Health insurance will soon see higher penetration with
increased awareness among the rural population. The industry is currently
growing at 16 per cent. People from tier-II and -III centres buy health insurance
products to ensure their financial stability. As awareness spreads further, the
industry will grow at a much higher rate, says V Jagannathan, Chairman and
Managing Director, Star Health and Allied Insurance Company. In an interview to Business
Line he said Star Health hopes to touch gross premium collection of
₹1,900 crore in the current financial year. Excerpts:
Being the first stand alone health insurance company in
the country, what is your comment on how the sector has been faring in the last
few years?
Health insurance in India has huge potential, but largely
untapped yet. Healthcare spend in the country is estimated at ₹2,00,000 crore,
whereas the penetration of health insurance remains very low mainly on account
of lack of awareness among consumers.
Thanks to various State and Central government schemes, 15
per cent of the population is covered under one or other health scheme. Out of
that, only 2.2 per cent of the population is covered under private health
insurance.
In 2014-15, the industry as a whole had generated ₹20,443
crore of health insurance premium with 15.6 per cent growth over the previous
year. However, going by the recent metrics from the industry, I can confidently
say the industry has gathered momentum, and will scale new heights in the
coming years.
Is health insurance still an urban phenomenon? What is
your experience in the tier-II and tier-III markets?
All these days awareness about health insurance was
prevalent only amongst select urban population, and people in rural areas are
mostly unaware of its advantages.
Now the trend is gradually changing and people from tier-II
and -III markets also participate in health insurance schemes to ensure their
financial stability, so much so that we have designed a product to cater to the
needs of these individuals.
In this backdrop, how would you rate your company’s
performance last year?
Last year, we have performed exceedingly well with a premium
income of ₹1,472 crore registering a 35 per cent growth over the previous year.
By this we could secure that distinction of becoming the
No.1 amongst standalone health insurers and 5th amongst all general insurers in
health
insurance premium collection.
Our current market share is 7.04 per cent. Also, our claims
ratio is far below the industry average.
What would you attribute your growth to?
We have an array of innovative products for every section of
society at affordable cost. For example, we recently launched a policy for
bariatric procedures (surgical treatment for obesity). Besides, we have over
800 branches across the country with a field force of 7,000 officials and an
army of agents — the only company having such a huge infrastructure for
marketing a mono-line product. Our network hospitals would soon touch 7,000. We
also have the distinction of retaining 82 per cent of our customer base till
now.
How many policy holders migrated in and out of your
company last year?
During the year 2014-15, through portability our inflow is
three times more than out flow.
When do you think you will make a positive underwriting
profit and how will you get there?
We expect to make a positive underwriting profit in the
current financial year, and complete a premium collection of ₹1,900 crore.
We will continue to steer clear of group insurance business,
as it is not viable. Also, with a favorable incurred claims ratio, by
controlling management expenses and procurement cost, we expect to show a
definite profit in the current financial year.
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