India’s mounting population, rising income, drastically altering lifestyles, better awareness of personal health and hygiene and easier access to healthcare facilities, has been attributing to perpetual growth of India’s healthcare sector. On the flip side, this growth also results in increased healthcare expenses as Indians are currently spending about USD 90 billion on healthcare, that too mostly out of their own pockets. In this scenario, the benefits of owning health insurance cannot be understated as it is an indispensable financial tool that helps one avail quality healthcare. With some great innovations, use of technology to enhance customer experience, growing acceptance and recent economic changes, health insurance industry is set to witness a huge upheaval in 2017. Here’s why -
1. Demonetization to strengthen the investment sentiment
With India reeling under the grip of demonetization, the move is expected to help raise awareness of health insurance amongst those who were unaware or wary of health insurance as a financing tool and considered paying healthcare expenses only through out of their own pockets. We hope to see health insurance play a larger role in one’s financial plans in the coming years, in order to reduce their burden on out-of-pocket expenses and also save taxes under section 80D of Income Tax Act. The govt raised tax rebate ceiling under section 80D to promote acceptance of health insurance as a financial tool which largely remains underutilised. We are expecting to see a large number of people taking interest in buying health insurance from financial planning as well as tax planning perspectives.
2.Cashless is the future
Due to the low liquidity of cash in the market, we expect to see an increase in the number of health insurance policyholders using cashless services rather than claiming for reimbursement. This potential rise in cashless treatments will also aid insurers to work with healthcare providers to develop and offer sound and affordable pricing treatment protocols at quality healthcare sites for the benefit of consumers as a whole.
3.Insurers are Technology Ready
Insurers will continue to adapt technology to create innovative and user-friendly technology platforms to increase the engagement with customers, empower them to manage their policies on a click, reduce service turnaround time etc. that will help insurers enhance the overall customer experience.
Further, adoption of technology will also help the health insurance industry to go ‘green’ as the need for paper will be eventually eliminated and replaced with technology for processes such as sales, issuance and servicing of insurance policies. E-transactions are more transparent, accurate, quicker and uncomplicated than paper based functionalities. Going digital will empower advisors to issue policies on real time basis, while also increasing their reach.
4.Universal Health Insurance
India is on an economic growth path and any developing country should be able to provide basic healthcare access to its citizens to ensure contribution from a healthy population. Amongst many other progressive initiatives, the launch of a universal health insurance scheme is expected to take place in 2017. Insurers are anticipating the execution of universal health insurance and are looking forward to actively participate in a movement that aims at ensuring all citizens of the country are covered under one universal health insurance scheme. This will result in a knee-jerk boost in terms of penetration as people who have not bought health insurance will be interested to invest order to avail quality healthcare for themselves and their families.
5.More Emphasis on Wellness Services
While our lives are stressful with our careers on top gear, health often takes a backseat and an ideal health insurance plan should not only provide financial support in times of medical adversities but also partner with customers to help them lead a healthier life. Of late insurers have started offering comprehensive policies with inbuilt wellness features and incentivising customers for staying healthy. This trend is expected to continue in 2017, wherein insurers will take an innovative approach to their customers’ health by integrating a broad spectrum of services that address the wellness of body, mind and spirit.
The insurance industry is on an innovation drive to address diverse and changing needs of the customers. Insurers are working towards developing more innovative products that cater to the primary and tertiary healthcare financing needs of people. There will be product innovation around high frequency-low ticket products for small illnesses and low-frequency-high impact comprehensive products for terminal illnesses. Customized products, disease-specific products, micro-insurance products and life-stage products are also on the anvil.
New technologies such as wearable, implanted sensors and algorithms using artificial intelligence will change the status quo and insurance companies will certainly try to implement these into practice.
Today’s ever-accelerating technology changes make data related to healthcare, medical and financial issues even more attractive (and profitable) to cyber criminals who sell medical identities and siphon money from stolen financial records. Risks are exponentially increased because of organization's reliance on electronic systems for mission-critical functions. Thus, insurers are working towards addressing data security concerns for its customers.
Cybersecurity, data management and e-repository to distribute e-policies in order to go paperless are concerns that even the insurance regulator has given a voice to in recent times. We expect to see more regulations from the IRDAI in order to secure stricter data confidentiality.