Challenges faced by Health Insurance industry in India and some suggestions to overcome these challenges. with conceptual clarity about health insurance sector.

1. Challenges in The Indian Health
Insurance Industry

2. Introduction
• The Indian health insurance industry no doubt is a second biggest
contributor in the total premium of general insurance companies.
• It is growing at CompoundAnnual Growth Rate of 16.65% over F.Y 2012-
2018(IBEF Report Jan.2019).
• And this growth is expected to continue as population, medical inflation
and graph of lifestyle disease are increasing day by day. But if we talk about
overall coverage of health insurance then there is less than 15% of Indian
population who has some form of health insurance. Here it has been tried to
find out the responsible factors for lower penetration of health insurance in
India.

3. Health Insurance
The term ‘Health Insurance’ relates to a type of insurance that essentially covers your
medical expenses. A health insurance policy like other policies is a contract between
an insurer and an individual / group in which the insurer agrees to provide specified
health insurance cover at a particular “premium” subject to terms and conditions
specified in the policy.
A health insurance programme usually has two main functions:
To increase access to healthcare
To protect households from high medical expenses at the time of illness

4. Different Kind of Health Insurance
• Individual Mediclaim Policy
• Floater Policy
• Critical Illness Policy
• Overseas Mediclaim Policy
• Student Medical Insurance

5. Benefits of Health Insurance
• Medical Cash Benefits
• Cash-Less Facility
• Before and After Expenses
• Floater Benefits
• No Claim Bonus
• Tax Benefits(80 D)

6. Indian Insurance in Global Scenario
• India’s share in global insurance market 2.0% (2017)
• Total insurance premium in India increased by 10.1%YoY
• Global insurance premium increased by 1.5%YoY
• Shares of
(In India)- Life 74.73%
Non-Life 25.27%

7. • Non-Life insurance sector
Growth 16.7%YoY
Global Growth 2.8%YoY
• Share of Indian non-life insurance premium in global non-life insurance premium
1.11%
• India ranked 15th in global non-life insurance market

8. Insurance Penetration And Density in
India

9. Year Life Non-Life Industry
Density
(USD)
Penetration
(%)
Density
(USD)
Penetration
(%)
Density
(USD)
Penetration
(%)
2011 49.0 3.40 10.0 0.70 59.0 4.10
2012 42.7 3.17 10.5 0.78 53.2 3.96
2013 41.0 3.10 11.0 0.80 52.0 3.90
2014 44.0 2.60 11.0 0.70 55.0 3.30
2015 43.2 2.72 11.5 0.72 54.7 3.44
2016 46.5 2.72 13.2 0.77 59.7 3.49
2017 55.0 2.76 18.0 0.93 73.0 3.69

10. 0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
2011 2012 2013 2014 2015 2016 2017
Insurance Penetration in India
Life Non-Life Industry

11. 0
10
20
30
40
50
60
70
80
2011 2012 2013 2014 2015 2016 2017
Insurance Density in India
Life Non-Life Industry

12. Share in Non-Life Insurance Market
(IBEF Report Jan. 2019)
Share in Non-Life Insurance Market
Health 25.70%
Motor 38.20%
Fire 6.90%
Marine 2.00%
Others 27.20%
26%
38%
7%
2%
27%
Share in Non-Life Insurance Market
Health
Motor
Fire
Marine
Others

13. Registered Insurers in India
(up to Mar.18)
68
Insurers
6
Standalone
Health
Insurers
24
Life
Insurers
11
Re-insurers
27
General
Insurers

14. General Insurance
2016-17 2017-18
Total Direct Premium
(General Insurance including standalone HI)
₹ 1,28,128 Cr. ₹ 1,50,662 Cr.
Growth Rate- 32.94% 17.59%
Public 26.27% 12.58%
Private 35.55% 21.59%
Standalone HI 41.06% 41.93%
Specialized Insurers 70.33% 10.75%

15. Private Sector General Insurance Company
2016-17 2017-18 Increase
Or
Decrease
1st Largest
ICICI Lombard
(Market Share)
8.37% 8.20% Decrease
2nd Largest
Bajaj Allianz
(Market Share)
5.96% 6.27% Increase
20 Private Sector Insurers
And
6 Standalone Insurers
( Premium Underwritten)
Increase

16. Public Sector General Insurance Company
All 4 co.’s expanded their business with an increase in respective premium
collection
Market Share 2016-17 2017-18
New India 14.92% 15.08%
United India Insurance 12.54% 11.57%
National 11.11% 10.75%
Oriental 8.43% 7.60%

17. Trend in Health Insurance Premium
(₹ Crore)
Sectors 2016-17 2017-18
Public Sector GI 19,227
(63%)
21,509
(58%)
Private Sector GI 5,632
(19%)
7,689
(21%)
Stand-alone HI 5,532
(18%)
7,831
(21%)
IndustryTotal 30,392 37,029
Annual Growth Rate
(in %)
24% 22%

18. Classification of Health Insurance Premium
(₹ Crore)
Class of Business 2016-17 2017-18
Govt. Business 3,090
(10%)
3,981
(11%)
Group Business
(Excl. Govt. Business)
14,718
(48%)
17,757
(48%)
Individual Business 12,584
(41%)
15,291
(41%)
GrandTotal 30,392 37,029

19. Number of polices issued and number of lives covered under Health
Insurance Business-
During 2017-18-
• In terms of number of lives covered, 3/4th of the lives covered under Govt. Sponsored
Health Ins. Schemes and balanced 1/4th were covered by group and individual policies
issued by General and Health Insurers.
Policies Issues 1.47 Cr.
Lives Covered 48.20 Cr.
Registered a Growth
(in no. of lives covered over the P.Y.)
10%

20. No. of Persons Covered Under Health Insurance
(in Lakh)
Class of Business 2016-17 2017-18
Govt. Business 3,350
(77%)
3,593
(75%)
Group Business
(Excl. Govt. Business)
705
(16%)
894
(19%)
Individual Business 320
(7%)
333
(6%)
GrandTotal 4,375 4,820

21. Trends in Net Incurred Claim Ratio (ICR) under Health Insurance Business-
There is an improvement in Net ICR during FY 2017-18 when compared to previous FY 2016-
17.This is observed in all three classes of business.The Net ICR of Group Business (Excl. Govt.
Business) improved from 125% in 2016-17 to 107% in 2017-18.
In terms of sector wise Net ICR, it has been observed that there is improvement in net ICR
reported under Public Sector Insurer which improved from 122% in 2016-17 to 108% in 2017-18.

22. Class of BusinessWise
Net ICR Under Health Insurance
(in percentage)
Class of Business 2016-17 2017-18
Govt. Business 122 115
Group Business
(Excl. Govt. Business)
125 107
Individual Business 76 71
GrandTotal 106 94

23. SectorWise
Net ICR Under Health Insurance
(in percentage)
Sector 2016-17 2017-18
Public Sector GI 122 108
Private Sector GI 84 80
Stand-alone Health Insurers 58 62
Industry Average 106 94

24. How to Choose the Right Health Insurance Policy
See what kind of health cover is required
See which indemnity cover suits you
Estimate how much of cover is required
Check sub-limit in the plan
See from when pre-existing ailments are covered
Check for co-payment feature
Compare various policies and have a close look at the inclusion and
exclusions

25. StateWise
Distribution of Health Insurance Business
State % Sh. In All India
Premium
Maharashtra 32
Tamil Nadu 12
Karnataka 10
Delhi 8
Gujrat 6
Rest of India
(Rest 31 States)
32
32%
12%
10%8%
6%
32%
% Share in All India Premium
Maharashtra
Tamil Nadu
Karnataka
Delhi
Gujrat
Rest of India

26. Claim Settlement
During 2017-18(IRDAI Report)
Settled Health Insurance Claims 1.45 Cr.
Total Amount Paid ₹ 30,244Cr.
Average Amount Paid Per Claim ₹ 20,793
SettledThrough-
TPAs 71%
In House Mechanism 29%

27. Mode of Settlement of Claims
Cashless Mode 49%
Reimbursement Mode 44%
Cashless + Reimbursement 6%
Claims
Settled 85%
Repudiated 7%
Pending for Settlement
(as on 31.03.18)
8%
100%

28. Distribution Channels
Channel Wise Distribution of HI Premium
Individual Agents 30%
Direct Sales 29%
Brokers 25%
Bankassurance 8%
Online-Sales 1%
33%
31%
27%
9%
Channel Wise Distribution of HI
Premium
Individual Agents
Direct Sales
Brokers
Bankassurance
Online-Sales

29. Weakness of Indian Health Insurance Sector
• Inadequate healthcare infrastructure
• Limited Reach
• Insufficient data on Indian consumers and disease patterns resulting in
difficulty in product development and pricing

30. Challenges of Indian Health Insurance Industry
• Lack of education on the concept of Health Insurance
• Low level of awareness
• Wrong mentality of people and policyholders
• Problem in product innovation due to lack of data and information
• High claim ratio
• Efficient services delivery

31. • Under Prize the product
• Absence of branches of insurers in rural area
• Problems with distribution channels
• Fraudulent Claim
• Problems withTPA
• Challenges related to hospitals
• Limited Access to Health Care facility especially in rural areas

32. How to Overcome these Challenges
• Create awareness about Health Insurance
• Required to expand the reach of health insurance companies rural area
• Periodically review the services provided to the client
• Conduct the market survey
• Develop a system to find out fraudulent claims

33. Thank You…!!!
Presented By-
Pratiksha Kolambkar