How has the demand for health insurance changed post-COVID, and what factors have contributed to the increased growth in the industry?
The demand for health insurance has indeed seen a significant uptick post-COVID. Before the pandemic, the industry was growing at a rate of 18-20 per cent, and now it's soaring at 25 per cent and beyond, encompassing both the previous and current years. The regulatory landscape has expanded, creating more opportunities, and this upward trajectory is expected to continue. Health insurance has not only become the fastest-growing category in insurance but has also surpassed motor insurance. The share of health insurance has outpaced motor insurance in both the current and preceding years.
How is technology, including Artificial Intelligence (AI), being utilized to enhance various aspects of your operations?
Technology, especially AI, plays a pivotal role across different stages of our operations. From prospecting to selling, our sales team utilizes an app equipped with AI to identify potential customers, enhancing sales productivity. In underwriting, AI is integrated into rule engines to streamline the process. We leverage technology in customer engagement, rewarding healthy behaviours tracked through our app. Additionally, technology aids in claims prediction and, significantly, in fraud management. About 80 per cent of our services are self-service, empowering customers to manage their needs independently.
Could you provide more insights into the different elements of fraud in the health insurance industry?
Fraud in health insurance comprises three elements: hard fraud, waste, and abuse. Hard fraud involves fictitious claims, while waste and abuse occur when claims surpass actual costs, exploiting the insurance system. Examples include overcharging for medical procedures. In some instances, fraudulent claims involve fabricated incidents or connivance with hospitals. The industry faces challenges related to non-disclosure by customers or fraudulent actions by distributors.
Have you observed an increase in coverage for retail and group health insurance policies post-COVID?
Yes, there has been a notable increase in both retail and group health insurance policies. Corporations are not only more willing to provide health insurance but are also expanding the scope of coverage. Critical illness coverage and corporate outpatient department (OPD) expenses are on the rise. In the retail sector, there's a trend towards higher sum assured, as people recognize the importance of comprehensive coverage in light of increasing healthcare costs. Innovations, such as rewarding policyholders for maintaining good health, contribute to the evolving landscape of health insurance.
How much has the average claim size increased, and what factors contributed to this rise?
The average claim size has increased from 45,000 to a range of 60,000-65,000. This escalation is primarily driven by rising hospital costs and increased treatment expenses.
Over the past three years, how much and why has the premium increased, and do you anticipate further increases?
Premiums have increased twice in the last three years, directly linked to the escalating cost of claims. Also, the sector observed a rise in the incidence of infectious diseases, heart problems, and cancer post-COVID. Health insurance essentially funds healthcare costs, and any increase in healthcare expenses necessitates a corresponding increase in premiums. Efforts, such as collaborative industry initiatives to reduce fraud and enhance claim processing efficiency, are being undertaken to mitigate the impact on premiums. The focus is on achieving 100 per cent cashless transactions and implementing measures like health claims exchange and common empanelment as recommended by regulators.
What percentage of your premium is derived from retail health insurance?
Approximately 52-55 per cent of our premium comes from retail health insurance.
Within retail, what percentage of premium is contributed by bancassurance?
Within the retail segment, bancassurance accounts for about 50 per cent of the premium.
Could you provide an overview of Bima Vistaar and how it aims to address the gap in health insurance coverage?
Bima Vistaar is currently in the discussion stage and aligns with the vision of the regulatory body, Irdai Chairman, Debasish Panda. The goal is to bridge the gap in health insurance coverage for the missing middle segment—approximately 40 crore people—by creating affordable insurance solutions. Bima Vistaar aims to offer life, health, and other forms of insurance, including home insurance, through channels such as Bima Vahak (insurance correspondents). The initiative is geared towards providing accessible and affordable health insurance for those who need it but may struggle to afford it. Progress has been made, and it is anticipated that the initiative will be ready for market introduction within the next six to nine months, with potential acceleration through state adoption.
