Amit Bhandari, Vice President, Health Underwriting and Claims, ICICI Lombard, talks about the growth in health insurance sector and the need for regulating health providers. In conversation with Nikita Narvekar, Elets News Network (ENN)
Given the current situations, what are the opportunities in the health insurance sector?
In spite of recession, the healthcare sector has continued to grow. The lifestyle is changing and so there are lifestyle related diseases. Also, there is a higher disposable income, so people today want to go to good hospitals in search of quality treatment.
The population is ageing and also the life expectancy is increasing leading to a rise in the senior citizen pop- ulation. So on account of this, health insurance has continued to grow even in recessionary times.
Thirdly, the cost of treatment is also increasing. Hence, people want to be sure that they are insured; hence we are seeing more than 20 percent growth in the retail health insurance sector.
We are seeing a trend where the onset of disease has started happening even for people who are in their 30s and 40s. This is the reason that people are buying health insurance and this will continue to grow.
The other factor is the increasing focus of the government on this sec- tor. The previous government also talked about bottom of the pyramid populations health insurance and this government is also keen on providing universal health care coverage to the entire population.
The government is also spend- ing money in this sector and they are looking at the insurance sector as a route to provide healthcare to people.
What are the challenges that you face in the health insurance industry?
It is a challenging business and each stake holder has huge expectations. The biggest challenge would be the distribution. Few years back, awareness could have been a big challenge But today people are aware that there is a need for health insurance.
In spite of that, people who develop disease conditions like hypertension and diabetes only look for insurance, but the younger population is not looking at the option. A person who starts working, say at the age of 22, will want to buy a car or a house but not insurance.
Once the priority list is fulfilled, the person is already above 30 and his health also starts deteriorating, then he starts thinking about health insurance.
But things are changing now, young people are suffering from diseases and hence there is an increasing awareness. Yet people are not buying insurance and hence distribu- tion has to reach that level.
From the insurance perspective, we do not have data on morbidity. That is the second challenge. The third is the regulation on the health care provider industry is missing.
There is no standard guideline for treatment. The government is working on this and hopefully that should be implemented.
Health is a state subject. As an insurer we are not able to get one view of the providers across the country. There has to be some registry which will solve one of the challenges.
What other steps can be taken to boost the health insurance sector?
There are various stakeholders in the Health insurance sector- customer, provider, government and the insurer. The government is very clear on their front. The insurer can come up with new products which are simple and transparent products covering entire continuum of health right from primary to secondary to tertiary care. This will help the buyers opt in for insurance.
Insurers have to be involved with the customer right from the beginning, not only intervene when the customer is sick but also help prevent him from falling sick. All the stakeholders have to play their indi- vidual parts.
How do you look at the idea of foreign participation in the health insurance sector?
Health insurance is not lacking capital. The area where we are lacking as country is the expertise that a foreign player brings. Foreign participation will help only in bringing the strategic expertise in the sector.
What are the features that one should look at while deciding on medical insurance?
There are three things that an insurance buyer has to keep in mindthe product features, the suitability of the product for the family and the claim settlement process including the turnaround time for the claims.
The product feature involves everything what suits the customer and also what suits his family requirement. The buyer should look at the things that are covered in the product, suitability of the product for his family, the kind of hospitals he goes to for treatment.
Insurance now offers various products for various strata of customers. So a person should opt for a product that suits him.
that suits him. The good part today is that the regulator publishes the claim settlement ratios and other things very often. So a buyer only has to look at it and opt for the company that he wants to go for.
After looking at all this, he should have a look at the premium also.
“IRDA regulates the entire insurance sector, but there is no single regulatory body for the providers. So the government has to look into this as well”
Many a times the policy buyers are misled. What safeguards do you think can be put to prevent mis-selling?
The biggest disconnect that we observe is that people do not declare their pre-existing conditions, biggest examples being hypertension and diabetes. People believe that these are lifestyle problems, but this is the biggest misconception. For an insurer these are material non disclosure issues.
The second problem is disconnect between what the customer declares to the advisor and what is further disclosed to the insurer. Many times there is a miscommunication between the buyer, advisor and the company. So this can be avoided once the buyer checks the policy.
The health regulation effective from October 1, 2013 provides a free look period of 15 days. So the customer can return the policy within 15 day, if he is not satisfied with it and the company has to return the entire money.
What changes do you think need to be made when it comes to the regulation of the health insurance industry?
If we look at the new regulations effective from October 2013, there are many positives that the regulator has taken into account from the customers point of view. So, no insurer cannot deny renewal of policy due to a claim in the policy. They are bound to give lifetime renewal guarantee to the customer.
We would still like the regulator to do things. Since there is no provider regulator, the insurance regulator can create a registry. If a hospital indulges in malpractice, the industry can ban that hospital. This will minimize fraud at hospital level.
Is there any product that you have launched recently?
We launched a product a year and half ago, which says ICICI Lombard Complete Health Insurance. It is applicable for any strata of the society, where the buyer can look for things he wants and we are receiving tremendous re- sponse for the same.