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Health Insurance In India

Health Insurance In India. 1. COURSE OBJECTIVES. To understand the health insurance industry in India To know about the health insurance companies. To learn about various health insurance product features. 2. PART I Health Insurance in India: Needs Assessment and Overview

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Health Insurance In India

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  1. Health Insurance In India 1

  2. COURSE OBJECTIVES • To understand the health insurance industry in India • To know about the health insurance companies. • To learn about various health insurance product features 2

  3. PART IHealth Insurance in India: Needs Assessment and Overview PART IIHealth Insurance Companies and Products

  4. PART IHealth Insurance in India: Needs Assessment and Overview PART IIHealth Insurance Companies and Products

  5. What is Insurance? Insurance is a contract in which an individual or entity, pays the insurance company in return for the insurance company bearing the risk of loss against specified conditions. The individual  receives reimbursement against losses from an insurance company. The company pools the clients' risks to make payments more affordable for the insured. 5

  6. The Need for Health Insurance? • For compensating very expensive health care treatment • Over 70% of these spends are out of pocket which leads to lot of hardships. • According to a survey by NSSO (National Sample Survey Organization), 40% of the people hospitalized have either had to borrow money or sell assets to cover their medical expenses. 6

  7. The Need for Insurance • High propensity to develop life style related diseases likeobesity, diabetes mellitus, hyperlipidemia, hypertension and cardiovascular diseases in India • highest heart disease and diabetes rates in the world 7

  8. The Need for Insurance • Health insurance penetration is at only 3% compared to other countries like UK (12.5%), Japan(10.5%) • Healthcare spend in India is only 4% of it’s GDP, whereas it has 1/6 of the world population! • High level of private spending (75%) Vs low level of public spending (23%) 8

  9. Healthcare Industry Spends Break-up 8

  10. Country wise GDP spending on healthcare

  11. Comparison of healthcare Spend


  13. OTHER DEVELOPMENT – UNION BUDGET 2014-15 • Upto 49% FDI allowed in Insurance, through FIPB route. Controlling stake must be Indian. • Insurance Amendment Bill to be taken up by the new Government.

  14. Detariffing Health Insurance • The cost for an insurance policy was earlier decided by the Tariff Advisory Committee (TAC). • Detariffing was implemented in two phases –January 1, 2007: insurers were permitted to increase or reduce premium by 20% on both sides from their then existing pricing. • No change in product terms and conditions

  15. Detariffing Health Insurance • March 2008: Complete freedom on pricing had been granted, including customisation of product according to each individual. • The premium amount of an insurance policy can be either loaded or discounted, based on several risk factors, as against the earlier norm of fixed premium prices for a particular sum assured in a category.

  16. Detariffing Health Insurance • On detariffing, • Rating will be based on the risk profile of the customer; • Will force insurers to scale up their risk-assessment capability and give the underwriting function its due importance in the insurance process. • Focus on the core function of analysing and pricing transfer of risk.


  18. Healthcare Industry - Turnover

  19. Growth Drivers • Demographic Factors • India has 1/6 of the world population occupying 3% of the world’s area • Geriatric population expected to increase from 96 million to 168 million by 2026. • Higher disposable income – rise of double income middle class families in urban India • Increased incidence of lifestyle related diseases in India like diabetes, cardiovascular, oncological etc: • Increasing awareness of health insurance • adult literacy rate 61.3% and youth literacy rate 73.3%

  20. Growth Drivers • Economic Factors • Tax benefits by GOI in terms of higher depreciation on medical equipment, income tax exemption for 5 years for hospitals in rural areas, and for employees tax exemption upto Rs 15000 under section 80D. • India is one of the emerging destinations for medical tourism • Insurance coverage to increase due to higher penetration from private players. So also institutional insurance and tertiary care to increase rapidly. 22

  21. Growth Drivers • Economic Factors • Detariffing the General Insurance industry • Rationalization of premium rates 23

  22. PART IHealth Insurance in India: Needs Assessment and Overview • PART IIHealth Insurance Companies and Products • PART IIIProduct Pricing and Distribution • PART IVEmerging Problems and Solutions


  24. PUBLIC SECTOR COMPANIES • National Insurance Co Ltd • New India Assurance Co Ltd • Oriental Insurance Co Ltd • United Indian Insurance Co Ltd

  25. PRIVATECOMPANIES • Future Generali India Insurance Company Ltd • Bajaj Allianz General Insurance Co Ltd • ICICI Lombard General Insurance Co Ltd • IffcoTokio General Insurance Co Ltd • Reliance General Insurance Co Ltd • Royal Sundaram Alliance Insurance Co Ltd • TATA AIG General Insurance Co Ltd • Cholamandalam MS General Insurance Co Ltd • HDFC ERGO General Insurance Co Ltd • Universal Sompo General Insurance Co Ltd • Bharti AXA General Insurance Co Ltd • SBI General Insurance Company Ltd • Raheja QBE General Insurance Co Ltd • L & T General Insurance Co Ltd • Magna HDI General Insurance Co Ltd • Liberty Videocon General Insurance

  26. STANDALONE COMPANIES • Apollo Munich Health Insurance Company limited • MAX Bupa Health Insurance Company Ltd • Religare Health Insurance Co Ltd • Star Health and Allied insurance Co Ltd

  27. For Profit RSBY Mediclaim Arogyasri CGHS ESIS Full subsidy No subsidy Yeshwini SEWA Karuna Kalaignar Not for Profit

  28. Competition Structure

  29. Bajaj Allianz General Insurance Co. Ltd. • Bajaj Allianz is the joint venture between Bajaj Finserv Limited and Allianz SE. In a short span of time, the brand made its way to the leading health insurers in India. Features like tie-ups with over 3,200 network hospitals and 24X7 call assistance for claims settlement is the proof of their customer oriented approach. • Lowest claim rejection ratio among private health insurance companies • The only private insurer to make a whopping profit of Rs 100 crore in the last 4 years • ISO re-certified for claim processing

  30. National Insurance Co. Ltd. • Celebrating its 106 glorious years, NIC is the oldest insurance company in India (even older than LIC). With a 14.11% market share, National Insurance Co. Ltd. is the third leading player in the health insurance sector and the fastest growing public non-life insurer.  With its robust network of 1,340 offices and 15,200 employees, NIC serves over 16 million customers. • Business leader award by NDTV Profit in 2011 • Unserved market penetration award by Indian Insurance Awards in 2012 • Outstanding social contributor of the year award by Indian Insurance Awards in 2012 • Recognized as best in service in health insurance • Best customer service by HT-MaRs survey in 2010-11 • Rated AAA/Stable by CRISIL, suggesting a sound financial health

  31. New India Assurance Co. Ltd. • New India is the first wholly Indian owned insurance company in India. With a 17.89% market share, it stands tall as the nation’s leading general insurance company. Bolstered by a network of 1068 offices and 21000 employees, New India has always tried to add an Innovative approach to insurance products. As a health insurer, New India Assurance launched mediclaim policies that cover Ayurvedic / Homeopathic and Unani system of medicine (limited to 25% of the sum insured), a first of its kind initiative. • Rated A- (Excellent) by A.M.Best Co., reflecting its robust financial framework • The only Indian insurance company to be rated by an international rating agency

  32. Bharti AXA General Insurance Co. Ltd. • BhartiAXA is a joint venture between Bharti Enterprises, India’s leading telecom business group and AXA Group, a global leader in insurance. • Recently, it has gained huge attention of the market by transforming the way a claim is perceived by the customer. With their new strategy, they have managed to speed up the claim settlement process by assigning a dedicated claim handler to each insured person making a claim. The brand has also come up with an innovative health insurance product ‘Lifestyle Protection Solution’, that promises to take care of not just health expenses but also lifestyle expenses of the insured. • Claims initiative of the year award by Star of the Insurance Awards in 2013 • Best performance in insurance category by Hyundai’s CCS Vendor Conclave in 2013 • Best product innovation award by Indian Insurance in 2012

  33. Oriental Insurance Co. Ltd. • Incorporated in 1947, Oriental Insurance Company is a general insurance company owned by the Central Government of India. With over 900 offices and 16,000 employees, Oriental Insurance enjoys 11.94% market share and stands tall as the 5th biggest player in the health insurance sector. • Its claim settlement ratio is high and so is its Incurred claim ratio (102.83%), reflecting a high level of trust and reliability, customers can put in this brand. • Best public general insurance award by CNBC TV18 in 2011 • Best bank and financial institution awards by MCX in 2011 • iAAA rating given by ICRA, indicating a sound financial health

  34. United India Insurance Co. Ltd. • United India Insurance, set up in 1938, is one of the oldest insurance companies in India. In 1972, as a consequence of nationalization of general insurance, a number of Indian and foreign insurers merged together with United India Insurance. From that point, there was no turning back for the brand. At present with a 15.09% health insurance market share, United India stands only second to the New India Assurance in the health insurance domain. Supported by 1,340 offices and a diligent workforce of 18,300 employees, the company has insured over 10 million people. • Innovation in product award for super top-up medicare in 2012 • General insurer of the year – public sector award from Bloomberg UTV in 2012

  35. Future Generali India Insurance Co. Ltd. • Future Generali is a joint venture between Future Group, India’s leading business house and Generali Group, Europe’s largest insurance provider. To give you an idea of how gigantic this group is, Generali Group employs 1,00,000 people  serving  70 million clients in 68 countries. Future Generali differentiated itself as a brand by introducing the concept of mallassurance channel that is providing total Insurance solutions at shopping malls. • A+ rating given by A.M Best global rating agency, indicating a robust financial framework

  36. HDFC ERGO General Insurance Co. Ltd. • HDFC ERGO General Insurance Company Limited is a joint venture between HDFC Limited, India’s premier Housing Finance Institution & ERGO International AG, the primary insurance entity of Munich Re Group. HDFC is renowned for its customer centric approach and its efficient claim settlement. HDFC has one of the highest claim settlement ratios among health insurers (96% CSR in 2011) and has a comparatively shorter claim settlement turnaround time than most of its competitors. • ISO 9001:2008 certified for its claim services • Best general insurance company in India by IAIR in 2013 • iAAA rating given by ICRA, indicating a sound financial health

  37. ICICI Lombard General Insurance Co. Ltd. • ICICI Lombard GIC Ltd. is a joint venture between ICICI Bank Limited, India's second largest bank and Fairfax Financial Holdings Limited, a Canada based multi-billion dollar financial services company. • With a 12.04% market share, ICICI Lombard is the fourth largest general insurance company and the largest among private players. It boasts of having one of the highest claim settlement ratios in the health insurance segment. • Golden peacock award for corporate social responsibility in 2012 • ICICI Lombard Complete Health Insurance was voted product of the year by Nielsen in 2013 • Best technology implementation award by NASSCOM - CNBC TV18 in 2010 • Most preferred brand in the General Insurance category by CNBC Awaaz Consumer Award in 2010

  38. IFFCO Tokio General Insurance Co. Ltd. • IFFCO Tokio is a joint venture between IFFCO (Indian Farmers Fertilizer Co-operative) and its associates and Tokio Marine and Nichido Fire Group, the largest listed insurance group in Japan. • The brand is known for its customer focused strategies such as speeding up claim settlements and conducting bi-annual customer satisfaction surveys. • Mentioned as an innovative distribution channel in Capgemini World Insurance Report, 2009

  39. L & T General Insurance Co. Ltd. • L&T General Insurance is a wholly owned subsidiary of Larsen & Toubro Limited which was listed as one of the world's top 50 most reputed companies by Forbes in 2009. • L&T General Insurance leads all the other health insurance companies in incurred claim ratio. A high ICR (183.40% for the year 2011-12) is a reflection of how dedicated a company is, in paying out the financial cover to its customers at the time of need. • my:healthMedisure Prime Insurance was voted product of the year by Nielsen in 2012 • Rising star insurer award at the Indian Insurance Awards in 2011 • Technology leader award at the Indian Insurance Awards in 2012

  40. Reliance General Insurance Co. Ltd. • Reliance General Insurance is a subsidiary of Reliance Capital, India’s leading financial services company. The company was set up with an objective to make health insurance an easily accessible product in India through a network of hospitals and distribution channels. Reliance is well keeping up with its objectives via 152 offices spread throughout the country and 24x7 customer care center. • First ISO 9001:2000 certified insurance company in India

  41. Royal Sundaram Alliance Insurance Co. Ltd. • Royal Sundaram Alliance is joint venture between Sundaram Finance, a non-banking financial company and Royal Sun Alliance, one of the largest insurance companies in UK. The company boasts of providing cashless facility in more than 3000 hospitals throughout India. Currently, it has over 1700 employees fulfilling the health insurance needs of over 5 million customers. The company’s high claim settlement ratio is a reflection of its dedication to its customers. • First private sector general insurance company in India to be licensed since 2001 • First private insurer to introduce innovative health insurance concepts like hospital cash and cashless settlement

  42. SBI General Insurance Co. Ltd. SBI General Insurance Company Limited is a joint venture between the State Bank of India, the largest banking franchise in India and Insurance Australia Group (IAG), an international general insurance group. With a high incurred claim ratio of 122.82% in 2011-12, SBI gained the trust of the customers and is on its way to capture a big chunk of the health insurance market this year. SBI General registered a staggering 481% growth in premium in 2012.

  43. TATA AIG General Insurance Co. Ltd. • Tata AIG General Insurance is a joint venture between Tata Group and American International Group, an US based global insurance organization. The brand is a perfect blend of Tata Group's leadership position in India and AIG's global insurance leadership. • Recognized for its effective mobile application in insurance by Celent Model Insurer in 2013

  44. Apollo Munich Health Insurance Co. Ltd. Apollo Munich is a joint venture between Apollo Hospitals Group, Asia’s largest healthcare provider and   Munich Health, a global health insurance leader. With such a cogent tie-up, the brand has created quite a buzz in the market. Apollo Munich Health Insurance is one of the four stand alone health insurance companies in India and purports to offer the fastest claim settlement though its network of 4000 hospitals and 10,000 doctors. The brand is known for its innovative health insurance plans with unique features such as 50% NCB in just a year. The following statistics gives an idea of their customer centric approach. Cashless authorization done within 2 hours of claim intimation – 90% Customer satisfaction – 85% Renewal Rate – 80% <30 days claim settlement – 95%

  45. Max Bupa Health Insurance Co. Ltd. • Max Bupa is a joint venture between Max India Limited and the UK based Bupa Finance PLC. This diverse partnership has strengthened the brand with the best of both worlds, Max India’s local expertise and Bupa’s global healthcare experience. • Health insurance company of the year at Indian Insurance Awards in 2012

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