Question -How do you see the insurance landscape changing in India over the next decade?
Answer – After the surge of Covid-19, the sensitivity among the people concerning healthcare and health insurance has increased significantly. This creates a massive opportunity in the marketplace for the players to innovate and invent products and services pertaining to the insuretech space. Demand for health insurance will fuel growth in the non-life sector as individuals become more aware of health security following COVID-19 and also benefit greatly from a government-sponsored mass health programme (Ayushman Bharat). According to the Swiss-re-institute report, India is one of the fastest growing insurance markets in the world. In terms of total premium volumes, it was the 10th largest globally in 2021.
Question – What role do you think technology will play in the growth story of Health Insurance in India?
Answer – Technology today has a massive impact on every industry directly and indirectly. In the health insurance sector, it plays a crucial role in reducing costs in the following three domains. Firstly, the education of the consumers is dealt with by technology in order to simplify the insurance sphere and assist individuals in taking the right decisions and making them aware of both positive and negative consequences. Secondly, the distribution of insurance is facilitated by the means of technology. Today, the traditional distribution of insurance is replaced by digital distribution channels involving a lot more transparency and communication. It facilitates periodical updates to policyholders about their insurance so that they are left clueless in the middle of nowhere. Lastly, in its current form technology is a support function for the insurance industry in India rather than a core function. Technology has the potential to innovate in different horizons pertaining to health insurance which are yet to be discovered but will impact in wonders once enabled. We have different tools via technology for most of the sectors and this can be judiciously looked upon by the upcoming and existing players.
Question – We have seen large investments in the insuretech space by VC and PE firms over the last few years. Do you think the start-ups have enabled us to educate and simplify insurance to the bottom tiers?
Answer – The answer to this question comes in various folds. Initially, we need to recognize the problem and understand whether the money raised by the VC and PE funding are able to resolve those issues. In the current scenario, the major issue lies with the mindset of the people. They treat health insurance as an expense instead of an investment. The mindset change problem can be resolved with the appropriate education and imparting knowledge to the customers along with the right marketing strategy. Another major concern with the sector is the complication in product understanding. By default, insurance companies deliberately ensure the products are made complicated. This is justified because of the fact that, in an industry like health insurance, you can’t add value to a human life whereas you can do so with a car or any asset. With medical science evolving all the time, the healthcare sector is expanding and maturing at its own pace, continuously forming a vicious circle of if and else. Technology has enabled advancement in the treatment of diseases due to which there is constant change. This issue can only be solved by the insurance agencies with their products and services, claims, and building trust with the customers. Once the above-mentioned issues are catered, the funding can be utilitarian. Lastly, the problem lies in India’s growth story- the per capita income of the population buying insurance. In India, if the customer is unable to fulfill his basic needs and demands, he won’t be able to invest in health insurance. This problem cannot be dealt with with VC funding but with the evolution of India as a country. If we grow, more people will enter the middle-class bracket, increasing the spending capacity of the population, and making them equipped for investing in health insurance.
Author: Ruchir Kanakia, Co-Founder & CEO, OneAssure
Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of IIA and IIA does not assume any responsibility or liability for the same.