Healthy, Wealthy and Wisely Insured – Chawm Ganguly

chawm g (25)aThe concept of health insurance in its modern avatar dates back to 1694. In India too, health insurance products have been available in one garb or the other for as long as one can remember. However, it was the policy of Economic Liberalisation in 1991, followed in quick succession by the passing of the Insurance Regulatory and Development Authority (IRDA) bill and the proliferation of private insurance companies that led to a quantum jump in the segment. Exponential growth, plethora of policies vying to curve out distinct niches for themselves, increasing (and often self defeating) competition, emergence of a healthcare sector in tune with insurance and a growing middle class armed with policies seeking premium healthcare were the highlights of the era. It was the time when India was quite literally, introduced to Health Insurance in the real sense of the term, ignored as the segment was by the Nationalised Insurance companies of yore.

However, there is no room for complacency as the Health Insurance sector in India still has long, long way to go, even if it were to reach the penetration levels of similarly developed economies, if not compete with those of the developed ones. To tap this latent potential, experts point out, the segment has to develop an effective and efficient distribution channel as insurance is primarily a matter of solicitation – not an easy task considering the record of the Nationalised Insurance companies and the trends witnessed in the two and a half decades since economic liberalization. The abject lack of trained and skilled manpower, which is already crippling the industry will continue to haunt it in the near and the medium term as the resource cannot be bought off the shelf and the infrastructure to create the manpower to meet the growing needs of the industry is just not there.

Again success in a sector like Health Insurance, especially in a huge country like India will depend to a very great extent, on the ability to address the needs of a colossal population with the infrastructure to boot. Naturally, advanced analytics will play a key role in the success or otherwise and the entities that bridge this digital divide the fastest will naturally have an edge.

Global integration, the setting up of new benchmarks and the establishment of alternative healthcare providers capable of meeting the growing health care needs and aspirations of an increasingly urbanized population will be key factors, opine industry watchers. Affordable premium and comprehensive coverage will increasingly become the two pivots around which health insurance will evolve in the near future and how the key players address these contentious issues will help differentiate the winners from the also ran’s.

An exploding population, shift in demographics, rapid urbanization, increasing literacy and awareness about the benefits of health insurance, coupled with the rapid proliferation of lifestyle related diseases are all reasons for the Healthcare Insurance sector to boom in India. Add to this the underlying economic conditions like demand for health insurance, the rapid strides made by the medical tourism industry, increased demand for specialized medical services, the umbrella insurance provides with tax relief and increased competition (especially from new entrants) leading to an expansion in the market and the segment is literally poised to shoot through the sky.

India is the last remaining El Dorado for health insurance so far as latent market sizes go. A market that is approached from either end by safe but suffering from efficiency concerns Nationalised entities and no-holds-barred private concerns often backed by global giants but with serious questions about deliverability and intent on the other. In the middle is a growing population of potential policyholders who are increasingly becoming vociferous about their rights, armed as they are, by the proliferation on internet backed knowledge and enjoying the attention that competition accords them. The  rapid emergence of a private healthcare industry that is aligning itself to insurable interest is another key determinant. How these cross currents, seemingly pulling at different directions play out in the medium to long terms will determine the future of the industry segment.

The piece was originally written for the Express Health Guide 2016