Buoyed up by a resurgent economy, the Rs 3,200-crore Indian health insurance industry is poised to reach further heights, observers say.
At a growth rate of over 44 per cent per annum, it is one of the most attractive businesses for non-life insurers and even life insurers are jumping in the fray.
The Life Insurance Corporation of India (LIC), for instance, is planning to launch a health insurance product in the second half of this year. The product will be long term, stretching from eight to ten years.
Similarly, SBI Life is also working on introducing health insurance products. Says U S Roy, managing director and CEO of SBI Life insurance, "We are in the process of launching a bouquet of health insurance products in two to three months."
SBI Life plans to launch standalone health insurance products as well as those with life insurance cover. According to Roy, these products will have several variations and options for the consumer. "The attractive features of the product will be its transparency, with no hidden costs and restrictions. It will be more affordable and cost-effective," adds Roy.
Even the private sector major ICICI Prudential has more health insurance forays on the anvil. "We will be focussing on health insurance this year," says Shikha Sharma, Chairman and Managing Director of ICICI Prudential Life.
At present, life insurance companies are offering an amalgam of four products that are hospital cash, critical illness, life cover and surgical benefits. However, unlike the products offered by general insurance companies, these policies do not reimburse the insured for his medical or hospitalisation expenses.
Instead, they offer a pre-defined amount of money to the insured, when he is faced with the risk. That is, being based on the principle of benefit, these policies pay you the lump sum when you fall ill, instead of compensating you for the medical expenses.
Says Rahul Agarwal, CEO, Optima Risk Management Services, "Internationally, life insurance companies are better positioned to sell health insurance products because they have access to data related to mortality, disease pattern, changes in disease pattern as per geography and age. The non-life insurance companies don't have such data."
However, experts feel that health insurance products offered by non life companies are better priced and less restrictive and hence seem to be a better choice for a customer, at present."
Ironically the oldest player, the public sector General Insurance Corporation, has substantially hiked the premium in a new product.
The rate of hike ranges between 10 per cent and 70 per cent depending on the age. Its new mediclaim policy has also increased the time frame for covering exclusions from second to third year of the policy, and has put a cap on the daily room rent at one per cent of the sum insured and two per cent in ICU, and increased the minimum sum to Rs 50,000 from Rs 15,000 besides introducing several other restrictions.