The insurance sector is escalating at a fast pace in India. It can be inferred from the fact that in general insurance industry is likely to grow by 32% in the financial year 2016-17.
If we talk about health insurance, around 80% of the Indian population is uninsured. Presently more than 20+ general insurance company working in the Indian insurance sector, there has been seen a boom in the industry.
Let us have a look the reasons which promise upward growth in the field of healthcare insurance in India.
Growing Indian insurance market
There is immense opportunity hidden in health insurance market of India as the gap between healthcare spends, and health insurance coverage is extreme which needs to be addressed. Even if half of the Indian population were covered with health insurance, the insurance sector would observe a dramatic growth.
Growing healthcare cost
Though India has observed a rapid rise of private players in healthcare, public hospitals facilities are still not sufficient to serve a large population. Public hospitals have failed to provide a low-cost, quality care to people. As a result, people are getting dependent more on private health sectors. Government expenditure on healthcare in Indian still lacks behind many other countries of the world. India spends only 4.2% of its national GDP in healthcare goods and services as compared to 18% by the U.S. Due to all these factors combined, private health facilities have become very expensive making it difficult for people to service without a health insurance.
There are a number of initiatives taken by the Indian government in past few years which has brought a boost in the health insurance sector in India.
Two insurance schemes have been announced in 2015-16 by the Indian government:
- Pradhan Mantri Suraksha Bima Yojana for personal accident insurance plan
- Pradhan Mantri Jeevan Jyoti Bima Yojana, government’s life insurance plan
IRDAI, Insurance Regulatory And Development Authority of India, has recently announced that the public sector insurance companies can offer up to 10% discount on the premium of general insurance policies. This discount is available only if the insurance policy is bought online through customer portals.
Regulation has been formulated by IRDA, which imposes obligations on insurance providers for offering insurance coverage to rural as well as financially weaker sections of the societies.
IRDA has formulated two committees to suggest ideas to promote e-commerce in the insurance sector. This step has been taken to raise insurance penetration and obtain the financial inclusion.
With lower physical labor than earlier, a large percentage of Indian population is on a high risk of chronic lifestyle diseases, like diabetes and cardiac problems. With more than 25 million heart disease patients, Indian is home to a large number of incidences of lifestyle diseases. These diseases can incur a huge strain on the pocket. To avoid these, more people now seem interested to sign up for a health insurance.
Insurance sector of India is full of immense potential which still needs to be explored.