Health Insurance market in India has become the fastest growing segment in non –life insurance sector in India. The health insurance business in India saw a 24% growth in FY 17 with a premium of INR 30,765 Cr and a market share of 24%. It has been the fastest growing market segment registering a CAGR of 23% for the past 10 years. Health Insurance Industry is in a nascent stage with 25% of population under its coverage. There exists a huge potential for growth and penetration of Health Insurance to a large population. Going forward in the future there are both opportunities and obstacles in marketing and distribution of Health insurance products in India. This paper attempts to uncover the prospects of successful marketing of such products from the standpoint of Insurance marketers and look at issues of impeding the growth of health insurance market in India.
Inhaltsverzeichnis (Table of Contents)
- Overview of Health Insurance Market in India
- Key Factors Driving Growth
- Environmental Factors
- Regulatory Factors (IRDAI Initiated)
- Challenges
- Problem of Adverse Selection / Anti Selection
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This study aims to analyze the growth prospects and marketing challenges of health insurance in India. It examines key growth drivers, both environmental and regulatory, and identifies significant obstacles hindering market expansion.
- Growth of the Health Insurance Market in India
- Factors driving the growth of health insurance in India
- Challenges faced in marketing health insurance in India
- Analysis of loss ratios and their impact on the market
- The problem of adverse selection in health insurance
Zusammenfassung der Kapitel (Chapter Summaries)
Overview of Health Insurance Market in India: This section provides a general overview of the health insurance market in India, presenting data on premium growth from 2006-07 to 2017-18. It highlights the significant growth of the market and its position within the overall non-life insurance sector. The section also illustrates the various sources of healthcare financing in India, emphasizing the substantial portion borne by citizens themselves through out-of-pocket spending. This sets the stage for a deeper examination of the market's dynamics, including its drivers and challenges.
Key Factors Driving Growth: This section delves into the factors contributing to the growth of health insurance in India. It categorizes these drivers into two main groups: environmental and regulatory. Environmental factors encompass population demographics, rising disposable incomes, an increase in lifestyle diseases, high medical inflation, and the impact of digitalization. Regulatory factors focus on IRDAI initiatives, such as the Insurance Laws Amendment Act of 2015, increased foreign investment limits, amendments to the Insurance Act of 1938, private equity investment allowances, stock exchange listings, bancassurance market expansion, portability introduction, tax exemption increases, and the creation of standalone health insurers. This comprehensive analysis highlights the interplay between societal shifts and regulatory changes in shaping market growth.
Challenges: This section outlines the various challenges faced by the health insurance market in India. Key challenges include adverse selection, lack of awareness, public attitudes and perceptions, unregulated healthcare providers, distribution and marketing issues, high loss ratios, high medical inflation, and a geographically skewed portfolio heavily concentrated in urban areas and a few high-GDP states. This unbalanced distribution poses significant marketing challenges and necessitates strategies for wider market penetration. The analysis of loss ratios across public, private, and standalone insurers further complicates the market dynamics.
Problem of Adverse Selection / Anti Selection: This section specifically addresses the issue of adverse selection in the Indian health insurance market. It explains adverse selection as the tendency of individuals with below-average health to seek insurance more frequently than those with average or above-average health. This phenomenon results in an underwriting risk pool of substandard health, leading to more frequent and steeper premium increases which can make insurance unaffordable for healthier individuals. The assumed prevalence of adverse selection in India (approximately 20%) is discussed, highlighting its critical impact on market stability and affordability.
Schlüsselwörter (Keywords)
Health insurance, India, market growth, marketing challenges, IRDAI, regulatory changes, adverse selection, loss ratios, medical inflation, healthcare financing, population demographics, disposable income, lifestyle diseases, urban vs. rural market, distribution channels.
Frequently Asked Questions: Analysis of the Indian Health Insurance Market
What is the purpose of this study?
This study analyzes the growth prospects and marketing challenges of the health insurance market in India. It examines key growth drivers (both environmental and regulatory) and identifies significant obstacles hindering market expansion.
What are the key themes explored in this analysis?
The key themes include the growth of the Indian health insurance market, the factors driving this growth, the challenges faced in marketing health insurance in India, an analysis of loss ratios and their impact, and the problem of adverse selection.
What is the overview of the Indian health insurance market?
The overview provides data on premium growth from 2006-07 to 2017-18, highlighting significant market growth within the non-life insurance sector. It also illustrates the various sources of healthcare financing in India, emphasizing the high proportion of out-of-pocket spending by citizens.
What are the key factors driving the growth of the health insurance market in India?
Growth drivers are categorized into environmental and regulatory factors. Environmental factors include population demographics, rising disposable incomes, increased lifestyle diseases, high medical inflation, and digitalization. Regulatory factors include IRDAI initiatives like the Insurance Laws Amendment Act of 2015, increased foreign investment limits, and other policy changes.
What are the major challenges facing the health insurance market in India?
Challenges include adverse selection, lack of awareness, public attitudes, unregulated healthcare providers, distribution and marketing issues, high loss ratios, high medical inflation, and a geographically skewed portfolio concentrated in urban areas. The analysis of loss ratios across different insurer types further complicates the market dynamics.
What is adverse selection, and how does it affect the Indian health insurance market?
Adverse selection is the tendency of individuals with below-average health to seek insurance more frequently. This creates a risk pool of substandard health, leading to higher premiums and potentially making insurance unaffordable for healthier individuals. The study discusses the assumed prevalence of adverse selection in India (approximately 20%) and its impact on market stability and affordability.
What specific regulatory factors are examined?
The analysis examines IRDAI initiatives such as the Insurance Laws Amendment Act of 2015, increased foreign investment limits, amendments to the Insurance Act of 1938, private equity investment allowances, stock exchange listings, bancassurance market expansion, portability introduction, tax exemption increases, and the creation of standalone health insurers.
What keywords best describe this study?
Health insurance, India, market growth, marketing challenges, IRDAI, regulatory changes, adverse selection, loss ratios, medical inflation, healthcare financing, population demographics, disposable income, lifestyle diseases, urban vs. rural market, distribution channels.
- Quote paper
- Manoj Pareek (Author), 2018, Prospects for growth and issues in marketing of Health Insurance in India, Munich, GRIN Verlag, https://www.grin.com/document/446074
