2018 will see more of the technological and product innovations that we saw in health insurance in 2017, says Cigna TTK Health Insurance CEO and MD Sandeep Patel. Excerpts:

How has the health insurance segment fared in 2017 and how does 2018 look?

In 2017, one of the most noteworthy events in health insurance was that the regulator, the Insurance Regulatory and Development Authority of India (IRDAI), took notice of the role that wearable technology can play in helping track the health of a person. A Cigna 360° Well-being Survey had indicated that the use of medical apps and devices is on the rise as people become more health-conscious. IRDAI constituted a working group on innovations in the use of wearable and/or portable devices, which will look at how technological advancements, particularly wearable and portable devices, may be treated from the point of view of risk improvement, risk assessment and use/distribution of such devices as part of policy design.

We believe that innovation in health insurance will continue in 2018; the latest health insurance regulations allow insurers to run pilot projects for innovative new insurance products. The year will also see the working group on innovations in use of wearable and/or portable devices in insurance put forward its report and recommendations. Also, consumers are now seeing value for health insurance in illness and in wellness; health insurance plans will help one live holistically through various programs. Wellness as an offering will be even more valued by customers in 2018. Health insurance will increasingly focus on ‘condition management’, adoption of wearable/portable devices by insurers and will go beyond hospitalisation.

Isn’t health insurance penetration in India very low?

India’s great healthcare challenge is also an opportunity. While India is poised to be an economically powerful nation, the people are plagued by a ‘dual disease burden’, an increase in communicable diseases and a spurt in non-communicable/lifestyle diseases. While 85 per cent are covered by private medical insurance, nearly two-thirds of medical expenses are self-funded. Local government and public-welfare schemes contribute a paltry 7 per cent and the share of employer-provided along with self-purchased insurance account for a mere 13 per cent. About 15 per cent of the populace is not covered by either private or government insurance schemes.

The overall insurance penetration in the country is currently under 4 per cent, with health insurance accounting for just over a quarter of the insurance pie.

What is the industry doing to increase its reach?

While the standalone health insurance segment in India, which only started off a decade ago, is doing its bit to change the landscape, health insurance needs to reach the masses, for which affordability is the key, along with preventive and wellness care.

Besides enhancing its product offerings, the industry is moving towards the use of digital to stay connected with customers, providing them with efficient and effective services at their fingertips. Besides increasing its network of Bancassurance partners, the industry is focussing on expanding its reach through the use of mass outreach platforms such as online and social media and on-ground activities such as health camps and training its sales force so that the products can be explained better.

How does technology impact health insurance?

The impact of technology has already seeped into the health insurance industry with apps and wearable devices gaining mass acceptance. At Cigna TTK, we have leveraged this with our Get ProActiv app, which is integrated with its Healthy Rewards Program, allowing customers to earn incentives by tracking their activities using select wearable devices. They can also enter non track-able activities into the application. Healthy Reward points are earned on the basis of the quantum of physical activity.

Another major use of technology would be to predict customer behaviour through analytics for risk mitigation and fraud detection and to anticipate future customer needs. Further, analytics can be used to provide targeted preventive care through customised product recommendations.

Customers are keen on doing their own research before buying insurance products; companies are using online tools such as social media to educate customers about wellness and preventive care, building stronger brand loyalty and providing value-added engagements.

Medical inflation is at 16-17 per cent. How is it impacting the way consumers buy health insurance?

The medical expenses of the average household can easily exceed the medical allowance limit of ₹15,000 per year. Health insurance policies normally don't cover expenses like consultation fees, medicines and diagnostics, and individuals have to shell the extra amount out of their own pocket. Customers are now looking for insurance products that cover the inflation cost, prompting insurance companies to design need-based products. Cigna TTK introduced a feature through its ‘Inflation Shield’ to take the burden off the policy buyers, where every year the sum insured will increase by 10 per cent — whether or not you have made a claim.

Do you have any products for senior citizens?

Yes, we do have products for senior citizens. Both our ProHealth Select and ProHealth Insurance provide cover for senior citizens (subject to underwriting guidelines)

Will you roll out cheaper health insurance products in 2018?

Most people do not buy a health insurance plan when they are young and healthy. When one gets older and has medical issues, health insurance will be expensive as the customer comes with health risks. In fact, when one is younger and healthier, not only does one pay a lower premium, one is further rewarded with discounts and unclaimed bonus coverage for remaining healthy.

At Cigna TTK, we offer products based on deep consumer insights. Providing affordable health cover has always been part of our product planning and pricing strategy. We have in our portfolio a range of affordable offerings and will continue to roll out more such affordable products in 2018 as well.

Any recommendations from the industry for the Budget?

With medical inflation on the rise, the industry feels the government should increase tax exemptions on health plan premiums. Also, health insurance policies normally don’t cover expenses like consultation fees, medicines and diagnostics, and individuals have to shell the extra amount out of their pocket. Companies cap the medical allowance at the tax-free limit of ₹15,000. If this limit is raised, companies will also be encouraged to increase the allowance.

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