HomeTechnology NewsInsurtech and the role it can play in getting Indians to buy health insurance

Insurtech and the role it can play in getting Indians to buy health insurance

While health insurance coverage increased dramatically during pandemic-hit 2020-21, India still has the seventh lowest insurance (life and non-life) penetration among 28 countries. Technology, especially the internet, can change this by shaving off processing time — both in sales and claims — and reaching out to the remotest corners of the country.

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By Vijay Anand  June 20, 2022, 7:08:45 PM IST (Published)

Insurtech and the role it can play in getting Indians to buy health insurance
It took a global pandemic for most people to realise the importance of healthcare and health insurance. While taking care of the first would ensure that people lived better lives, the second would take care of things should illness strike.


And the numbers show it too. According to research by Statista, the number of people with health insurance in the country increased from 359 million in 2015-16 to nearly 515 million during pandemic-hit 2020-21 — an over 43 percent increase. Of this, the largest growth was seen among individuals insuring themselves, up 84.7 percent from 28.7 million in 2015-16 to 53 million  in 2020-21.



However, this is far from ideal.

"Insurance reach is still low in India. Overall insurance penetration (premiums as a percentage of GDP) was 4.2 percent in the 2020-21 fiscal, providing a huge underserved market," stated India Brand Equity Foundation (IBEF), a trust established by the Department of Commerce under the Union Ministry of Commerce and Industry.

The government, as part of its Digital India Mission, has made it easy for those eligible to sign up for public health insurance schemes online, but more needs to be done, to not only spread awareness about the importance of health insurance, but also for ease of purchasing a policy.



And yet, according to 2020-21 annual report of the Insurance Regulatory and Development Authority (IRDA), India, at 4.2 percent, has the seventh lowest insurance (life and non-life) penetration among 28 countries, and fourth in insurance density — a ratio of insurance premium to population.

How can India improve these numbers? This is where technology potentially has a role to play by shaving off processing time — both in sales and claims.

Technology — the internet, to be specific — can be harnessed to make it easier for citizens in the remotest corners of the country to sign up for or access healthcare services — through apps, websites, et al. The same technology can be used to process insurance claims.

"For India to emerge as one of the top insurance markets, we will need to increase the distribution footprint by at least five times — and all of this will need to be done at a low cost. Significant distribution, and therefore, access to multiple products from various insurers in one place, will be an inflection point for India consumers to access as well as experience the right insurance products," says Rohit Sadhu, Co-Founder and COO of Ensuredit.

Also read: View: Can Web 3.0 change the way consumers buy health insurance?

Ensuredit is a fledgling company, founded in 2019, that claims to be an "AI-powered mobile based distribution platform" enabling access to individualised, "curated low cost (insurance) products."

"The pandemic has hit home the realities of how undercovered for risks the Indian population is by and large," said  Sadhu, adding that the immediate hurdle is to ensure "low-cost and across-the-country (coverage); not only in tier-1 markets".

Global management consulting firm McKinsey, in a research report last year, said technology is set to transform the insurance landscape.



"Underwriting and closing a policy may take several days, even several weeks. Once the policy is underwritten, claims management and customer service are cumbersome due to the insurer-centric and paper-based structure ... (this is) a misalignment of interest between the insurers and policyholders," RCG Global Services, a data analytics platform, said in a report last year.

IT services major Accenture too published a note on similar lines. "Consumer needs have evolved and insurers need to expand their offerings intuitively, and in partnership with others to meet these expectations," the company said.

According to Sadhu, Ensuredit has positioned itself to deliver on this objective.
"Ensuredit focuses on enabling the insurance ecosystem by providing systems and tools that help reach out to consumers fast, service them better and build a long term advisory relationship with them. Our system also enables our clients to run a much more efficient and transparent insurance business."

Artificial intelligence (AI) and machine learning (ML) are increasingly being deployed in nearly every sector, from manufacturing to hospitality to services. And insurance is no stranger to it, feels Ensuredit.

"AI/ML and computer vision are some of the key areas Ensuredit focuses on. Our intent is to build applications that make a significant impact on how right products can be provided to the buyers. We are looking at ease of customer onboarding, understanding complexities, providing recommendations based on risk coverage needs, as well as tools to sellers and distributors to help them communicate and service consumers easily," he said.

Also read: Pros and cons of health insurance portability — when and how to port
Note To Readers

According to IRDAI's annual report for 2020-21, India, at 4.2 percent, has the seventh lowest insurance (life and non-life) penetration among 28 countries, and fourth in insurance density — a ratio of insurance premium to population.

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