Digital health plan may make insurance products cheaper: Irdai member

Health insurance products calculated based on historical data will get better information, says T L Alamelu

The National Digital Health Mission — which aims to create digital health profiles of citizens — will not only be a boon for policyholders but also prove to be equally beneficial for insurers in better pricing of products. Chances are that prices of health insurance products could come down, after the adoption of the mission.

In an address during Assocham’s National E-Summit on Health Insurance, T L Alamelu, member non-life, Insurance Regulatory and Development Authority (Irdai), said, “The government has recently announced the National Digital Health Mission and the insurers need to take advantage of this. They must encourage people to share health records on this platform.”

Currently, the pricing of health insurance products is done mainly on past experiences. All actuarial calculations are based on historical data. And, insurers do not always have all the data readily available while pricing products. This often leads to higher loss ratios for insurers. 

Most insurers in the general insurance space are struggling to make underwriting profits, mainly due to pricing issues.

Alamelu also said that due to the ongoing pandemic, the share of health insurance business in the Indian market has grown from 27 per cent to 30 per cent in a very short period, that is, between March and July. 

Irdai is also looking at mainstreaming the dedicated Covid-19 policies such as Corona Kavach, as the virus is showing no signs of receding.

Alamelu said, mostly consumers have opted to buy the policy for the nine-and-a-half-month period, indicating the fact that policyholders think the virus will not go away quickly.