In a compelling case for universal health coverage, the World Bank argues that it “allows countries to make the most of their strongest asset: Human capital.” This idea has very real relevance for India, which will have the world’s largest workforce by 2027. To harness our demographic dividend for economic growth, we need a healthy workforce. It follows that all Indians must have access to the health services they need, without impact to their productivity or a crippling financial burden.
To that end, 2018 was a pivotal year for health insurance in India. Ayushman Bharat, the world’s largest public health insurance scheme, will benefit an unprecedented 500 million Indians. With forward-looking regulation, The Insurance Regulatory and Development Authority of India (IRDAI) paved the way for greater inclusion, bringing treatment of HIV and mental illnesses within the ambit of health insurance. Going into 2019, these measures and other emerging trends will unlock value for millions of customers, while simultaneously increasing penetration of health insurance in the country. A look at the shifts I see panning out in 2019.
Increasing inclusion with customer-focused regulation
Customers have often complained about the complex terminology in health insurance policies. That is set to change in 2019. An IRDAI working group has made significant recommendations on standardisation of exclusions in health insurance. A proposed change is to limit the number of illnesses and diseases that remain outside the ambit of insurance coverage. As per another key recommendation, after 8 years insurers will not be able to deny a claim based on non-disclosures at the time of taking the policy, thus protecting the interests of customers. Standardisation of exclusions would benefit customers on many levels. It would regulate insurance contracts through uniformity in policy wordings, minimising differences across products and insurers. It would lead to more comprehensive products. Most importantly, it would improve the customer experience, with policies that are unambiguous and simple to understand.
Through 2018 the IRDAI stepped up efforts to bring greater inclusivity and make health insurance more comprehensive. The impact will follow in 2019, as insurers solve challenges to implementation. For instance, while data is available on the mortality rate of HIV in India, it is inadequate on morbidity, making it challenging to set premiums. While insurers might initially introduce supplementary coverage for HIV and mental illnesses, stand-alone products will emerge with experience over a longer period of time.
Towards a tech-powered value proposition
Wearable tech and the Internet of Things (IoT) are poised to upend health insurance in India. Wearables can capture data that lead to actionable insights – from monitoring the heart rate to tracking blood pressure and sugar levels. Within the ambit of data privacy guidelines, insurers would be able to leverage insights to develop products that are tailor made for the customer. This could be based on age, geography, current health condition, family history and exercise regimen, among other factors. Since insurers would know the risks associated with a customer’s lifestyle, they would be able to design coverage best suited to that customer’s needs, at an appropriate price. Beyond being built into the product, wearables and IoT will also have applications at the onboarding stage. Monitoring a customer’s blood glucose while underwriting the risk, would guide an insurer to offer a diabetes product that is customized and priced fairly for that customer. I also see wearables powering the growing shift from reactive to preventive care, as customers proactively look to stave off chronic illnesses.
Insurers will increasingly leverage technology in the near future, to create products that are specific in nature. This could be at a disease level, that is, products meant for cancer, cardiac ailments, diabetics, or customised for particular customer segments – like products that reward customers for a healthier lifestyle. The IRDAI recently announced its “regulatory sandbox approach” towards fintech innovations, geared at bringing greater efficiency, managing risks better and enhancing value for customers. This will further encourage break-out thinking within the industry.
Delivering value and convenience with service to match
As customer expectations evolve, the breadth of expenses covered – from OPD to diagnostics, pharmacy and preventive health check-ups – will expand far beyond hospitalisation. While creating GoActive, which focuses on everyday health and fitness, our research revealed that customers wanted everyday convenience baked into the product. They asked for overall expenses towards healthcare – 65 per cent of expenses are typically out of pocket – to be taken care of by insurance. Insurers are accordingly developing new models and ecosystems – driven by technology and data analytics — to cover a broader spectrum of expenses that deliver this convenience.
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Customers want insurers to simplify the healthcare journey for them, and this will guide the direction of products in 2019. The growing breed of tech-savvy Indians put a premium on their time and want regular health activities such as scheduling doctor's appointments or personalized health coaching to all be available on the go! In a six city survey we conducted, more than a third of potential buyers said they were willing to download a health insurance app. Based on customer insights our health app built in real-time appointments with doctors, payment on a cashless basis, and online ordering of medicines – all in one place, accessible on the go and with just one click.
The health insurance industry grew by 40 per cent this year. This growth was largely driven by the launch of Ayushman Bharat, which has contributed hugely to the rising awareness about health insurance. Inclusive regulation will further level the playing field, bringing health insurance to many more Indians. Insurers now have newer opportunities to expand their services by offering customers tremendous value, convenience and differentiated services, wrapped in a personalised experience. In this new landscape, I see the role of the insurer transforming from facilitator and provider to partner, for a new generation of customers.
The writer is MD & CEO, Max Bupa Health Insurance