Health insurance industry is expected to grow at about 50 per cent per annum, Insurance Regulatory and Development Authority Chairman C S Rao said here on Friday.

On the sidelines of the First Health Insurance Summit organised by CII, Rao told reporters that the premium collected under health insurance was only about Rs 600 crore when he took over as Chairman of the regulatory body in 2003.

Whereas, during 2006-07 the premium collection was about Rs 3,200 crore, having grown 35 per cent over the previous year.

The figures for 2007-08 have so far not been released but are expected to be well over Rs 4,000 crore.

“The health insurance business is likely to grow by about 50 per cent per annum,” he said.

Rao, who is close to completing his tenure as Chairman of IRDA said: “The health insurance segment has been growing much more than the overall general insurance industry and collection of premium of health insurance now accounts for about 16-17 per cent of the total collection of the general insurance industry”.

He, however, pointed out that the overall penetration made by the industry segment is still low. At present, there are quite a few players offering health insurance and the IRDA Chairman indicated that a few more are planning to enter the sector.

Referring to the high claim ratio witnessed by health insurance companies, he said the ratio could come down if the volume of business goes up. Besides, he felt if the health policies are sold to different age groups, particularly young, the claim ratio could go down.

This is going to be an interesting year for health insurance. While mediclaim will continue to enjoy a reasonable chunk of the market share, we will also see more product innovations particularly related to ‘health income’ type of products which provide fixed payment due to medical situations,” he says. Chak feels that this type of ‘health income’ product, which covers not only the medical expenses but also any related expenses such as transportation cost as well as post operative medical costs can be used as a supplement of mediclaim policies.

Analysts believe that in the realm of life insurance, these additions of benefits will come in the form of health rider contracts. This essentially means options to select additional health protection on top of the traditional life protection under the same policy. “ However, the customers should buy a cover for their health needs after understanding their perceived medical insurance need and not just look into the advantages churned out of higher return on their investment,” cautions C Chandreshekhar, CMO, Apollo DKV.

Another important aspect of health insurance, which many consumers choose to ignore or fail to realise is the importance of a secondary cover. Experts stress that as a long-term plan, it is strongly advisable that you should have an individual health insurance policy as well as for the family. This also becomes important as the health insurance cover, extended by the employer to its employees ,caters to the medical insurance needs of the individual and his/her family till the time he is employed with the employer.

Once he moves to a new employer, the accrued benefits and the terms and conditions change as per the insurance policy at the new employer. “Having an individual policy not only gives you the leverage of a long standing relation but also supports the waiting term requirements for various critical illness and pre-existing diseases,” says Chandreshekhar. Also, to claim the tax benefit u/s 80D up to Rs 15,000 it is important that you should take a separate policy on an above the employers provided health policy.

It is also expected that with detariffing of other portfolios, chances are high for the market forces to take care of the premium rates at which various differential services to be offered. “The consumer will have more choices, but it is always advisable that you should first have a pure health policy and then look out for a mix health insurance with unit linked features,” says Manoj Aggarwal.

So, if you’re looking for a health cover it’s pertinent that you furnish your medical details in full so as to avoid any discrepancy in the claim settlement process. After all health is wealth!

Nandakumar Rajeshirke was suspicious of health insurance when he first heard about the idea three years ago. He had trouble understanding why it made sense to gamble on an unforeseen illness or accident when there was no guarantee he would ever see any money in return.

But his insurance provider, a network of nongovernmental organizations called UpLift India Association, had already earned his trust by supplying him with reliable microcredit to fund his stone carving business in the city of Pune. Mr. Rajeshirke decided to buy coverage for his whole family at 50 rupees ($1.10) per person annually and renewed the plan for several years in a row.

In 2005, his gamble paid off. Rajeshirke’s wife needed a hysterectomy, a procedure that would normally cost 20,000 rupees ($446), one-third of his yearly salary.

“Without insurance,” he says, “I would have had to sell some things from my house or get a loan from someone at high rates.” Instead of facing financial ruin, he paid 6,000 rupees ($134) total and had help navigating the long process through diagnosis, surgery, and medication.

Such plans, known as micro health insurance, are gathering momentum in regions of Asia and Africa that lack public health strategies. These nonprofit programs aim to provide quality healthcare at low premiums on a community-level scale. The idea is that, with creative planning, the poor can benefit from the same protections against risk as the rich.

India is a world leader in this emerging field, with 5 to 10 million people enrolled in micro health insurance nationwide. Fewer than 10 percent of India’s 1.1 billion people have any sort of health insurance, much of which covers only government employees. Poor people usually work in informal jobs or are self-employed, so they are extremely unlikely to be included in employment-related plans.

The Indian healthcare industry has grown manifold during the last few years. Although there is a yawning divide between healthcare facilities available in rural and urban India and in the demand and supply of healthcare services across the country, overall the Indian healthcare infrastructure is fast improving with initiatives by the government and the private sector. The entry of private players has further spurred the development of the healthcare sector.

The striking feature of the sector is that it has the potential to grow at a much faster rate in the foreseeable future and will present new ‘ sectors of opportunity’ within healthcare, which will emerge as growth drivers. The Indian healthcare industry overview indicates it has the same exponential growth potential as software and pharmaceutical industries in the country. Till now only 12% of the opportunities in the Indian healthcare sector have been employed.

With abundant opportunities for businessmen, equipment makers and service providers to invest in curative and preventive services and possibilities of investing in medical infrastructure and medical tourism, it becomes imperative for providers to get a feel of what’ s happening in the industry to make informed decisions on investment options.

The India Healthcare Trends 2008 aims to be an informed view of trends and drivers for the Indian Healthcare industry by delving into how providers like hospitals and physicians conduct their business and the issues they face in doing so, as well as dissect it in terms of what healthcare means to the end consumer.

Currently, STAR Health and Allied Insurance Co. Ltd, is among the very few to offer independent health insurance products. Do you think you have been able to tap the first-mover advantage?

Most definitely. We have made our mark in the health insurance space and our products and services are very well received in the market.

It has been claimed that the Indian health insurance market is estimated to be INR 3,000 crore, but has a potential to grow to INR 15,000 crore in the near-term. How have you planned to maximise your reach and benefits from this enormous potential?

To tap this vast potential we have introduced many innovative products at very competitive premium that cater to all the segments of the society such as:

a)Policy for HIV+ persons b) Senior Citizens Policy c) A long term cash back Policy d)Policy benefiting dependents of NRIs e) Policy for diabetics etc. We also have a large network of over 110 offices supported by a large agency force.

So far there has been no retail focused health insurance player. What is your strategy as regards this market trend?

Our focus is on the retail segment via the agency distribution model. Also unlike many other insurance companies, we have our own claims servicing mechanism, and do not depend on a third party for this crucial activity.

We have a proprietary network of over 3200 hospitals across India to provide cashless facility to our customers. A 24 X 7 toll free call centre is also at the disposal of our customers.

All our claims are handled in-house and we ensure to visit each and every policyholder in the hospital, whenever a claim is reported.

What are your views on the possibility of India developing a National Health Information Exchange? How would it impact the insurance industry?

It would be a welcome move and definitely help health insurance companies in product development and pricing.

How do you foresee the future of health insurance in India? What policy shifts and innovations would you like to see? And what role do you see STAR Health play in it?

It is common knowledge that health insurance is indeed going to be the key revenue driver for insurance companies in the near future. We realized this potential early and are geared to lead from the front in this space.

A few years ago one frequently heard of patients from the middle east coming to India for quality medical treatment, but of late there seem to be a lot of people from developed countries like the US, UK and Canada coming here.

At first health insurance was thought of as an expense and while that does seem to play a role in driving medical tourism to poorer countries…to my surprise I found out that there are other complex reasons…

Patients in Canada (Canada has a free government run health system, something which India can only dream of) have to wait even for an x-ray or an MRI!! I couldn’t quite believe it because here, even though we are a poorer nation, people can can get an MRI almost instantly, if they can afford it. And for an operation a Canadian might have to wait for about 18 weeks. As its free, everyone has to wait, money or not. However Canada’s dental health system runs on private insurance and patients generally get faster treatment.

The Americans feel their system is better because it runs on private health insurance. But its been exposed to some extent by Michael Moore’s documentary Sicko. The film shows how “middle-class families cannot afford medical care and profit-driven insurance giants go to extraordinary lengths to limit payments.” He has also detailed the number of people without insurance and partial insurance and also deaths due to delays in treatment or lack of treatment.

But this is the system that India is heading for! Private health insurance companies here are struggling to keep their head above water and are being finicky about payments. Seeing America’s plight, I wonder what the future holds for us. Right now industry analysts here are saying that once the system stabilizes and more people join the health schemes (few people can afford private health insurance in India) then the insurance companies will make money and everything will be all right.