The health insurance market in India is poised for 18-20% year-on-year growth for the next five years, on the back of technology advances that make it easier to conduct business, forecasts Mr Ashish Mehrotra, CEO and Managing Director of Max Bupa Health Insurance. In comparison, the sector grew at about 16% in 2015, he estimated.
“The factors which I feel would play out in the coming year and further sweeten the growth story include the impact of technology and digitisation, product and service innovation, and improved transparency,” wrote Mr Mehrotra in an article published in Livemint.
“Under the aegis of the government’s Digital India initiative, I expect the pace of Internet adoption to accelerate. India should have half-a-billion Internet-connected citizens by the end of 2016. This change is expected to have a halo effect on insurance. The cost of reaching consumers, providing information and processing their claims seamlessly will reduce significantly,” he said.
Furthermore, the policyholder’s experience with health insurance products can be enhanced using digital and mobile platforms. Instant claim approval and preventive healthcare through Internet and mobile apps are already happening. “The benefit of being able to enhance user experience digitally would provide the necessary positive referrals for the category,” he said.
Customer-centric product and service innovation will be the hallmark of new product launches this year, as consumers are demanding more “personalised” products, he predicts.
While the penetration numbers for the industry might still be modest, the growth in awareness numbers indicate that consumers are waiting for the right products, Mr Mehrotra said.
Separately, Mr G Srinivasan, Chairman and Managing Director of The New India Assurance, India’s biggest non-life insurer, said that the health insurance sector is forecast to see growth of around 20% a year in coming years, as it is today the most popular and voluntarily sought-after insurance in the country.
Govt schemes dominate
Mr Srinivasan said in an interview with the Financial Express that health insurance premiums in India totalled about INR210 billion (US$3.1 billion) last year, half of which was generated by the corporate or group health insurance segment, while another 40% came from individuals and 10% from government health schemes.
But the picture is different in terms of the number of people covered by health insurance, he pointed out. Around 25% of the people in the country have some form of health insurance. About 16-17% of the population are covered by government health insurance schemes launched at the national or state level for which people do not really pay much; about 4% would be corporate insurance which employers pay for; and only about 5% of individuals buy health insurance policies, he said.
“As insurers, we have to make sure that there are more intermediaries available and more foot soldiers who can reach out to customers, and make our products more simple and affordable. Then I think that the penetration levels will go up.”