Health insurance and its evolving facets

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Before the pandemic hit the Indian shores, health insurance in India while purchased by a small section of the population, was looked at mostly as an expense rather than a necessity. The pandemic caused a major shift in this perception.

The past year and a half required many people and their families to undergo hospitalisation due to the pandemic. With the expenses incurred due to the treatment, it required people to be financially prepared. Those who had insurance managed to get back on their feet as quickly and possible, thereby underlining that fact that a health insurance prevents a medical emergency from turning into a financial emergency.

This brought about increased awareness and consumer perception towards health insurance altered significantly. Further, timely intervention by the regulator, and quick adaptation by general insurers in a pandemic- altered world, has brought about a slew of changes in the health insurance industry.

Regulatory intervention

The insurance regulator IRDAI, ensured that policyholders had access to the required insurance solutions during troubled times. Therefore, the regulator mandated the inclusion of treatment of Covid-19 under health insurance policies wherever applicable.

The regulator also mandated changes in the underwriting process such as allowing telemedical consultation and e-KYC for the issuance of new policies and renewals and launched Covid specific products Corona Kavach and Corona Rakshak.

Standardisation of health insurance product

The most important change that happened in the past year however was the standardisation of health insurance with the introduction of Arogya Sanjeevani, a basic health insurance plan.

For first-time policyholders, who had so far been contemplating about buying insurance, standardised product was a good option to consider. Here was a product that was comprehensible and provided basic financial assistance in case of a medical emergency. Standardisation of health insurance has created a level playing field and is a perfect fit in the portfolio of first-time consumers. Armed with a standard product, a consumer also has the option to assess his needs and opt for enhanced coverage from himself and his family through other customised offerings of insurers.

Way ahead for health insurance industry

The slew of changes that the health insurance industry went through in the past year, were also made possible by the digitisation drive that insurer had undertaken even before the pandemic. However, it is no exaggeration to say that, just as the pandemic has altered consumer mindset, it has greatly impacted the core thinking of the insurance industry traditionally identified by face-to-face business.

From e-KYC to claim settlement, not only is a robust digital ecosystem in place, but insurers are also rethinking the use of data and technology for better understanding and reach to consumers. Several innovations such as the use of machine learning and AI through chatbots used to address customer concerns and customised products have certainly picked up pace and will be further enhanced to serve the evolving insurance customer better.

While the human interaction cannot be replaced given implicit bond of trust that must be established between an insurer and a policyholder, technology will serve the complement offerings thereby improving service standards for the industry.

It is undeniable that with the increase in awareness of health insurance, customers have understood the importance of a highly comprehensive health cover that is helpful for them and their family.

(The author is Lead – Underwriting – Health & PA , SBI General Insurance. Views expressed are personal.)