In India, quality healthcare is out of the reach of a majority of its population. Medical inflation has made quality healthcare inaccessible to the general public. This is why health insurance is becoming popular amongst the general population. It provides them with financial security and access to a much-needed quality health care. While health insurance should be considered a basic necessity, critical illness insurance must be purchased by those who are prone to inheriting/contracting critical diseases.
Have you ever wondered about the future of the health insurance market? How will it formulate innovation-driven products? How will it create awareness amongst the population that remains uninformed and unprotected to date? Well, in this article, we will tell you how things will unfold and what the future has in store for health insurance market. Let’s get started.
- The Demand for Health Insurance
The growth witnessed by the insurance market is exemplary. As per the Modern Medicare magazine, the health insurance industry has grown rapidly at 18 to 20 percent per annum over the last few years. What matters the most is, this growth is the fastest ever for any general insurance product. Having said that, there is room for improvement as well.
- The opportunity is Golden
Health insurance penetration in India is in single digits, which is diminutive when compared to the developed nations. In those countries, it is 80 percent or more.
In India, even the people who have insurance coverage are usually under-insured. Hypothetically, if only 50 percent our population gets a health insurance plan, the health insurance market will witness a robust growth. Not just that, a drastic improvement would be seen in terms of equitable access to quality healthcare.
With steadily increasing awareness, it is safe to say that the opportunity is golden. Various health insurance providers are working on making the most out of this opportunity.
- Rising Affluence
It is the biggest contributor to overall growth. The rise in affluence of the middle-class of India can contribute to the growth of the Indian health insurance sector. This middle-class section is educated and is well-aware of the benefits of health insurance. The insurance purchases made by the Indian middle-class are estimated grow trifold over the next 15 years.
- Better Healthcare
Healthcare advancements must be in coordination with the fast-growing healthcare infrastructure of India. We have less than 1 hospital-bed for every 1000 people. Planning Commission of India aims to increase this figure to 2 beds per 1000 people in the coming 10 years. This will be the first step towards fulfilling the required health infrastructure.
- Rising Lifestyle Diseases
The sedentary lifestyle is responsible for making our population inactive and susceptible to contracting various lifestyle-related diseases. Compared to earlier times, lifestyles are sedentary now more than ever. Thanks to technological advancements, it is highly unlikely that this trend will go out of style anytime soon. It implies that various chronic lifestyle diseases like heart diseases, diabetes etc. will rise. As per the studies conducted by KPMG, the diagnostic revenues have increased by 25% per annum due to an increase in tests pertaining to lipid profiles, thyroid & hormonal levels, and blood glucose levels. It clearly reflects the growth of lifestyle diseases in our country. These ailments last a lifetime and are a huge burden on the pocket.
- Government Push
The central, as well as state, governments are widening the scope of health coverage for the public, especially for the poorer sections. The numbers to be covered during the upcoming few years are overwhelming. It doesn’t matter if the private sector plays a role or not, health insurance awareness will be encouraged by the government. Rashtriya Swasthya Bima Yojna by National Health Insurance is formulated especially for individuals below the poverty line. Another initiative by the government, which has covered millions under a health insurance plan, is Rajiv Aarogyasri in Andhra Pradesh.
- The IRDA Effect
Over the last years, IRDA has been in a pro-active state. Be it formulating guidelines for cashless hospitalization, removing the age of entry for medical insurance, or plan portability – it is apparent that IRDA has a practical attitude towards the insurance industry.
With more changes, various doors will open for growth. It’s up to the insurance provider so as to how they make the most of it. Starting from working on health insurance as a stand-alone domain to collaborating with various industry bodies like CII and FICCI to set better governance rules, IRDA has indeed acted as a catalyst in triggering the growth of health insurance in India. Thanks to the efforts by IRDA, the health insurance industry will drive forward swiftly.
In a Nutshell
The growth of the health insurance industry is certain. It is due to some basing underlying drivers. Growth has to be earned through innovation in two areas i.e. products and services. Insurance buyers care about products and services. If world-class products and services could be provided, more and more people will be attracted to health insurance products. Needless to say, it will result in higher revenue. It is a win-win situation for both insurance providers and insurance buyers.