Challenges Faced by Web Aggregators in Health Insurance Industry
"Explore the key challenges faced by web aggregators in the health insurance sector as presented by experts Dhruv Sarin and Ankit Mittal from Policybazaar. Discover insights on tackling these challenges through innovative products, technology, and processes for a successful way forward."
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Presentation Transcript
Key Challenges faced by Web Aggregators in Health Insurance Presented by Dhruv Sarin Director, Health Ankit Mittal VP Actuarial
Agenda About Policybazaar What we have done till now Deviation from traditional risk based approach Health insurance The way we know it Challenges in Health Insurance People face while buying Why people don t buy Our approach to tackle the challenges - Innovations Products Technology Process Way Forward
Quick summary of Policybazaar: Significant player in the Indian insurance industry 90% market share of Online Insurance Comparison 2 million p.a. Transacting customers 120% sales growth Year over year 25 million p.a. Quotes compared 98% sales from direct traffic 330+ plans From 37 Insurers
Owing to focus on right product educationwe are today synonymous with online insurance Very effective marketing initiatives that are creating strong brand pull & recall Recognized in the industry as the flag- bearer for digital financial services Excellence in Omni-Experience, Operations & Revenue 2015 & 2016 Best Corporate Brand 2016 Top 100 FinTech Innovators Globally Best Financial Website 2013 and 2014 Customer Value LeadershipAward 2014
Strong brand recall and high brand affinity as compared to peers Unparalleled growth in premium and transactions across business lines 98% of the sales thus being driven by organic and unpaid traffic Direct SEM Others Transactions (k) Premium (INR Cr) Sep-12 Jul-13 Aug-15 Jun-16 Sep-17 Dec-13 Apr-12 Mar-15 Apr-17 Oct-14 Jan-16 Feb-13 May-14 Nov-16 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Aug-11 Aug-12 Aug-13 Aug-14 Aug-15 Aug-16 Apr-11 Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Term Travel Invest 2w Health Others Motor Txn
Behavioral parameters considered in addition to Risk parameters Assisted vs. Unassisted Talk time Plan Rank Time taken to purchase the policy after first visit on website Toggling between plans
Loss Ratios based on behavioral parameters State/Credit Type Assisted Unassisted Make/Credit Type Assisted Unassisted Delhi 65% 55% MARUTI 70% 73% Maharashtra 65% 55% HYUNDAI 74% 64% Haryana 90% 70% HONDA 76% 60% Karnataka 51% 57% FORD 77% 58% Uttar Pradesh 92% 86% TATA MOTORS 77% 73% Gujarat 92% 69% TOYOTA 90% 62% Andhra Pradesh 56% 66% CHEVROLET 91% 61% Tamil Nadu 96% 62% MAHINDRA AND MAHINDRA 58% 58% Rajasthan 77% 60% VOLKSWAGEN 111% 86% West Bengal 55% 63% SKODA 116% 87%
Health Insurance The Way we know 4.5 million unique visitors on our website annually (Health Portal only) And growing . 48% from top 8 cities 25% from other state capitals. Remaining Rest of India and overseas FY 2017-18 PB targeting 0.25 million health policies 6% - 7% relevant market share (of India health insurance industry) 25%-26% of total health online business 30% penetration in below 35 age group About 35 million minutes of talk time by health agents so far in this FY Median SI 5 lacs ; average premium 12500 ; 15% multi year policies ; 34% cross attachments (Health related products) 100% end to end purchase on our platform
Key challenges people face while purchasing health insurance Product Unfamiliarity with the jargons of heath insurance Unaware about the exclusions of health policies Insufficient clarity about the plan benefits Lack of availability of trained in-person assistance Process Multiple contact points to complete the purchase Smooth end to end journey. Inflexible payment options PB providing EMI options.
Why Indians dont buy Health Insurance Our survey results Awareness Misconception about always being healthy Trust Affordability Other available options group coverages Protections vs. Investment Value for money paid Product suitability Unable to assess the value of health plans
What would best describe your reason to not buy health insurance? 37 I am confused on what is good for me I am interested but it doesn t cover my/family s condition 32 21 I am interested but have not sat on it It is costly for value 16 I cannot afford it 13 10 I am covered elsewhere
What factors, if introduced in health insurance, may propel you to make the purchase? Coverage for regular items like OPD, Medicines 61 Return of money 42 Regular Monthly Premiums 37 Coverage for chronic/acute conditions 29 Regular advice on health 18
What would best describe the reasons you bought health insurance from offline channels? Trust 44 Better Price 38 25 Regular Monthly Premiums Was Detailed I am not comfortable with online purchase 25 Face to Face 19 19 Intuitive, User Friendly 13 Better Options
Our approach to mitigating problems Options Choice of Plans Data Huge data bank of customers and non customers to be leveraged including behaviour data Technology Health Exchange Portability Chat Bot Voice Bot Behaviour Overall Support Financing the health care spends Innovations
Innovation Products Health products Term product PNB MetLife Mera Term Plan Investment Product ET Life Wealth Plus Motor Incorporation of behavioral parameters leading to appropriate Discounting / Loading
New market-first products MARKET-FIRST 4 new indemnity market-first products (1) Cancer Care (2) Cardiac Care (3) Critical Care (4) Surgical Care Pricing starting at Rs. 60/month highest pricing at 60% of existing products Affordable & Value-for-money SINGLE-RATE Simple one-tier rate for all entrants Same rate for all ages bank products Overall portfolio literally extinguished and re-drawn after specified periodic intervals YOUNG-AT-HEART Current plan pricing driven by young financing the old Rates for young entrants hence not attractive enough Plans focused on the young customer Proposal to distribute the risk across time instead of across lives
Closed Loop All-in-All Healthcare (Closed Loop similar to CGHS) This is an all-extensive cover that will provide for all healthcare need Inpatient Hospitalization, Outpatient Department, Medicines, Critical Illness etc. Issue is about pricing these OPD covers otherwise exist in the market Utilization is assumed to be between 70-80% making pricing unattractive Given the price, the purchaser again utilizes it to >90% An unnoticed but significant issue is of false alarms getting to hospital on emergency but being told there is no issue The intention is hence to create a cover that allows customers to use for all kinds of healthcare issues To keep the costs low and frauds under control, a closed loop is the best way So for additional covers like OPD and medicines, this way is preferred The basic cover of hospitalization will exist across, even outside the network Why will it work for customers OPD constitutes 70% of overall healthcare spends of a family If priced correctly, most customers will be happy to use the facility fairly
HealthXchange: radically simplifying health- insurance-discovery Medical Examination Medical Examination Medical Examination Apply / Pay Apply / Pay Apply / Pay Traditional Purchase Process . . . Under writing Under writing Under writing Decision Decision Decision Conditional acceptance or rejection Conditional acceptance or rejection Conditional acceptance or rejection Iteration / Insurer 1 Iteration 2 / Insurer 2 Iteration n / Insurer n Underwriting Insurer 1 Underwriting Insurer 2 . . . Decision Health Exchange Medical Examination Apply Customer acceptance Pay Underwriting Insurer n
Way Forward Insurers can leverage PB pool of analytics, actuarial, operations, market knowledge for : Inclusions of behavioral parameters in risk based pricing. Product development Create benchmarks of LRs , Frequency, Severity, ICD based statistics etc. for online customers Jointly (PB and Partners) showcase to regulator how to innovate that would lead to greater customer satisfaction
