September 03, 2008

Insurers see retail health plans as next big thing

Managed healthcare may still be a far cry, although health insurance premium has swelled to around Rs 5,000 crore.

Health claims can be denied

Insurance biggies are now betting on big retail business in health, with the large private players coming up with new plans and innovative distribution channels to tap this promising segment.

Being in the state of good health

With medical inflation estimated to be around 15-17%, the awareness needs to be built up urgently is the common refrain. The scope of the health care market is said to be around Rs 60,000 crore but the share of insurance is at present less than 1%.

Developing healthy contempt is a must

Moreover, over 80% of the market is indemnity driven and is largely covered by mediclaim.

New business premium from health plans offered by life companies is still small at less than

Rs 100 crore and has a long way to go said life insurance officials. Out of the total premium garnered at present, retail is just about a share of 50% while the balance is from group plans.

Binay Agarwala, senior vice-president, health business and corporate strategy, ICICI Prudential Life, told DNA Money, “We feel that life companies have a huge retail presence, which will extend to health products as well. Health insurance is slightly different from pure life insurance. It is necessary to understand health insurance risks separately and price it.”

“We train our distribution forces differently as the pitch for health products is different from a life insurance product. Currently we have five core products and will look into variants in future.

It is a big challenge to create awareness and understanding of the need of health insurance products”, said Agarwala.

Some of the earlier life entrants into the health space are Tata AIG Life, ICICI Prudential and Bajaj Allianz, Reliance Life. Max New York Life, which, came up with a slew of health products, also proposes to tap the retail segment.

For Bajaj Allianz Life, health is one of its key verticals and the company expects to do Rs 120 crore of premium in the current year from the products that it has at present. It will be looking at various new products on women and children in the coming months.

Ujjaini Dasgupta, head, health insurance, Bajaj Allianz Life said, “Essentially standard mediclaim products are different from pure health plans with a life insurance element but with time and innovative products, customers will have a wide choice definitely”.

SBI Life Insurance CEO, U S Roy said, “There is a big segment and we propose to come in with innovative products in health”.

More India business stories

An Asian healthcare study by Credit Suisse that the private sector accounts for 80% of the healthcare expenditure with 64% being out of pocket and public health expenditure in India is among the lowest in the world at around 1% of the GDP.

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