In an effort to rationalise and advance healthcare insurance, the Insurance Regulatory and Development Authority of India (IRDAI) introduced several measures.
Insurtech gained momentum in 2022 with insurance companies and startups adopting more cutting-edge technology and digital solutions to improve operational efficiency and customer experience — from policy approval to claim settlement and everything in between. Driven by the pandemic, healthcare, in particular, accounted for a sizable growth of the insurtech sector during the year.
A number of factors such as regulatory changes, greater digitisation, hyper-personalisation, the launch of custom-made products, and an increase in customer value are creating new growth opportunities for insurtech companies and enabling them to keep pace with the rapid disruption taking place in the sector. At the same time, the government’s ‘Insurance for All by 2047’ mission is accelerating insurance penetration in the country, enhancing the ease of doing business, and making the industry more investor-friendly.
So what did 2022 mean for health insurance? My answer is two words — holistic wellness.
Let me explain further. On the one hand, the insurtech sector incorporates the four key principles of sustainability, transparency, inclusion, and diversity to drive innovation, customer satisfaction, and business growth. On the other hand, the industry increased health insurance penetration by using technology to improve efficiency, streamline processes, lower costs through new pricing strategies, and make products more accessible, among other actions. These are in line with my vision of holistic wellness for the health insurtech sector.
The government, on its part, has been supportive of several initiatives, including the creation of a much-needed regulatory sandbox mechanism that allows companies to test new insurance products and services.
Here are some of the important developments that took place in the insurtech sector in 2022:
In an effort to rationalise and advance healthcare insurance, the Insurance Regulatory and Development Authority of India (IRDAI) introduced several measures, such as stipulating management expense limits for insurers, the go-ahead for introducing new insurance products and covers without its consent, making KYC mandatory for claiming insurance, including mental health cover in health insurance policies, and more. In 2023, I expect IRDAI to announce more initiatives in health insurance benefiting both insurers and customers.
Health insurance has always operated on a standard model — one size fits all. This year, however, the healthcare sector saw an increase in demand for customisation, which resulted in tailoring group insurance policies to the specific needs of the workforce. Much of the demand for such products came from new-age businesses across industries. Going forward, as more insurtechs enter the market, existing players will be forced to design new customer-centric products and forge partnerships with technology enablers both within and outside the sector.
Demand for telehealth consultation
With many companies functioning in either a work-from-home or hybrid model, the demand for telehealth offerings saw a further spike in 2022. Keeping in mind work-related injuries or medical emergencies, companies are incorporating telehealth consultation in their employee benefits package to provide the workforce with easy and timely access to healthcare professionals and help them to recover quickly. Ensuring the health and wellness of the employees leads to lower absenteeism and, consequently, higher productivity.
The year 2022 also saw the emergence of Flexi-benefits or a Flexible Benefits Plan where employees can decide the elements of CTC (cost to company), thus allowing them to pick and choose benefits such as medical and travel expenses. This can also include benefits like OPD consultations, hospital cash insurance or a fixed sum insured for each day of hospitalisation of over 24 hours, extended coverage for immediate family members, and super top-up for increased coverage amounts. Flexi benefits are cost-effective as they give employees better control over their salaries and savings.
Accelerated digital solutions
During the year, the insurtech sector continued to adopt digital solutions to accelerate various processes, including underwriting, claims, and disbursement, and improve customer outreach and satisfaction. New-age insurers simplified online policy documents and offered multiple language options to make it easier for customers to understand and buy policies that will protect them and their loved ones. The multiple-language option will help create greater awareness and penetration of health insurance across the country.
The way forward
I believe 2022 has laid the groundwork for what we can do in 2023. One important area is to raise awareness in the corporate sector, especially among medium and small enterprises, about the need for “inclusion in insurance”. It means providing out-of-the-box benefits such as insurance for maternity care, IVF procedures, sex reassignment surgery for LGBTQ employees, and mental health treatment, among others. Indeed, there is no end to what companies can offer their employees in terms of group health insurance or employee benefit packages. Finally, the growth of any company depends as much on the well-being of its employees as it does on a healthy balance sheet.
(The author is Co-founder and CTO, Plum)