PROBLEMS & PROSPECTS OF INSURERS IN HEALTH INSURANCE SPACE IN INDIA BY G SRINIVASAN CMD CMD UNITED...
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Transcript of PROBLEMS & PROSPECTS OF INSURERS IN HEALTH INSURANCE SPACE IN INDIA BY G SRINIVASAN CMD CMD UNITED...
PROBLEMS & PROSPECTS OF INSURERS IN HEALTH INSURANCE SPACE IN INDIA
• BY G SRINIVASAN• CMD CMD UNITED INDIA INSURANCE COMPANY LTD
• 24/01/2012
HEALTH INSURANCE IN INDIA – A SNAPSHOT
• OVER A DECADE OF FORMATION OF THIS DEDICATED SPACE
• 22 GENERAL INSURANCE COMPANIES WITH 3 HEALTH MONOLINE COMPANIES
• LIFE INSURANCE COMPANIES HAVE ALSO ENTERED THIS SPACE
• # OF POLICY HOLDERS INCREASED FROM 8.3MILLION IN 2004 TO OVER 200 MILLION IN 2011
G SRINIVASAN, CMD
HEALTH INSURANCE IN INDIA – A SNAPSHOT
• HEALTH INSURANCE PREMIUM Rs 11480 Crs IN 2010-11 WITH A GROWTH RATE OF OVER 36%
• IN THE CURRENT YEAR HEALTH INSURANCE PREMIUM UPTO DECEMBER 2011 WAS 0VER Rs 9661Crs, GROWING AT ABOUT 18%
• HEALTH INSURANCE EXCLUDED IN INDIA : OVER 950 MILLION (FICCI-McKINSEY SURVEY 2011)
G SRINIVASAN, CMD
HEALTH INSURANCE IN INDIA – A SNAPSHOT
• HEALTH INSURANCE BREADTH OF COVERAGE IN INDIA HAS INCREASED FROM 4% TO 20% OF THE POPULATION IN LESS THAN 5 YEARS (ISB – INSIGHT VOL 9 ISSUE 2)
G SRINIVASAN, CMD
HEALTH INSURANCE IN INDIA – A SNAPSHOT
• HEALTH INSURANCE PENETRATION IN INDIA IS LOW – ONLY AROUND 2.2% OF THE POPULATION IS COVERED UNDER PRIVATE HEALTH INSURANCE & RURAL HEALTH INSURANCE PENETRATION IS LESS THAN 10% (PwC HEALTH INSURANCE IN INDIA REPORT-MARCH 2011)
G SRINIVASAN, CMD
HEALTH INSURANCE IN INDIA - POISED FOR AN ACCELERATED
GROWTH CURVE!
• NEAR ABSENCE OF ANY SIGNIFICANT RISK PROTECTION AGAINST MAJOR HEALTH RELATED EXPENDITURE IN INDIA, AS INSURANCE & OTHER ORGANISED FORMS OF PAYMENT FOR HEALTH SERVICES (ESIS, CGHS) BARELY CONSTITUTES A TENTH OF ALL HEALTH EXPENDITURE
• NEARLY 80% OF HEALTHCARE EXPENSES FUNDED OUT OF POCKET BY PEOPLE IN INDIA AND IS A LEADING CAUSE OF IMPOVERISHMENT IN THE COUNTRY
G SRINIVASAN, CMD
HEALTH INSURANCE IN INDIA - POISED FOR AN ACCELERATED
GROWTH CURVE!• NEARLY 39 MILLION PEOPLE ARE PUSHED TO POVERTY
BECAUSE OF ILL HEALTH EVERY YEAR
• ABOUT 47% OF HOSPITAL ADMISSIONS IN RURAL INDIA & 31% IN URBAN INDIA WERE FINANCED BY LOANS & SALE OF ASSETS - 74% 0F MEDICAL EXPENDITURE WAS INCURRED ON OUT-PATIENT TREATMENT (THE LANCET – HEALTH REPORT 2010)
• INDIA SUFFERS 20% OF GLOBAL DISEASE BURDEN (THE LANCET REPORT 2010)
G SRINIVASAN, CMD
HEALTH INSURANCE IN INDIA - POISED FOR AN ACCELERATED GROWTH
CURVE…..• RISING DISPOSABLE INCOMES AND LIFESTYLE
CHANGES BRING IN NEW HEALTH RISKS – GROWING LONGEVITY OF THE POPULATION
• HEALTHCARE SPEND IN INDIA ESTIMATED TO DOUBLE TO Rs 2250 BILLION(US$ 42 BILLION) BY 2014
• COMPLEMENTING THE SAME , HEALTH INSURANCE IN INDIA IS PROJECTED TO GROW AT A CAGR OF OVER 15% TILL 2015 ( BCG REPORT- APRIL 2011)
G SRINIVASAN, CMD
HEALTH INSURANCE IN INDIA - POISED FOR AN ACCELERATED GROWTH CURVE…..• AT THIS RATE ONLY 50% OF THE COUNTRY’S POPULATION
WOULD HAVE SOME HEALTH INSURANCE COVER BY 2033 (PwC HEALTH INSURANCE IN INDIA REPORT-MARCH 2011)
• INCREASED GOVERNMENT FOCUS ON HEALTH INSURANCE FOR THE MARGINALISED POPULATION
• HEALTH INSURANCE TO EMERGE AS THE BLOCKBUSTER SEGMENT IN THE NON-LIFE INSURANCE SPACE, IT COULD ACCOUNT FOR 40% OF THE TOTAL NON-LIFE INSURANCE PREMIUM IN INDIA BY 2020 (BCG REPORT 2011)
G SRINIVASAN, CMD
HEALTH INSURANCE PREMIUM IN INDIA
YEAR HEALTH PREMIUM(Rs Crs)
GROWTH RATE(%)
HEALTH PREMIUM AS A % OF TOTAL PREMIUM
2004-05 1670.21
------ 9.55
2005-06 2222.09 33.06 10.922006-07 3208.73 44.40 12.882007-08 5124.95 59.72 18.422008-09 6625.46 29.28 21.832009-10 8305.18 25.35 23.992010-11 11480.12 36 26
G SRINIVASAN, CMD
CHALLENGES BEFORE THE INSURERS
• HIGH INCURRED LOSS RATIO OVER THE YEARS – 111% IN 2009-10 & 100% IN 2010-11
• TPA MANAGEMENT
• HEALTHCARE PROVIDER MANAGEMENT
• ISSUES OF ADVERSE SELECTION OF RISKS
G SRINIVASAN, CMD
CHALLENGES BEFORE THE INSURERS
• LACK OF DATA AVAILABILITY ON DISEASE & USAGE PATTERNS OF DIFFERENT SOCIO-ECONOMIC SEGMENTS IMPACTING PRODUCT INNOVATION
• LIMITED PRODUCT RANGE IN COVERAGE RESULTING IN MISMATCH BETWEEN THE DEMAND & SUPPLY OF INSURANCE – WHICH STEMS PENETRATION
G SRINIVASAN, CMD
CHALLENGES BEFORE THE INSURERS
• HIGH INCIDENCE OF DOUBTFUL /SUSPECT CLAIMS: ACCORDING TO A McKINSEY REPORT (2010), ATLEAST 20% OF HEALTH CALIMS IN INDIA ARE SUSPECT/DOUBTFUL
• RISE IN MORAL HAZARD AMONG ALL THE STAKE HOLDERS IN THE INSURANCE – TREATMENT VALUE CHAIN RESULTING IN LARGE VARIATIONS IN HEALTHCARE COSTS FOR THE SAME AILMENT/TREATMENT (PROF K SRINATH REDDY EXPERT COMMITTEE REPORT ON HEALTH INSURANCE IN INDIA -JANUARY 2011)
G SRINIVASAN, CMD
CHALLENGES BEFORE THE INSURERS
• LACK OF INNOVATION IN BUSINESS MODEL TO PENETRATE THE HUMONGOUS UNSERVED RURAL MARKET
• TRUST-DEFICIT IN THE CUSTOMERS/ CONSUMERS, WHICH NEEDS TO BE IMMEDIATELY CLOSED OUT
• LACK OF STANDARDISED POLICIES ACROSS THE INSURERS
G SRINIVASAN, CMD
CHALLENGES BEFORE THE INSURERS
• LOW AWARENESS AMONG THE POPULATION ABOUT THE BENEFITS OF HEALTH INSURANCE
• LACK OF CAPACITY TO BUY HEALTH INSURANCE
• FAILURE TO PROVIDE QUALITY HEALTHCARE IN THE COUNTRY, ESPECIALLY IN TIER 2 & 3 TOWNS & RURAL HINTERLAND TO MATCH THE GROWING HEALTH INSURANCE PENETRATION
G SRINIVASAN, CMD
CHALLENGES BEFORE THE INSURERS
• LACK OF STANDARDISATION & ACCREDITATION NORMS IN THE HEALTHCARE INDUSTRY
• ABSENCE OF REGULATOR FOR HEALTHCARE SECTOR
G SRINIVASAN, CMD
SOLUTIONS
• PROACTIVE REGULATOR & INSURERS ARE WORKING TOWARDS RAMPING UP HEALTH INSURANCE AWARENESS LEVELS THROUGH VARIOUS METHODS
• INNOVATIONS IN PRODUCT OFFERINGS & SERVICE DELIVERY IS BECOMING THE ORDER OF THE MARKET
G SRINIVASAN, CMD
SOLUTIONS
• TIGHTER CONTROL & MONITORING OF TPAs & HOSPITALS
• STANDARDISATION ACROSS THE INSURANCE VALUE CHAIN IS BEING SERIOUSLY LOOKED AT-
(1) CRITICAL ILLNESS DECISION & DETAILS (2) TREATMENT PROTOCOL, FOR ATLEAST MAJOR AILMENTS (3) BILLING PROCEDURES (4) LIST OF NON-MEDICAL EXPENSES
G SRINIVASAN, CMD
SOLUTIONS
• FRAUD IDENTIFICATION & CONTROL STRATEGIES BEING IMPLEMENTED
• INSURERS ARE BUILDING THEIR DATABASE & THUS A LARGER INDUSTRY DATA IS BECOMING AVAILABLE
G SRINIVASAN, CMD
SOLUTIONS• BIG DATA ANALYTICS & PREDICTIVE
MODELLING TOOLS WOULD BUILD A ROBUST FRAMEWORK FOR PRODUCT DESIGNING, PRICING & CLAIMS MANAGEMENT
• ENHANCED LEVEL OF CUSTOMER CARE SERVICES & STRONG GRIEVANCE REDRESSAL MECHANISMS PUT IN PLACE
G SRINIVASAN, CMD
SOLUTIONS
• MORE TRANSPARENCY BEING BROUGHT ABOUT IN POLICY COVERAGE & CLAIM PROCESS
• RISK-BASED PRICING, ESPECIALLY FOR GROUP COVERS
• IDEATION & INCUBATION OF NEW DISTRIBUTION MODELS TO PENETRATE THE UNTAPPED & UNDER-TAPPED RETAIL & MOFUSSIL MARKETS
G SRINIVASAN, CMD
INSURERS MAJOR INNOVATIONS TO DRIVE HEALTH INSURANCE PENETRATION
# MASS HEALTH INSURANCE SCHEMES - RSBY & OTHER GOVERNMENT SPONSORED HEALTH INSURANCE PROJECTS FOR DIFFERENT TARGET POPULATION- ESPECIALLY BPL FAMILIES
# OTHER DISTRIBUTION MODELS LIKE COMMUNITY - BASED HEALTH INSURANCE PROGRAMS & MICRO HEALTH INSURANCE PROGRAMS FOR VICTIMS OF NATURAL CALAMITIES
G SRINIVASAN, CMD
INSURERS MAJOR INNOVATIONS TO DRIVE HEALTH INSURANCE PENETRATION
# VILLAGE ADOPTION PROGRAM ( AS A VEHICLE TO PUSH HEALTH INSURANCE INCLUSION OF THE ENTIRE VILLAGE POPULATION)
G SRINIVASAN, CMD
MASS HEALTH INSURANCE SCHEME - RASHTRIYA SWASTHYA BIMA YOJANA (RSBY)
• A TRANSFORMATIVE GOVERNMENT SPONSORED HEALTH INSURANCE SCHEME FOR BPL POPULATION
• SCHEME STRUCTURED HEAVILY LEVERAGING IT BACKBONE(BIOMETRIC SMART CARDS,REALTIME DATA CAPTURE & MONITORING) AND ACTIVE COLLABORATION BETWEEN THE KEY STAKE HOLDERS (HOSPITALS, TPAs, STATE GOVERNMENTS,ETC.,)
• RAPIDLY ROLLED OUT ACROSS 26 STATES BY COVERING ABOUT 265 BPL FAMILIES COVERED & ABOUT 6.40 CRORE BPL POPULATION COVERED TILL DATE
G SRINIVASAN, CMD
CHALLENGES OF MASS HEALTH INSURANCE PROGRAMS
• FRAGMENTED HEALTH INSURANCE INCLUSION MEASURES OF THE GOVERNMENT
• PRICING INADEQUACIES
• FRADULENT & SUSPICIOUS CLAIMS
G SRINIVASAN, CMD
CHALLENGES OF MASS HEALTH INSURANCE PROGRAMS
• POOR QUALITY OF HEALTHCARE ESPECIALLY IN TIER II & III TOWNS & RURAL AREAS
• DIFFICULTY IN RAMPING UP ENROLMENTS UNDER THE SCHEMES
• HIGH INCURRED LOSS RATIO
G SRINIVASAN, CMD
THE LONG HAUL……
• LONG TERM VIABILITY OF HEALTH INSURANCE SEGMENT CRITICAL–KEY REQUIREMENTS– RIGHT PRICING, HIGH PRODUCT INNOVATION, PROACTIVE CLAIMS MANAGEMENT
• HEALTH INSURANCE IN INDIA HAS TOUCHED THE INFLECTION POINT & IS ON A HUGE GROWTH TRAJECTORY FOR THE NEXT FEW YEARS
G SRINIVASAN, CMD
THE LONG HAUL……
• THE INDUSTRY IS GOING THROUGH THE ADJUSTMENT & ALIGNMENT PHASE WHEREIN THE MULTIPLE STAKE HOLDERS ARE UNDERSTANDING ONE ANOTHER’S CONCERNS AND TRYING TO ADDRESS THE SAME FOR A WIN-WIN PROPOSITION TO ALL
• THE REGULATOR IS ACTIVELY ENGAGING WITH ALL THE STAKEHOLDERS TO PROTECT & PROMOTE THE CAUSE OF THE INSURANCE INDUSTRY AND MORE PARTICULARLY THE CAUSE OF THE CUSTOMERS/CONSUMERS
G SRINIVASAN, CMD
THE LONG HAUL……
• A FOCUSSED/DEDICATED REGULATORY OVERSIGHT ON HEALTH INSURANCE WOULD BRING MORE VALUE TO THE INDUSTRY, AS HEALTH INSURANCE IS FUNDAMENTALLY DIFFERENT FROM THE OTHER LoB
• A REGULATOR FOR THE HEALTHCARE PROVIDER SECTOR WOULD GO A LONG WAY FOR A CONCERTED ACTION TO GROW THE HEALTH INSURANCE SEGMENT
G SRINIVASAN, CMD
THE LONG HAUL……• TECHNOLOGY DEPLOYMENT (WEB APPS, HAND-HELD
DEVICES, CLOUD SERVICES,ETC,.) & DATA ANALYTICS WOULD BE THE ULTIMATE GAME CHANGERS-FOR FURTHERING PENETRATION, PRODUCT INNOVATIONS & DELIVERING SUPERIOR CUSTOMER SERVICE
• AWARENESS NEEDS TO BE ENHANCED ACROSS THE CUSTOMER/CONSUMER SEGMENTS ON THE BENEFITS OF HEALTH INSURANCE AS A PROACTIVE PURCHASE AND THE DOWNSIDE OF A REACTIVE BUY
G SRINIVASAN, CMD
THE LONG HAUL……• GOVERNMENTS SHALL CONTINUE TO BE THE KEY
DRIVER OF PENETRATION OF HEALTH INSURANCE IN THE COUNTRY
• INSURERS HAVE TO COLLABORATE WITH A MULTITUDE OF ENTITIES, WHO HAVE OUTREACH CAPABILITIES, TO DISTRIBUTE HEALTH INSURANCE PRODUCTS, IN A MASSIVE WAY, ACROSS THE RETAIL SEGMENT & RURAL HINTERLAND
G SRINIVASAN, CMD
THE LONG HAUL…… HEALTH INSURANCE IS A CRITICAL
REQUIREMENT FOR INDIAN GOVERNMENT’S ASPIRATION TO COVER THE ENTIRE 1.2 BILLION POPULATION UNDER THE UNIVERSAL HEALTH INSURANCE COVERAGE BY THE END OF THE 12TH PLAN (2012-17) AND,
INSURERS SHALL SEIZE THE OPPORTUNITY NOT JUST AS A BUSINESS PROPOSITION BUT ALSO AS A SOCIAL OBLIGATION TO OUR COMPATRIOTS
G SRINIVASAN, CMD
THANK YOU
G SRINIVASAN, CMD