Data revolution and insurance penetration – To redefine how India is covered

The recently released results from the first phase of the National Family Health Survey (NHFS) has thrown an interesting fact. Data published for states and UTs shows that one in five men and more than one in five women are either overweight or obese . This when looked from the lens of changing lifestyle and environment around in 2020 is more worrisome with non-communicable diseases like diabetes, hypertension and obesity functioning as comorbidities with COVID-19, exacerbating severe outcomes and mortality. To further aggravate the situation, with around 86% of private expenditure on health being out-of-pocket, this not only increases the financial burden but is also pushing more than 50 million Indians into poverty every single year.

Visible changes, but still long road ahead

High medical and hospitalisation costs have triggered a sense of fear in the minds of the people. While this conscious shift in the consumer mindset has put a building block in increasing insurance penetration, with the market share of health insurance increasing to 29.7% in H1FY21 3 as against 26% last year, over 80% of Indians don’t have health covered. Besides, with tedious insurance claims process only 72% claim get the nod. This inevitably further intensifies the mental and financial agony of the patient’s family. With an estimated market size of USD 372 billion by 2022 , there is an urgent need to bridge this lacuna by utilizing technology to increase the insurance penetration and motivate individuals to opt for simplified medical insurance options.

Technology to FEel good, Do Better

The healthcare sector in India continues to face multiple challenges – such as availability, access, affordability, tech optimisation, and data management. However, technological innovations are transforming the insurance landscape across product lines driven by the ‘customer first’ mentality, something which was also echoed in Insurance Technology Adoption Survey 2019 by PwC .

With an acceleration in digital adoption by both consumers and insurance intermediaries, there is increase in thrust to innovate in the insurance sector. While this has blurred the lines between distribution channels, companies are now utilizing technology to forge new business models and revenue streams too. They are also leading the charge on personalisation, applying artificial intelligence (AI) to simplify and digitise insurance, and recommend tailored products to individuals. In a position to identify consumer’s life stage, it is now possible for companies to identify value-added solutions throughout their life cycle in sync with their needs. Additionally, technologies like AI & automation have now made it possible to faster processing of claims in a frictionless and customer friendly manner. At the same time, blockchain backed by real time data capture can help eliminate duplicate or fraudulent transactions. That said, with continues increase in sharing of personal data, insurers will have to be more careful and responsible than ever.

Utilizing data with empathy and responsibly

An increase in digitized personal information in the hands of stakeholders across the value chain has led to increasing instances of cyber threats and frauds. With around 74% of consumers willing to switch their bank or insurer in the event of a data breach 7 , responsible handling of data will make or break the brand thereby impacting the consumers trust. Hence while the companies enjoying high degree of trust will see more willingness from consumers to trade their privacy, their expectation to get some benefits in return will continue to rise. To address the same, insurers have the opportunity to harness that information and develop creative new ways to serve customers by creating a collaborative framework across the eco-system.

Collaboration to better serve the consumers

While the consumer data useful to one business unit of insurer is likely to benefit another, the advent of account aggregators will now make possible to streamline the entire data sharing between institutions – banks, insurance companies, big techs – in safe and secured manner. While such collaboration can also aid address immediate financial need of the consumers at the time of hospitalization, it also gives consumers the power to select the right product as per their need and convenience.

As the insurance industry is “disrupted” by the technology, tremendous opportunities exist. And to capitalize on the same, now is the time for incumbents and the new-age companies to lay the foundation of collaborative framework and aid enhance the insurance penetration in the country.



Views expressed above are the author’s own.


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