Wake Up Call For Health Insurance

2020 has been a year like no other. As the economy struggled to find balance amidst such turbulent times, many industries competed for survival, let alone growth. However, with health being the central theme through this pandemic, the health insurance industry remained resilient and observed monetary and non-monetary growth opportunities. The outbreak of COVID-19 served as a wake-up call for customers as they realised the importance of having a health cover to protect themselves in uncertain situations. Health was never an individual subject, but it is now, even more, a family subject. While the insurance industry has seen some stand-alone health insurance players quadruple in size in the past five years, only 3-4per cent of the entire population remains covered by individually paid retail health insurance, depicting the wide scope for growth and innovation ahead of us.

The health insurance industry witnessed growth in various aspects during the pandemic with multiple positives. Here is a roundup of this year from an industry perspective:

New Trends:

In terms of new trends, 2020 was a year of innovation and inclusion. There was a paradigm shift in the functioning of the industry. More focus was placed on digital remodelling and contactless sales and service to satisfy the need of the hour. The influx of digital technology advancements like AI-based voice assistants, phone apps, and chatbots became the norm, with many companies trying their best to adopt these technologies for seamless customer acquisition and service. The existing customer interaction model was replaced, with a newer improved model where insurance agents could sell products and interact with customers taking into account the restrictions placed due to the global pandemic. This upgrade allowed the industry to explore potential new trends from a tech, digital, and product distribution and launch perspective. There was an increase in the number of first-time buyers who placed significant importance on family insurance rather than just individual health cover. Customers showed a willingness to buy health insurance policies based on affordability and income. The government's increased focus on universal health also provided a boost to the health insurance industry.

Learnings:

Overburdening and overdependence of the healthcare sector provided ample learning opportunities for the health insurance industry as customers sought solace through their health insurance cover. This situation allowed the industry to learn and improve throughout the pandemic. Some of the major lessons learned during this pandemic were – 

The health insurance industry needs to place importance on 'health before ‘insurance’, as the name suggests. Insurance companies have to be readily available for the customer, be health influencers in addition to financial protectors, and provide continuous support tothem.

Technological advancement has no alternative and is no more 'good to have'. Internal processes have to be technology-enabled to provide smooth and consistent customer service.

Now more than ever, there is a need for an upgrade in digitalisation and customisation of services for policyholders.For instance, during the lockdown, digitization helped create transparency in the underwriting process, which acted as a boon.

Insurtech tie-ups are indispensable. Insurtech has served the industrywell by introducing technology and convenience to various aspects of the health insurance industry, such as distribution, adjudication of claims, servicing, analytics, etc. The rise of Insurtech ventures allowed the industry to introduce facilities such as bot facilities, voice bots,  and health insurance on WhatsApp.

Remote working has led to more benefits than just cost saving. The Health insurance industry was able to access untapped workforce potential through women employees, outstation employees, and employees that faced a physical challenge.

New Shifts:

Previously, the health insurance market was segmented between theage group of 30 and 50. However, 2020 witnessed an inundation of younger customers. This shift could be partly attributed to the pandemic related anxiety, but it is essential to acknowledge the awareness, knowledge, and clearer understanding of needs shown by the younger customers. Health insurance cover is no longer viewed as a product for crisis, but is a necessity. Due to the COVID-19 outbreak, people have had the chance to understand the importance of the health-related sectors, which has driven the notion of health security and health management. People are now more confident in the healthcare sector after observing the commendable assistance and support it has provided during these trying times. Additionally, the regulator allowed prompt testing of new products and features, which aided in providing health insurance products asper the evolving healthcare needs.

New Challenges:

The pandemic posed a huge threat to the way people carried out their daily lives before 2020. This situation led to challenges with mental health and upkeep of physical health. Looking at the ‘new normal’ where cabin-fever was a real concern, the industry offered various initiatives that allowed customers to meet their health goals and set new ones from within the confines of their homes. Priority was placed on mental health by making available services that supported the mental well being of the policyholders. Along with that, to aid the customers in maintaining their fitness, practical as well as lockdown-friendly benefits were also provided.

New Norms:

Digitisation and customisation have become the new norms and were adopted by all the players in the industry. Being able to digitally acquire, serve, retain, and engage with the customers while also extending the same facilities to the distributors will continue to be a vital responsibility of the health insurance industry players. There are further excellent opportunities through service offerings such as e-pharmacy and telemedicine which will be explored in2021. Apart from digitisation and customisation, health insurance companies should play a more engaging role rather than a reactive one as far as the customer is concerned. For instance, OPD coverage through health insurance policies should be made a new norm. This provision will allow the health insurance industry to seize the opportunity to create much better category advocacy with the customers. These measures will help strengthen the beliefs in the health insurance segment, thereby enabling health insurance companies to act as health influencers and help customers manage their condition while avoiding health crises, which will be a winning situation for both customers and insurers. Setting up systems that will help detect fraud-based abuse and allow better management of claims should also become a norm.

New Outlook:

For the year 2021, the focus should be placed on increasing penetration while ensuring that people are adequately insured. It is prudent to create further awareness regarding the advantages of a health cover that provides necessary and adequate health security based on current circumstances. Health industry players should also further evaluate the need for segment-specific products, bite-sized products, and such. Sustainable business objectives while prioritizing health for individual and family needs will also determine the course of the industry in 2021.

It is needless to say that technological and digital advancements with customization benefits and a ‘health’ first approach will remain the key differentiators in 2021. In 2020, the health insurance industry has changed the way it functions and the adaptability displayed is a testament to the customer first motto of the industry, which will only further evolve in the coming year.

 The author is CEO, Aditya Birla Health Insurance