The 77th round of the All-India Debt & Investment Survey reveals that medical care accounts for nearly 12% of total household debt in India. This is compounded by the fact that India’s out-of-pocket spending accounts for 62.7% of current health spending in 2018, while the global average is just 18.1% over the same period.
In this context, health insurance is important because it provides financial protection to people and prevents them from poverty induced by medical indebtedness. The industry has played a very important role in India especially during the covid-19 pandemic when nearly Rs 25,000 crore in covid claims were paid.
The past few years, especially since the pandemic, have seen a huge shift in the perception of the health insurance industry. There has been an increased awareness of the need for health insurance that provides comprehensive and adequate coverage. The pandemic has made everyone aware of the uncertainties of life and its unpreparedness in the face of any health emergency.
Very high medical inflation, coupled with a growing incidence of lifestyle-related illnesses, has made customers recognize the importance of an integrated approach to health insurance, rather than just hospitalization funding.
Recent reports of rising rates of high blood pressure (one in four Indians), diabetes (one in 10 Indians), heart disease (nearly 14% of Indians) and low levels of health awareness demonstrate the possibility for health insurers to work with consumers. to help them understand their health status and improve their health.
A few health insurers have made significant strides in product innovation by bringing together care, coverage and cure solutions in a single offering.
For example, some products offer up to 100% wellness incentive to customers who maintain an active lifestyle. Such a commitment enables a health partnership, which can be a win-win for the client and the health insurer.
Consumers have also realized that buying comprehensive coverage is a better choice because it extends a holistic health care approach with broader coverage against illnesses, pre-existing conditions, or even future living conditions, and incentives for prevention and management of conditions.
Unlike a basic health insurance plan, comprehensive coverage provides protection for outpatient and inpatient treatment, and offers a plethora of wellness benefits that help promote a sustainable lifestyle. A scalable and customizable policy also offers coverage for physiotherapy, AYUSH telemedicine, dental consultation, mental health counselling, nutritional teleconsultation and much more. Thus, many consumers have begun to view health insurance as an essential investment that provides healthy health coverage.
During the pandemic, we’ve also seen growing digital adoption, with customers tracking their health on apps, following app-based fitness regimens, practicing yoga via video, and more. They have become very adept at availing themselves of digital services at every stage of the typical health insurance process: from policy comparison, purchase and consultations to filing claims.
Customers have now started to use their health insurers’ apps and website extensively to access information and process claims. We expect this increase in the use of digital services to be a permanent feature in the national insurance industry.
We are also seeing the emergence of new distribution channels with existing health technology players looking to expand into health insurance. These new channels will certainly contribute to a very refined customer experience, while allowing to create an organized offer with personalization.
It will also help to create a model that is both transparent and personalized. It will be data-driven and digital, making the process of buying and reviewing insurance easier. The pandemic has also brought about a big change in customer consumption behavior. These new channels will help broaden the reach of the industry, especially millennials and the younger demographic.
With incentive wellness and digital being the current trends in the health insurance industry, new customer segments have also emerged. Health insurance has become more attractive and relevant to the “young and healthy” consumer segment. From fear-based selling to emphasizing the importance of health, the industry has come a long way.
Insurers will continue to reinvent their offerings with wellness solutions and invest in their digital health infrastructure and ecosystem. The entire lifecycle will need to be highly digital and focused on self-service for consumers, whether issuing or retaining.
Soon I also see many innovations and digital tools driven by data, machine learning, Blockchain platforms, disease management platforms and insurtechs helping the sector to accelerate efficiency, product innovation and benefits for consumers. I’m also seeing growing convergence around health insurance, healthcare, and outcomes, enabled by the IoT and cloud-based wellness devices and programs delivering superior value to customers. Exciting times ahead!
The author is Managing Director, Aditya Birla Health Insurance
(Disclaimer: The views expressed are those of the author and Outlook Money does not necessarily endorse them. Outlook Money will not be liable for any damages caused to any person/organization directly or indirectly.)