Insurers Need To Improve Financial Literacy Among Rural Folk: Dr S Prakash

In an interaction with BW Healthcare World, Dr S Prakash, Managing Director, Star Health and Allied Insurance speaks on the trends health insurance sector, its rural and urban penetration, ways to increase the health coverage, the emergence of InsureTech and Star Health's standings in the space

How have the last few years been for the health insurance sector in India?  

The last few years have seen health insurance become a household topic in India. The pandemic has increased awareness on the need for every individual to have at least a basic health insurance cover. It also resulted in the government increasing spending on insurance and health care. While the industry saw a marked uptake in insurance products, the sector also witnessed heightened claims due to pandemic and increased treatment costs from across the country.

The last two years also saw rapid digitalisation of the sector. Digitalisation also ushered in ease of access for customers simplifying processes like purchasing policies, registering claims, downloading policy details, interacting with customer care and much more. Many insurers leveraged technologies like AI and Machine Learning to bring a higher degree of customer centricity to their business.  
The industry also saw major changes on the regulatory front. IRDAI issued a slew of guidelines geared towards making insurance accessible to all and the sector more transparent. Guidelines like modifications to pre-existing disease rules, including coverage for Modern Treatment Methods, reducing the list of non-payable items, issuing standard Covid products to provide cover to people during the pandemic and guidelines on migration and portability are some of the reforms that benefited customers.

The regulator also introduced guidelines to make the sector more transparent and increase ease of doing business. IRDAI regulations like 'use and file' and relaxation of investment rules, provided much needed impetus to the industry to enhance penetration. The regulator is now in the process of introducing more changes to the industry. It is also pushing insurers to aggressively increase penetration in rural markets with an aim to make insurance accessible to every individual across the country.   

What is the ratio of the urban and rural population with insurance coverage?  

According to the recently released National Family Health Survey-5 (NFHS-5), a little over two-fifths or 41 per cent of households in India have at least one individual covered by a health insurance plan or health scheme.  

The survey found that 38.1 per cent of urban population and 42.4 per cent of rural population had some form of health cover. There is still a large percentage of people in India who are not covered under any health insurance plan, health fund or govternment scheme, especially those above BPL.    

How can we increase health insurance coverage in rural India?  

Insurers need to improve financial literacy among the rural population. Health insurance is an investment in one's wellbeing and financial security. There is a need to educate people on the benefits of health insurance and how it can safeguard them from adverse health spends that will likely burden their personal finances. Along with this, insurers also need to build brand trust and goodwill in these markets. One of the biggest drivers here will be tech based accessibility solutions. As smartphone usage in rural India is quite high, mobile technology based solutions will play a vital role in bridging the last mile gap. Along with this, affordable customized products that cater to these regions will drive health insurance uptake in rural India.    

InsurTech is growing fast, what are the upcoming trends in the space?  

InsurTech is a much-needed disruptive force, going forward we will see more players enter this segment. This segment will help drive insurance penetration in both urban and rural markets. With the growth of these channels, we will also see new customer segments emerge. InsurTech will help accelerate insurance adoption. Partnering with traditional players, they will bring technology driven solutions, increase automation and customer centricity, thereby enhancing the end customer experience. This will also enable traditional players to maintain a seamless and cohesive customer experience across channels and markets.   

InsurTech is aptly positioned to leverage data. With advances in technologies like AI, Machine learning combined with Big Data, we can expect to see more personalization in service delivery, improvements in fraud mitigation, wellness, while also helping crunch data to curate highly personalised products for specific customer cohorts.    

What are some of the key offerings and innovations we can see from your company in the near future?  

Retail insurance will continue to be our focus area. We will see more growth in rural markets, digital channels and our partnerships with various banks and NBFCs will pick up pace in the near future.    

What has been the biggest achievement for your company in the last two years? And How does your company stand out from the competition?  

We got listed in December 2021, with a strong promoter base. We also scaled up operations to meet the demands during the Covid years and seamlessly went digital in both policy procurement and policy servicing, settling close to 15 lakh claims in FY22 even while our offices remained closed due to lockdown. 

We remain the largest player in the Retail Health segment, providing 100 per cent in-house claims processing, while not engaging any TPA . Having a network of over 13000 plus hospitals across the country and a pan India presence  with more than 800 branches and over 5.5 lakh agents, we strive to provide a wide range of products to meet the specific needs of customers, including disease-specific products.  


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