Wednesday, November 08, 2006

Why health insurance is a major opportunity in India today !

Why health insurance is a major opportunity in India today ! " Historically, the public sector companies have also not paid attention to developing proper underwriting criteria and they are not required to declare the operating results of this product line separately. Despite years of experience, they have not built proper databases and do not carry out systematic analysis of amongst other things, disease patterns, regional variations, age-related healthcare spending and/or claim distribution costs. The health portfolio that had a loss ratio of about 78 per cent in 2003 deteriorated to 98 per cent in the following year. These deteriorating loss ratios, as well as the competition from new private players, are pressuring these companies to more actively manage their portfolios.

Since public sector insurance firms regard health insurance as a loss leader to gain footholds in other more profitable lines, they have also not invested adequately in their customer service proposition. An indication of the low level of satisfaction is the large number of complaints from customers. According to figures published by the 12 Insurance Ombudsmen in the country, 70 per cent of customer complaints relate to health insurance, the most common point of contention being clauses related to ‘pre-existing illnesses’.

The introduction of new private general insurance companies is, however, beginning to make some difference. Five of the new private non-life insurance companies sell stand-alone health insurance products. These new companies have introduced a few innovations, such as direct tie-ups with healthcare providers, providing ‘cashless’ settlement as an option, the provision of pre- and post-hospitalisation benefits and coverage for pre-existing illnesses."

It's potentially a huge market, which has suffered from benign neglect. It's going to grow exponentially, as the Indian consumer earns more money and the population grows older.

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