Indian Health Insurance- Finally Progressing??

New Courtesy:

India’s fast growing demand for affordable health cover is attracting greater business attention, with both life and non-life insurance companies now entering the market with innovative new protection and savings medical insurance products. This intense competition for health insurance customers has only intensified in recent months, with the introduction of new savings-linked and investment-oriented health insurance schemes by some of the country’s largest insurance groups.

India’s insurance sector first opened up to private and international investors in 2001. Over the past ten years coverage rates across the populous South Asian country have doubled and the domestic insurance industry has overtaken several more developed financial markets in the process. The overall number of insurance policies sold has increased several times over, and combined premium income is now projected to reach between US$350 to US$400 billion by 2020. Health insurance, in particular, has become as one of the country’s fastest growing insurance lines, accounting for almost a third of new written premiums last year. Sales of medical insurance products have been driven by three key factors: a low penetration rate of about 5 percent at present, surging treatment costs, and a lack of other social safety options across most of India. With total expenditure on healthcare, through both Indian government schemes and private sector activity, expected to exceed US$200 billion by 2015, even more significant opportunities for the country’s health insurance sector will likely emerge. Over the next three years, health insurance has the potential to become an INR300 billion market (US$6 billion), according to industry observers.

The introduction and increased proliferation of private sector players in India’s health insurance sector has worked to both develop innovative new coverage products and increase service standards for clients in the domestic market. Of particular note has been how the entrance of several major life insurance brands, including Life Insurance Corporation of India, Aviva Life Insurance and Max Life Insurance, has affected the market recently. These life insurers offer largely savings-based health plans that provide lump sum compensation to clients in case of a critical illness or other malady specifically defined by a specific policy. These long-term products have tenures that can last up to 20 years. When the policy expires, customers are entitled to receive the fund value. Normally this is not a cashless process as payment is reimbursed on submission of medical bills. Most of these health insurance plans sold by life insurance companies are unit-linked insurance products (Ulips), whereby returns are determined by the performance of the stock market.

While life insurer health plans are tied to equity returns, medical insurance policies sold through non-life companies tend to provide cashless hospitalization cover for policyholders in the event of an illness or accident. These plans, with premiums reviewed and renewed annually, also offer customers a variety of additional value-added benefits such as hospital cash allowance, home nursing allowance and recovery grants. Some insurance companies offer these outpatient services as add-on covers with their hospitalization plans, while others provide discounts through certain affiliated hospital networks. These products have so far proven to be the most popular in India. Health insurance policies sold through non-life and dedicated medical insurers currently dominate the market, accounting for roughly INR100-120 billion (US$1.9-2.3billion) of the country’s INR150 billion (US$3 billion) health insurance sector. It is expected that increased intra-market competition going forward will enable successful insurers to meet the country’s changing healthcare needs.

Despite the positive growth indicators, India’s health insurance market still has many problems to contend with in order to match its true potential going forward. The most important challenge for insurers remains the low level of awareness concerning the value of obtaining adequate coverage as a valuable savings and investment tool across much of the country. This problem is slowly being addressed as more insurers develop their product and distribution platforms to reach previously untapped regions and client bases with more innovative and affordable coverage products, including microinsurance and local bank and government tie-ins.

Of the Indian consumers already aware and enrolled in health insurance schemes, the industry faces the continuing challenge of keeping them happy. Customer satisfaction levels for health insurance in India have consistently ranked below comparable levels elsewhere, with critics frequently citing the low coverage of plans in terms of both the diseases and number of hospitals covered. Unlike other homogenous general insurance products, premiums for medical plans are based on the health of an individual policyholder and this had lead to confusion and fraud in the Indian market and increased policy cancellations from customers who do not find any value in their health insurance policies.

The Insurance Regulatory Authority of India (IRDA) has come to the forefront in tackling these service standard issues recently. Speaking at the first meeting of the India Health Insurance Forum in Hyderabad last Thursday, IRDA chairman J Harinarayan said the industry must now work to improve communication with its customers, particularly with regard to health insurance policy documentation, as a third of all consumer complaints this year have been directed towards health insurers. According to IRDA data, of the 92,898 complaints levied at the non-life sector so far in 2012, 38,891, or 37.5 percent have been focused on health insurance issues. “If one-third of complaints are from the health side, I will conclude that the nature of communication on health insurance policies and the understanding of the policy by the consumer are areas of concern. Probably, the lack of clarity is reflected in the increasing number of complaints,” IRDA chairman J Harinarayan said, adding that “good communication is the responsibility of the insurance company and not of the policy holder. An insurance policy, as a contingent contract, has to be specific and unambiguous.”

Its Official..23% – 2012 …

News Courtesy: Economic Times, India

KOLKATA: The 24 general insurers have collective clocked a premium income growth of 23.16% during the year ended March 2012. The private companies have managed a 25% growth while the four public sector companies have registered a 22% growth in premium income.

The industry as a whole clocked a total premium income of Rs 58344.16 crore during the period, against Rs 47373 crore in the previous period. The figure for the public sector companies taken together was Rs 34114 crore during FY12 against Rs 27991 crore in FY11.

The private companies collectively clocked a total premium income of Rs 24230 crore during the year ended March 2012 against Rs 19382 crore in the previous financial.

Health insurers – Start Health & Allied Insurance, was the only company that saw a fall in premium income during the period. The company witnessed a near 7% fall in premium income during the period.

The highest growth in premium income was registered by L&T General Insurance. The company saw premium income grow 7 times mainly because it is a relatively new company and its base was small.

Its premium during the previous financial was Rs 17 crore which touched 143 crore during the period under review.

New India insurance remained the largest insurer with a total premium income of Rs 8536 crore during the period. This was a 20% growth over the previous fiscal when the company earned a premium of Rs 7097 crore.

ICICI Lombard remained the largest insurers in the private sector with a 21% growth and a Rs 5150 crore of premium income.


Religare Health on its way…

News Courtesy: Financial Express

Mumbai: Healthcare and financial services major Religare Enterprises today said its health insurance company has received R2 license from the Insurance Regulatory Development Authority.

“We are pleased to move a step closer to launching our operations, and are in a complete state of preparedness for the same,” Religare Health Insurance Managing Director and Chief Executive Officer Anuj Gulati said in a statement.

Religare Health Insurance is a joint venture between Religare Enterprises, Union Bank of India and Corporation Bank.

Religare is present in the life insurance segment and has a partnership with Dutch insurer Aegon.

The Delhi-based firm will be the fourth standalone health insurance firm.


Something we’ve been vocal about to youngsters -“Our Industry Needs You”

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The UK insurance industry is finding new ways of promoting itself to attract young talent

Talent takes centre stage in 2012 at the Chartered Insurance Institute (CII) as it celebrates the centenary of its Royal Charter. As part of the celebrations the Institute has set out a number of key objectives that it hopes will help nurture the next generation of insurance talent.

CII president Julian James – one-time Director of World Markets at Lloyd’s who still sits on the board of the Lloyd’s Community Programme – based his manifesto for 2012 on recruitment because he believes that the insurance sector could do better at bringing talented young people into the industry.

Widening the talent pool
“We’ve got to recognise that we have a problem with the lack of talent in our world. It’s only once you understand that you have a problem that you are able to overcome it. We are dependent on too narrow a base of people,” James told

Citing a recent survey from consultants PwC that shows that nearly 60% of insurance CEOs see a shortage of skills as a significant threat to growth, James urged the London market insurers to get to grips with the recruitment challenge.

James, who is also Chief Executive of Lockton in London, believes that the insurance industry must get better at promoting itself and improving its image among young people shopping for careers. “I know for a fact that the insurance business offers rich rewards, not purely in material terms, but also as a way to travel and meet a wide array of people from all backgrounds and yes, to benefit businesses and wider society as a whole,” he says.

Young people have to step up to the job, however, James believes. “Although we need to encourage insurers to do all they can to recruit and attract talented young people, we must also recognise that 50% of employers do not think the UK education system meets the needs of the sector, and that basic communication and writing skills are needed,” he adds.

“Vitally, the CII is increasingly providing its members with the tools they need to do their job to the world-class standards that will be required, as global competition and emerging markets – and talent – increase their skills base and show what they can do for clients.”

Campaign to create positions
The CII recently launched its Discover Risk campaign aimed at creating positions in general insurance for school leavers and graduates. Among its objectives this centenary year is to advertise 100 graduate and school leaver positions on the Discover Risk website (, make available 100 summer placement positions and produce 100 apprentices from London.

The Discover Risk website registered its 100,000th site visitor this month since its launch in 2010 and James expects it to deliver 100 school events this year, “which is an important aspect of promoting the campaign to those considering their post-A level options”. The most popular form of employer support is a profile on the Discover Risk website, followed by case studies and supporting local events.

The Discover Risk campaign has support from across the UK insurance profession, but London companies could do better, he thinks. “There are more than 100 campaign supporters, although the London Market is relatively under-represented,” he says. “London Market employers tend more than others to use existing family and friend networks to fill placements so are not using the campaign to fill these placements.”

Challenging perceptions
The CII is also working to improve the diversity of the insurance industry and change the perception that it is a white, middle class career option only.

“At the CII we are taking every step to combat that perception of the industry, and the sector as a whole has become more and more diverse over the years. But more needs to be done,” he says.

The CII’s Diversity Action Group was set up to deal with this issue directly, and lobbies on behalf of the organisation to encourage diversity within the insurance and financial services sectors. The Group not only functions within the CII, but also communicates diversity policy to its members, to influence their decisions too.

“Moreover, through the work we and our members carry out with schools and universities, we have been able to reach young people of very diverse backgrounds, and hopefully encouraged them into careers in insurance,” James says.


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