Innovation in Health Insurance: Current Scenario and Challenges in India
The 25th Indian Fellowship Seminar highlighted innovation in health insurance products in the Indian market, focusing on the current healthcare landscape, facts, market scenario, challenges faced by the industry, and perspectives from insurers and policyholders. The seminar discussed the need for innovation in product offerings to address the evolving healthcare needs in India. Explore the insights shared by industry experts and the way forward for enhancing health insurance offerings in the country.
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Presentation Transcript
25th Indian Fellowship Seminar Innovation in health insurance product offerings in the Indian market Mentor: Vandana Baluni Presenters : Tanmeet Kaur Omer Thaika Shaikh Nirav Shah Date: 9-10th June 2016 Place: Mumbai Indian Actuarial Profession Serving the Cause of Public Interest
Content What is Innovation? Current scenario of healthcare in India Facts about Health Care Current market scenario of health insurance in India Challenges faced by Health Insurance industry Insurer perspective Policyholder perspective Innovation in product offerings Way Forward www.actuariesindia.org 2
What is Innovation? The greatest discovery comes not from seeing the new landscapes but in seeing the familiar with new eyes Marcel Proust www.actuariesindia.org 3
Innovations in Health Insurance(HI) in India - Situations Then & Now Status of HI: 2001 Current Scenario Sales through agents only Sales through: Agents, Online & Banks Receipt of policies on email and SMSs Online tracking of claims Paper based policy issuance & claims processing Digitization of records Integration of systems with TPA Limited use of technology No standard healthcare terminologies across industry Standardization of certain diseases and terminologies www.actuariesindia.org 4
Content What is Innovation? Current scenario of healthcare in India Facts about Health Care Current market scenario of health insurance in India Challenges faced by Health Insurance industry Insurer perspective Policyholder perspective Innovation in product offerings Way Forward www.actuariesindia.org 5
Facts about health care in India Health care funding 9% 33% Government Out of Pocket 58% Insurance Insurance funding is low compared to other type of funding India has one of the highest out of pocket contribution towards health care funding 1 WHO report 2012 www.actuariesindia.org 6
Facts about health care in India (contd.) 1 of global burden of disease India accounts for 20% Out of pocket expense in 2009: ~ 60% of total health expenditure 3.2% of Indians would fall below the poverty line because of high medical expenses 1 30% of rural and 20% of urban population do not go for treatment due to financial constraints 2 47% and 31% of hospital admissions in rural and urban areas financed by loans and sale of assets 2 1 WHO, World health statistics, 2012 2 Planning commission www.actuariesindia.org 7
Current market scenario of health insurance in India # General insurance penetration 4.3 4.1 4.1 General insurance penetration: 0.70%1 3.1 Life insurance penetration: 2.60% 3.3 1 2.7 2.6 World 2.7 2.4 Health insurance contributes 26% to General Insurance GWP2 1.4 Health Insurance penetration: ~0.18% 0.7 Hong Kong Japan# South Korea# Switzerland United Kingdom Taiwan South Africa India# France United States # Data relates to financial year 2013-14 & 2014-15. 1 Swiss Sigma study 2 IRDA Annual Report 2014-2015 www.actuariesindia.org 8
Current market scenario of health insurance in India (contd.) 1 Annual growth in premiums 37% 26% 25% 20% 19% 17% 17% 15% 9% 7% 2010 - 11 2011 - 12 2012 - 13 2013 - 14 2014 - 15 Health GI Health insurance premiums: Annual growth rate ~22% over last 5 years General Insurance premiums Ex Health : Annual growth rate ~16% over last 5 years 1 1 Source: IRDA Annual Report www.actuariesindia.org 9
Content What is Innovation? Current scenario of healthcare in India Facts about Health Care Current market scenario of health insurance in India Challenges faced by Health Insurance industry Insurer perspective Policyholder perspective Innovation in product offerings Way Forward www.actuariesindia.org 10
Challenges faced by HI industry - Insurer perspective Limited reach Significant UW losses for Health business in India Lack of standardization in health care Industry Insufficient data on Indian consumer and disease pattern Lack of communication between TPA and Hospital PED disputes between consumer and TPA Service Tax imposition on premium www.actuariesindia.org 11
Challenges faced by HI industry - Policyholder perspective Complex product structure Increase in healthcare cost Lack of awareness Affordability of premiums Lack of customization: Fixed product structures Low confidence in delivery system Delay in settlement of claims www.actuariesindia.org 12
Content What is Innovation? Current scenario of healthcare in India Facts about Health Care Current market scenario of health insurance in India Challenges faced by Health Insurance industry Insurer perspective Policyholder perspective Innovation in product offerings Way Forward www.actuariesindia.org 13
Rewarding healthy behaviour Healthy Behaviour Physically active Healthy eating Tobacco cessation Reward Reduction in premium Increase in benefits Potential Outcome Lower in-patient claims in long run Affordable premium in long run Help in increase in consumer awareness Increase in health insurance penetration www.actuariesindia.org 14
Chronic conditions Management Current product offerings Maximum waiting period for PED s: 4 years Plans available with less waiting period No day 1 cover for hospitalization No cover for treatment, diagnostics or medication Outcome Customized offering based on condition and stage Early detection & treatment Reduced in-patient hospitalization claims Increase in health insurance penetration www.actuariesindia.org 15
Product on a click of a button Simplified product for customer: Easy to understand Pre-underwritten Minimal documentation Quicker issuance http://www.calliflower.com/wp-content/uploads/2012/05/1338409264_289.png Outcome Increased value for money Increased engagement Hassle free claim settlement Increased confidence in delivery system Risk for insurer: Moral hazard www.actuariesindia.org 16
Tiered Benefits Lump sum benefit on occurrence of Critical Illness Payable on diagnosis of a critical illness Amount dependent on severity of illness Further claims may be lodged if disease advances Outcome Need based solution Prevent diseases progression Value for money Cover continues after claim www.actuariesindia.org 17
Multiple claim payment on CI Benefit payable on diagnosis of a critical illness Policy remains in force after diagnosis of a critical illness Further claim payment on diagnosis of an unrelated critical illness Example: Covered Illness Initial Eligibility Second Claim: Cancer Second Claim: Stroke Second Claim: Heart Attack Cancer Stroke Heart Attack www.actuariesindia.org 18
Income replacement Provides an income on disability or illness Risks covered Illness Accident Disability Unemployment Outcome Regular payment in period of incapacity Payment linked to pre-incapacity income Access to rehabilitation services www.actuariesindia.org 19
Long term care Provides personal and nursing care to those unable to look after themselves without any support Target segment: Senior Citizens Individuals with disability by birth Individuals with disability due to accident Types of benefits: Lump sum payment Fixed benefit payable at regular intervals Direct payment to the care house www.actuariesindia.org 20
Health Savings Account Exclusive savings account to meet healthcare cost Unutilized fund rolled over year on year Fund earns investment return Flexible deposit option Health saving account options: Employer schemes: employer makes contribution Self managed health account Contributions eligible for tax benefits www.actuariesindia.org 21
Content What is Innovation? Current scenario of healthcare in India Facts about Health Care Current market scenario of health insurance in India Challenges faced by Health Insurance industry Insurer perspective Policyholder perspective Innovation in product offerings Way Forward www.actuariesindia.org 22
Way forward Strategic assessment Proof of Concept-Model Testing Design final solution Product Pricing Delivery System Infrastructure Identification of risks Building risk mitigation strategies Ready for go to market www.actuariesindia.org 23
Thank You! Any Questions? www.actuariesindia.org 24
