Health insurance

The Indian health insurance industry today stands at Rs 5,125 crore with a CAGR of about 36 per cent (FY 2002-08). Although only around 2 per cent of the population is currently covered under insurance, this rate is growing rapidly and making the health insurance industry one of the fastest-growing sectors in India. This is further established by the fact that the health insurance segment witnessed an astounding growth of 52 per cent in just the first quarter of FY 2009 as compared to FY 2008. The future is bright with the retail health insurance market set to grow faster than group insurance in the near future.The market is likely to grow by leaps and bounds sooner than expected, going by the prediction that this industry is expected to touch Rs 28,000 crore by 2015! Find out more about this industry with Jayata Sharma.

The health insurance market is witnessing a steady growth in demand. In fact, the sector has been growing at a CAGR of about 30-36 per cent since 2005. However, experts believe that public awareness and penetration to the masses and interiors of India is still very poor. Also, maximum efforts on the distribution level made by the insurance companies are still concentrated only on the five metros. The range of products available in the market, both indemnity insurance as well as fixed benefit plans, is distinctly better today as compared to the recent past when the only option people had was to buy a standard mediclaim policy. However, we have a long way to go to achieve the full potential that exists for the private medical insurance market in India.
The key stakeholders in health insurance are first and foremost the common man, who need the insurance protection. Then comes the PSU and private insurance companies (LIC and GIC); medical community and hospitals who provide the care; corporates who need to provide insurance to employees and families. Followed by TPAs who provide the interphase between the insurance companies and policyholders. Accompanied by brokers, agents and banks that partner with insurance companies as distributors of insurance plans. Along with Insurance Regulatory and Development Authority (IRDA), IMA, Medical Council of India (MCI), central and state government, MOHFW and WHO as the regulators and facilitators; NGOs and self-help groups who can reach out to the unorganised sector of self-employed persons, MNC re-insurance companies (Swiss Re and Munich Re) who are enablers of growth, the ombudsman and consumer courts, which protect the interest of the end customer and provide direction.
To increase the penetration of health insurance in India, it is imperative for all the stakeholders to come together to drive a few key initiatives that could help form the building blocks and take the industry in the desired direction. “The key initiatives could include increasing customer awareness, standardisation & accreditation of healthcare providers, building a comprehensive & sustainable data repository, product & channel innovation and usage of technology that are likely to be critical for the growth of the industry,” says Shashwant Sharma, director, KPMG Advisory Services.
With few people having some sort of health insurance, the potential market for it is huge. A recent McKinsey-CII report estimates the number of potential insurable lives at 315 million. Health insurance is currently treated as almost non-existent, with the insurance industry being at a dismal Rs 5,125 crore with only 2 per cent population coverage. “The IRDA has done well to come out with the regulations regarding TPAs. They are, however, currently not comprehensive in their outreach, and are limited only to the private sector,” says Dr Pervez Ahmed, CEO and