By IndiaHub 
What do you think of Bima Vistaar (an affordable combined product offering life, health, personal accident and property insurance)? Is it likely to dilute each insurance product?
The regulator (Insurance Regulatory and Development Authority of India) has permitted health and term insurance to be sold as a combined product. If Bima Vistaar comes as a combination of life and non-life products, it will not dilute any of the existing products because it is being developed for a specific customer segment. The idea behind Bima Vistaar is to promote insurance inclusion and reach the last mile where affordability is a concern, and insurers without the necessary tech infrastructure struggle to access this segment. It will bridge the gap between what is being offered and the segment of customers looking for an affordable, combined product, rather than having to evaluate three options and not being able to figure out which one to take. It will be better if all three can be offered under the same umbrella on the basis of their needs and requirements. It also becomes easy for insurers to manage and administer. This will complement the existing products and create more awareness, which, in turn, will fuel their growth. This product will also, hopefully, see a great uptake.
Do you think general insurers should be allowed to come up with long-term health products?
Life insurance has historically been a long-term product, so the solvency computations and the way they factor in risk in calculations is different from general insurance. General insurance has been more of a short-term annual contract, though long-term secured loan products are also there. However, in health insurance, hospitals are not within the regulatory ambit and we are awaiting regulations so that they can become a part of the overall health space. The government has invested in the National Health Claims Exchange (NHCX) and insurers are a part of it, but if hospitals also come on board, it will create a lot of visibility and transparency. This will make it easy for insurers to compute premiums and evaluate risk on a long-term basis, which is currently missing. If hospitals come under health regulations and there is visibility in the way procedures are carried out, surgical expenses are factored into the cost, and invoices are inflated, it will help insurers. Currently, we are unable to figure out what we should consider because rates vary from hospital to hospital. If these are regulated, then it becomes easy to compute the premium.
It has been a long-standing demand, but do you think this is likely to happen?
Yes, it favours everyone. If it doesn’t happen, then the way health insurance has been growing after Covid, wherein it has become the fastest growing and top contributing line of business (LOB) in the general insurance space, might be adversely affected. Today, we agree with customers that they do not understand the dynamics at the service provider level. Transparency is needed even by policyholders and claimants—‘If I go to X hospital, what rates will be charged and what will be covered? If I go to Y hospital, how will I be treated and at what rate?’—regardless of their coverage by an insurance company. To evolve and support the ecosystem and achieve the bigger objective of insurance inclusion by 2047, we need some kind of basic regulation just for creating transparency and comfort for policyholders.
The government has tried to introduce a standardised billing format for hospitals. Will it bring in transparency or also reduce costs?
It is not about reducing cost, but making the cost appropriate. Currently, in most hospitals, it has become an additional revenue stream probably because of the high-standard facilities they provide. Some hospitals are not able to provide high-standard facilities, so their costs are lower. As a part of the health ecosystem, the idea is not to bring down expenses, but to bring in transparency. Whether we have to pay X or Y amount, we need to know and, accordingly, it will be built into the prices. Currently, pricing is deprived of complete information. If transparency comes in, it will become easier to price the product and serve customers, even if the claim cost is high.
What is keeping hospitals from onboarding the NHCX?
Perhaps they are also awaiting full clarity on regulations, whether the NHCX will become a part of regulations or there will be a different treatment or method to manage what we want to achieve. If regulations take time and, in the interim, hospitals join the platform, it will become seamless for insurers and service providers to make it work for the customer. It will not only become transparent, but also swift for all providers in the ecosystem, making it easy for claimants.
Insurers are typically blamed for delays in the discharge of patients, but hospitals also share some responsibility. Will the delays continue without the NHCX?
Without the NHCX, it is difficult. It’s because of a lack of transparency and a lack of understanding that the turnaround times are not being compressed, and NHCX can ensure the swift delivery of services by hospitals and insurers. It is a clear must, whether it becomes a part of health regulations or the regulations offer something better. Health regulations are a necessity as early as possible. In the interim, onboarding the NHCX is a win-win for all stakeholders, including claimants. We should achieve both parallelly—health regulations and onboarding of hospitals on the NHCX
For senior citizens, high health insurance premiums are a big issue. Should we have a mandatory health contribution as in other countries? What is the solution to this problem?
No, I don’t see a health fund or pool as a solution because what health insurers are doing is creating a pool, eventually, to serve the aged or even the young population. High premium for senior citizens is not the issue here. The issue is luxury or high standards in servicing or inflation of prices in surgical procedures. Hospital expenses are rising day by day due to more expensive core procedures or higher standards. Everything is being built into the surgical procedure costs.
If the overall expenses rise, insurance premiums also increase because all claimants are served from the same health insurance premium pool. It’s a reciprocal arrangement. We are charging a premium that is adequate to serve the customer. If hospital expenses increase rapidly, there will be a reciprocal increase in premiums, otherwise health insurers will not be able to serve all claimants.
Is there any other way out for seniors because this segment typically drops out of insurance and ends up with its own buffer corpus?
Another option is for premiums to be funded in a way that it doesn’t become an instant burden. We, as insurers, are also coming out with ways to fund the premium. For instance, the premium can be spread over a period of 12 months. You pay a portion every month, but the coverage continues uninterrupted. That is one way to look at it. Second, if senior citizens opt for hospitals with high quality of treatment and 100% success rate, instead of those that provide luxury and comfort, we can create a policy for seniors with low premiums. We go to hospitals to get treated, not to watch large-screen televisions. So, any age group, not just senior citizens, will appreciate this.
Rejection of claims or delay in claim processing is one area where health insurance gets a bad name. Why?
There is a surge in health insurance policies now and health insurance is becoming a pull product. One reason for rejections is the understanding gap. Though policy documents feature what is included and what is not, most customers get admitted without fully knowing what will be covered. With the help of the regulator, we have started sending a 2-3 page document clearly stating what will be covered. The policy has fine print and if someone is not keen on reading such a huge document, at least they will know what is covered in the policy. It should be made very clear to the customer in a format that is easy to understand and using large fonts. As a result, the number of complaints have started reducing. Complaints are of two types—one is the understanding gap, and the second is lack of transparency. If these two get addressed, there will be no unhappy customer. The moment health regulations are introduced and hospitals come within the regulatory ambit, the number of aggrieved customers will just fizzle out.
After Covid, have you seen any change in the customer profile when it comes to health insurance?
We have started attracting young customers, those who are in their 30s. Earlier, in this age group, people used to rely only on employers’ group health covers, but now they have started buying individual or standalone health covers in addition to the employer plans. This helps maintain continuity and takes care of the exclusions that are present at the initial stages of policy purchase. So, the moment exclusions become inclusions that continue to provide benefits, it helps address the gap if someone were to leave their job. Our analysis shows that many young employees have started buying standalone health covers for their immediate families and are relying on employer health plans for their parents.
Are you planning to come up with innovative, hybrid or combo products?
We are in the process of working out a combo product that includes term and health insurance. Second, we have started developing health products for specific customer segments like domestic helpers. Our regular products are there for all age groups, across cities. We are also thinking of introducing more disease-specific products. So, we are innovating wherever we can on the basis of ailments and other health variants, and are trying to introduce term and health insurance products where affordability is not an issue.
All this requires investment, such as building systems or making enhancements in existing health systems. We are very keen to make these investments in infrastructure, technology, and in creating a think-tank of employees who think along these lines. We are planning to tie up with several hospitals and rolling out a product with low premium for senior citizens with premium funding. We want to create comfort for customers so that they can enjoy the experience at the time of claim settlement because only then will it result in end-to-end innovation.
What are your future business plans?
We want to reach out to all types of distributors, focusing on motor, health, commercial lines, property, and crops, wherever we are able to service farmers. So, essentially all lines of business and all geographies, but largely we are entering tier 4 and 5 locations because we are already present in tier 1, 2 and 3 cities. We work with a large number of banks, especially public-sector banks, with 60% of these located in rural areas. As a result, we have 163 brick-and-mortar offices and digitally enabled resources in 200 locations. We are also in the process of undertaking tech integration as the integrator model helps tech-savvy customers who are keen to buy on their own. So we are serving the customers of today and gearing up for tomorrow, where tech comes to the fore.
RAPID FIRE
Q. If you could alter your career choice, what would it be?
I’d be an educator because I’ve always loved taking complex ideas and simplifying these for others.
Q. What is the one thing you would use ChatGPT/AI for?
would use it to boost productivity by automating routine tasks.
Q. If you could go back to the pre-pandemic days, what changes would you make in your portfolio?
I would have significantly diversified my portfolio, invested more in defensive assets like gold, and strengthened my health and life insurance.
Q. Which is the one book you would recommend?
Sapiens by Yuval Noah Harari for its insightful perspective on human history and evolution.