There are a few industries that play a pivotal role in the development of any country’s economy, and it would not be wrong to say that the insurance sector is one of them. The insurance industry in India has witnessed a significant amount of growth in the last few decades, and it continues to grow. Having an insurance policy certainly makes us feel financially secured in the event of an unforeseen incident. Among the various insurance policies available, health insurance is perhaps the most widely purchased one. Health issues and illnesses can take a toll on your savings, and it can derail your life partially or completely. For this reason, people do not mind spending a little on buying these policies. Both public and private health insurance policies are being purchased in good numbers these days.
A little about the history of health insurance in India
The history of the insurance sector in India is basically a reflection of India’s economy in the last few decades. Most of the health insurance companies between the period of 1960 and 1990 were nationalized, and not private. It was the year 1956 when the insurance company ‘Life Insurance Corporation’ came into existence. In 1972, the General Insurance Corporation was formed. During the post-liberalization period, the insurance sector of India witnessed the influx of foreign players. As a result, several private health insurance companies joined the market, which in turn proved to be beneficial for the consumer. It made it easy for consumers to buy health insurance policies at affordable rates. Besides that, consumers now had numerous options to pick from.
An in-depth look into the health insurance market in India
If we talk about the non-life insurance industry in India, the growth rate of the health insurance sector is the fastest one. In the financial year 2017, the market growth rate of the health insurance industry was 24 percent! Talking about the market share in the whole non-life insurance industry, it was around 24 percent. As per the reports, the health insurance sector in the past ten years has witnessed a CAGR of 23 percent, which makes it the fastest-growing market sector in India. So, what could be the reason behind this phenomenal growth rate? Well, the prime reason behind it is the liberalization of the Indian economy. Secondly, people nowadays are getting more aware of the benefits of having health insurance policies. General awareness among the masses on the importance of healthcare is growing for sure.
So, what does the future hold for the health insurance sector in India? It would not be wrong to say that the sector is still at its nascent stage. At present, more or less 25 percent of the Indian population has health insurance plans. As time is passing by, more and more people are getting aware of its benefits. Therefore, there is a huge untapped market potential available for this industry. The health insurance companies need to penetrate more into the market so that they can cover a large chunk of the Indian population.
What challenges the health insurance companies in India are facing?
There are mainly two challenges that today’s health insurance sector in India is facing; First of all, the distribution channel needs to be streamlined. With the advancement of e-commerce, buying health insurance policies has become a lot easier than before. Nowadays, consumers do not have to contact the agents to know about the policies. Every detail is available online. Consumers can check the policies, compare them and then buy the most suitable one as per their convenience and requirements. Besides being a challenge, it can also be seen as an opportunity. More jobs can be created in this process, which in turn will boost the Indian economy.
The second challenge is related to the low penetration of healthcare services. Accessibility, literacy level, mindset, information penetration, and cultural practices are some of the reasons why health insurance companies are not being able to make a deeper impact. Besides these issues, there are other challenges as well, like escalating healthcare expenses, poor infrastructure, unavailability of competent healthcare professionals, etc. The launch of Ayushman Bharat is proving to be effective in encouraging more people to go for health insurance policies. Under this scheme, the policyholder gets coverage of up to half a million Indian rupees. This initiative by the Indian government has increased the penetration of health insurance services in India to 50 percent. Initially, it was just 34 percent.
Go for health insurance policies
In today’s times, if you do not cover yourself with a well-designed health insurance plan, you are putting a lot of things at risk. Having a health insurance plan will not just protect your finances but also help you get treatment without worrying about the funds. Most importantly, it will keep you and your family members away from the heat of the rising cost of healthcare and medical services.