While India's healthcare sector remains a key sector for development; health insurance remains underpenetrated and expensive in the eyes of consumers, according to a joint study conducted by FICCI and EY.
Health Insurance is a key pillar; not just for a family's physical health, but also for their financial well-being. It enables access to appropriate health care while reducing the impact of an untoward health event on a family's earning and payment capacity.
Insurers have been working tirelessly to expand coverage and distribution, leveraging newer distribution models and technology to reduce the cost of acquisition and consequently bring down the cost of cover for consumers. This is in addition to several government initiatives and the work that the regulator is doing to enhance awareness, as well as quality of service to consumers.
To this regard, a report titled "Distribution 2.0 - Improving Distribution in Health Insurance" released by T S Vijayan, Chairman, IRDAI at FICCI's 10th Annual Health Insurance Conference provides key insights and recommendations designed to enhance the distribution (and acceptance) of health insurance.
Despite the effort put into date, there is still a significant opportunity to expand distribution, while reducing the cost of customer acquisition and servicing. This paper aims to address the same.
"India stands apart from most other countries on account of its diversity, across practically every parameter, whether it is age, socio-economic distribution, education levels, financial literacy, wellness, geographical spread or even growth rates across different parts of the country.
This only makes it more challenging for the insurance industry to ensure that appropriate products and distribution systems are in place to cater to each customer's need," said Sandeep Patel, Co-Chair, FICCI Health Insurance Committee and CEO and Managing Director Cigna TTK Health Insurance.
"On its part, the health insurance industry has been leveraging the new channels to expand outreach and reduce the cost of selling. However, the acceptance of health insurance remains low. The need of the hour is to address the underlying reasons which drive purchasing behaviour. This paper attempts to identify the key drivers and inhibitors of health insurance purchase and lays out recommendations that will help improve acceptance, and penetration of health insurance," he added.