Indian Life and Health Insurance Industry (eBook)

Novi Dewan absolvierte an der WHU – Otto Beisheim School of Management, Vallendar, den ersten MBA Studiengang, den sie als Jahrgangsbeste abschloss. Sie promoviert bei Prof. Jürgen Weigand am Lehrstuhl für Mikroökonomik und Industrieökonomik der WHU Vallendar.

Foreword 6
Foreword 7
Preface 11
Contents 14
Table of Illustrations 15
Chapter 1: Insurance Industry in India 17
1.1 Insurance – Introduction and History 18
1.2 An Analysis of Evolution of Insurance in India 22
1.3 Dynamic Market Environment for Insurance in India 30
1.4 Authorities and Regulatory Environment 43
1.5 Status Quo – The Indian Market as-is vis-à-vis other Markets 48
Chapter 2: Life Insurance 61
2.1 Industry Outlook and Major Players 62
2.2 Market Opportunities and Challenges – Empirical Results and Analysis 68
2.3 Urgent Needs and Customer Segmentation 72
2.4 Products 78
2.5 Pricing Criteria 86
2.6 Distribution Channels 92
2.7 Communication Strategy 106
Chapter 3: Health Insurance 117
3.1 Industry Outlook and Major Players 118
3.2 Market Opportunities and Challenges – Empirical Results and Analysis 124
3.3 Urgent Needs and Customer Segmentation 128
3.4 Products 134
3.5 Pricing Criteria 142
3.6 Distribution Channels 146
3.7 Communication Strategy 155
Chapter 4: Conclusion 159
4.1 Outlook for the Life and Health Insurance Market in India 160
4.2 Summary of the Best Practices 163
Appendix 167
Emerging Opportunities and Challenges for the Indian Insurance Market 167
Bibliography 181
About the Author 185

Chapter 3: Health Insurance (p. 101-102)

"Industry outlook and the Main Players" for health insurance in India discusses key consumer insights, the health insurance industry in contextual background with the health expenditure in the country, number of uninsured, health insurance premium and policies development over a time line, also exemplifying the main issues and challenges for health insurance in India. The next sub-chapter discusses empirical data via responses and views of insurance executives and knowledge leaders on the outlook of insurance over the next 5 years. The "Urgent Needs and Customer Segmentation" reveals the results of a survey with respect to key consumer insights, and projects these findings onto the S-O-R model. The chapter highlights regional differences in perspectives, needs and attitudes across selected nations in Asia with respect to health insurance.

Furthermore, through best practices, it explicates customer segmentation at a micro level. The chapter on "Product" discusses health insurance product design facets, product development history of the "mediclaim" policy and the concept of managed health care which is gaining momentum in the global health insurance development. The chapter suggests a product range to suit various customer segments and the best practices in product offerings are elaborated upon. "Pricing" discusses the key pricing criteria and the increased importance of accurate pricing in health insurance, supplemented by accounts of policy discussions reflecting the pricing criteria, the premiums charged and the sums insured. "Distribution Channels" primarily discusses the role & contribution of and effectiveness-enhancing measures for TPAs and role of brokers. Finally, "Communication Strategy" concludes with a TV ad-analysis.

3.1 Industry Outlook and Major Players

The Mind of the Indian Consumer

While researching for his book, "Best Guide to Buy Health Insurance", Mr. Suresh Sethi, CEO of RIA Insurance Brokers Private Limited, discovered myths about health insurance that are core to the average, naive Indian consumer. They were – "I will not have to go in for hospitalization, it won’t happen to me." (undying unrealistic optimism with a "sound" backing of faith in the Gods and Goddesses) – "I will buy health insurance when I need it." (unrealistic expectations from health insurance, rooting from low awareness about the purpose that a health insurance policy fulfills and the way it truly works) – When told that a health insurance policy cannot be simply purchased on the occurrence of the disease, as that defies the very purpose of insurance which is meant to cover events that cannot be predicted (illness in this case) and therefore this new found disease would have to be excluded from the coverage, he says "I am smart enough to manage Health Insurance at a short notice, I have contacts and will manage it." (self-confidence beyond realism)

The main inferences that one can draw from the statements above and the current Indian health insurance context are – The average Indian consumer is living in denial as far health insurance is concerned. – He is aware of the existence of health insurance, but is not sure why he would need it "before time". – He has probably heard of the poor claims settlement ratio in the Indian health insurance scenario and fears that the insurance companies are "out to scam him."