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Even as Government-backed health insurance has picked up, general insurers still find the going tough in rural and semi-urban markets.
State-funded insurance in States such as Tamil Nadu is driving affordability in small towns and bringing more people under insurance cover, said Mr S. Premkumar, CEO, Apollo Hospitals. For instance, Star Health, which bagged the Tamil Nadu insurance mandate, collected a premium of Rs 600 crore last year from the scheme.
“While the rub-off effect of State insurance is slowly being seen on firms which are spending a lot of money on rural penetration, it is definitely a long journey for them,” said Mr Premkumar.
Govt schemes
Government-run schemes such as Rashtriya Swasthya Bima Yojana have also been instrumental in increasing penetration of insurance in rural areas, but retail insurance penetration has been a challenge in rural areas, says Mr Amit Bhandari, Vice-President – Health Underwriting and Product, ICICI Lombard.
Health insurance in India covers less than 5 per cent of the population; it is even lower in tier-II/III cities due to poor awareness about insurance products.
“The penetration of health insurance is still confined largely to urban centres as awareness levels and medical infrastructure are superior,” says Dr Damien Marmion, CEO, Max Bupa.
In tier II/III cities, much of the medical expenses are still funded by individuals and households; the rural customer still has to borrow money or sell assets to meet healthcare expenditure.
But the poor run so far is not deterring general insurers in vying for a bigger share of the largely “untapped” market through agents, bancassurance and corporate agents.
Many insurers are also tying up with regional rural banks, “which help us reach out to these areas better,” said Mr Suresh Sugathan, Head-Health Administration Team, Bajaj Allianz. These tie-ups also help them meet the IRDA mandate of maintaining a certain quota of business from rural markets.
An encouraging factor is that hospitals and clinics are slowly springing up in small towns, given the rising incidence of disease. Growth in rural income and being able to afford healthcare are other encouraging trends, said an industry observer.
Specific products
Insurers have introduced specific products for these markets, hoping for a bigger offtake in the days to come. For instance, Bajaj Allianz's Health Ensure says it is offering lower premia considering that medical expenses are still low in these areas. Max Bupa has two products specifically aimed at the rural market — Swasth Parivar and Swasthya Pratham.
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