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Thursday, June 26, 2014
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Health Insurance: On the cusp of a disruptive change
Tapan Singhel MD & CEO BajajAllianz General Insurance Company Limited
“Leveraging technology for a universal
insurance solution”
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Table of
contents 1 India - Health Insurance Scenario
2 Prevailing Trends
3 Creating Access and Driving Technology
4 Building Effective Direct Distribution Channels
5 Balancing it for the Genuine Customers
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India – Health Insurance Scenario
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Few Facts
India’s healthcare expenditure is only 3.9% of the GDP, as compared to the BRIC nations
62% of the health-care spending in India is self-sponsored
(commercial insurance <5% )
99% of Indians will face financial crunch in case of any Critical Illness
Huge opportunity for Health Insurance
(Financing gap estimated at USD 220bn by 2020)
CAGR for Health insurance in India– 32%
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Present Situation:
Insurance Market growth is currently
driven by the Urban Market
The Potential:
67% of India’s population residing
in the rural areas
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Present Approach – A Critical Evaluation
Low or no awareness about health insurance at all levels
Complicated sales literature
Lack of innovative segmentation in terms of product and pricing
Advertisement focus mainly on tax benefits /discounts
Focus on selling services and not on social well-being
Distribution chain seems inadequate (low awareness about online services)
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Prevailing Trends
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Pricing as a Strategy
Outpatient Coverages
Wellness and Value Added
Offerings
Tax Benefits and Incentives
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But are we heading in the right direction ?
Low Pricing
Tax Benefits
OPD Coverages / Add on
Wellness and VAS
Can it substitute
general awareness ??!!
Sounds enticing – but what
percentage of the indian
population is taxable ??
BUT.. Are we still able to
reach out to the people ??
Good Concept but still-
under utilised ?
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The real need of the hour
• The consequences of not being covered
• The concern for self and family well-being
Build Health
Insurance awareness
• 700mn Indians don’t have access to healthcare facilities
• Healthcare spend less than 1% of GDP
Improving access
to basic facilities
• Collaborative effort between various regulatory bodies
• Capitalize on the new health regulations along with a valid feedback mechanism for insurance companies
Favourable legal
and regulatory
framework
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Creating Access:
Leveraging the available means
and building for the future
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Leveraging on Regulatory Initiatives
Leveraging on the prevailing distribution network across the country
(eg. NGOs, mobile vans, Post Offices, etc)
One such initiative is the model initiated by IRDA – Common Service Centers (CSC)
CSCs operate in rural areas where there is no access to internet
Insurance Companies to market retail health through an SPV network with the help of Rural
Authorized Person (RAP)
Implementation of Electronic Health Record Standards (EHR) by GOI* – MoH&FW**
Better risk management by way of systematic maintenance of health records along with
standardisation
*GOI- Government of India
**MoH&FW- Minister of Health & Family Welfare
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Utilising prevailing distribution channels (eg. Mobile platforms)
87+ crore mobile users in India (35+ crore rural users)
Tie-up with telephone providers – enabling health cover for every mobile user
Instant source of access to over 65% of the population waiting for a solution
Leveraging on the smartphone technology (initial product information, online forms, etc)
Cost effective insurance solutions in the form of mobile banking platforms
This population being KYC compliant, risk can be mitigated
“Insurance companies know that they have to do a better job of managing risk, controlling
expense, and creating new products. Mobile solutions should be an integral part of achieving
these initiatives”
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Further Consolidation – eg. Integration with HIS / EHR
Easy access to patient health records for prompt and accurate decision on claims
Paperless exchange of billing information
Reduction in transaction time hassle free admission / discharge of patients
Transaction level transparency
Systematic and uniform billing template / code
Best in class service to customers making insurance
a great experience
* HIS – Hospital Information System
**EHR – Electronic Health Records
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Building the Future – Internet as an Intermediary
Internet is estimated to constitute 15-20% of the gross direct premium
Internet user base is expected to reach 70% of total TV viewers by 2016
Online shoppers are estimated to account for 30% of internet users
Impersonal internet experience to be bridged by:
- Telephonic interactions ~ Doctor on call
- Chats sessions ~ Solutions at your fingertips
- Audio visual support
“Internet has the potential to be a holistic delivery platform to the end users offering myriads of services at the press of
a button and where all stakeholders come together to the benefit of the end user. A case in point is the gradual success
of the Online Pharmacy model”
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Building effective
Direct Distribution Channels
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“Agents are and will continue to remain the dominant channel for most companies”
“Forward thinking insurers are leveraging distribution channels as one way to capture the opportunities that exist in the fast growing Asia Pacific markets”
“One size no longer fits all approach”
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Optimising existing avenues and exploring further
Target the untapped from upper strata of
society
Cross- selling through
Intermediaries
Virtual Marketing /
Internet
Micro-insurance segments
Tie-up with
Telecom companies
Worksite Marketing
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Distribution Channel Development by country
Source: Deloitte – More than one approach
Country Agency Banc-
Assurance Tele-
Marketing Virtual
Marketing Worksite
Marketing Micro-
Insurance Wealth
Management Takaful
Australia Mature Mature Mature Mature Growing - Mature -
China Mature Growing Emerging Emerging Emerging Emerging Emerging -
Hong Kong Mature Mature Mature Growing Emerging - Mature -
India Mature Growing Growing Emerging Emerging Growing Emerging -
Indonesia Mature Growing Emerging Emerging Emerging Emerging Emerging Growing
Japan Mature Mature Mature Mature Mature - Mature -
Malaysia Mature Growing Emerging Emerging Emerging Emerging Emerging Growing
New Zealand Mature Mature Mature Growing Growing - Growing -
Philippines Mature Emerging Emerging Emerging Emerging Emerging Emerging -
Singapore Mature Mature Growing Growing Emerging - Growing Emerging
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Balancing it for the
genuine customer
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Are we Pricing
it right and
pricing it for
the future?
Insurance Industry:
Lack of adequate member exposure
Customer and Insurance Companies:
Leakages both at the proposal and claims level Healthcare
Providers Tariff:
Low involvement of insurance companies in
finalising tariff
Fraud check and control
Pricing strategy of providers
Non disclosure of material facts
Soft and hard frauds in claims
“Frauds are estimated
at 15% if the health
insurance industry
business”
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Bridging the gap between the key stakeholders
Healthcare Providers:
More transparency in fixing procedure rates
Insurance Companies:
Customer friendly service and better
engagement
Customers:
A greater awareness to avail services resourcefully
CUSTOMER
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Preparing for the
Journey Ahead
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Reach out to
the potential
customers
Empowering
the customers
by providing
access
Leverage
technology
for better
partnerships
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Thursday, June 26, 2014
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Thank You
Tapan Singhel MD & CEO BajajAllianz General Insurance Company Limited
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