networks and complete the processes within minutes and hours, instead of the numerous days that it used to take earlier. The internet is also being used heavily by insurers to reach out to the tech-savvy consumers seeking comparative information and completion of insurance purchase transactions online, without the need of intermediaries, like before.
One size does not fit all
Insurers are working towards developing more innovative products that cater to the primary and tertiary health care financing needs of people. More customized policies, disease-specific products, micro-insurance products and life-stage products are on the anvil for this year.
What defined 2016 was the emergence of wellness services as an integral part of the health insurance bouquet of products, as well as specialized policies for specific ailments that can provide focused coverage. As people get more health conscious, insurance companies will devise more innovative ways to engage with customers and help them achieve their fitness goals.
Cashless is the way to go
The government’s demonetization drive is expected to yield increasing investments in insurance products in the coming year. People who have not bought health insurance so far, will be interested in investing in this to avail quality healthcare without going through the trouble of low liquidity in the market. I also expect to see an increase in the number of policyholders using cashless services rather than claiming reimbursement, due to the low liquidity of cash in the market.
This potential rise in cashless treatments would also aid insurers to work with health care providers to develop and offer sound and affordable pricing treatment protocols at quality healthcare sites.
With more people opening bank accounts to deposit their incomes, this could prove to be beneficial for the bancassurance channel, as banks would be better placed to offer combined insurance products for customers as a means to plan a safe financial future, as well as to save tax under section 80D of the income tax Act.
Antony Jacob is chief executive officer, Apollo Munich Health Insurance.