April 2012

On Road to Success

The advent of various social health insurance schemes has opened a significant new market segment

Alam Singh, Assistant Managing Director, Milliman India

What is Millimans footprint in Indian health insurance space?

Milliman has been in India since 2005. We employ more than 90 people in India. Our Gurgaon office focuses on health insurance. Our client base includes insurers, government institutions, TPAs, healthcare providers, large employers, multilateral agencies, disease management and wellness companies, IT services companies, etc. We not only service clients in India, our staff frequently works onsite in US, UK, Europe, Africa, Middle East and South East Asia. Our Indian employees have global exposure and knowledge of very diverse practises of health insurers and providers worldwide.

Give a brief overview of Millimans offerings in the health insurance domain.

Milliman offers a wide range of actuarial and clinical services and products to general and health insur-ance companies in India. Our actuarial services include portfolio analysis, product design and pricing, IBNR review, market entry and strategy consulting. The clinical team produces various tools such as claim processing guidelines, underwriting guidelines and an underwriting management system, health risk assessment tool and treatment protocols. Our IT team focuses on data warehousing, analytics and in integrating our guidelines into third party IT platforms. We occasionally create multi-disciplinary teams to undertake operational reviews of specific functions at insurers or to do comprehensive reviews across all departments. We also help in health insurance reforms; currently we are working on govern-ment run health insurance programme in an African country to help them revise their mechanism for provider reimbursement.

How have you seen the advancement in the field of health insurance in India over last decade?

The growth in terms of lives covered and premiums is significant. The growth trend is likely to continue for the next few years. The advent of various social health insurance schemes in the past 3-4 years has opened up a significant new market segment. The big story recently from the insurers perspective is the reduction of group benefits, especially for parental coverage or hardening of group rates if benefits are generous and there is growth in the retail segment. Unfortunately product innovation is still limited but as consumers become more familiar with health insurance, they will demand differentiation in products to suit their specific needs and that will fuel the next wave of growth.

What is your perspective on the role of IT in health insurance?

In-patient health insurance is not transaction heavy and insurers and TPAs have managed with rudimentary systems. Expansion of benefits, especially the advent of new benefits such as OPD coverage will significantly increase transaction volumes and the insurers and TPAs will need better technology to both service these volumes and reduce transaction costs. In addition, insurers will start to build in more intelligence into systems to streamline and standardise core operations such as underwriting and claim processing. The other major growth area will be data warehousing as health insurance will generate large volumes of data. Distribution analysis and planning as well as product design and pricing are dependent on easy access to data.

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