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Allowing life insurers to sell health insurance products to increase health retail penetration: Report
IRDAI Thinking of letting live insurance companies for sale health insurance Compensation products, either distribution only or manufacturing and distribution.

Regulator IRDAI has indicated that the same is under consideration but no decision has yet been made.

According to a report by Motilal Oswal Financial services, the primary purpose of the move is to increase retail penetration health In the country it is only 4%.

to go deep Retail health insurance In India it is still weak despite nearly 30 players selling such products. Only 4% of India’s population has retail health policies.

Out-of-pocket spending accounts for 63% of Health Care spent. Given this background, IRDAI looks forward to accelerating the pace of penetration and bringing every household in India to health insurance Umbrella, the report said.

In the near term, SAHIs (independent health insurance companies) will remain in a beneficial position if life insurance Players are allowed to launch and distribute health insurance products. SAHIs dominate retail health insurance, with a market share of about 53%, followed by PSU/Multi-line private insurers, with a market share of 23-24%.

The report added that health health institutions saw their market share increase to 53% in the fourth quarter of fiscal year 22, from 38% in the first quarter of fiscal year 2020.

In a recent interview, the president of IRDAI debashish panda The regulator said he will not implement the same in a hurry and will come to a decision after extensive deliberations with all stakeholders.

Allowing life insurers to sell health insurance products to increase health retail penetration: Report
Life insurance players range

Life insurance companies see indemnity-based health insurance sales as a great opportunity because they mostly sell health insurance products globally. The report stated that health insurance products can be a complementary offering along with life insurance products.

Underwriting practices will not differ materially for health insurance
Compared to life insurance products, so companies do not see
The main challenge in this aspect. The main challenge is to replicate the hospital network links that health institutions for health have built over the years. The report added that life insurers will take a long time to replicate this.

Motilal Oswal believes that in terms of capital requirements, existing life insurance companies are in a better position due to their existing distribution network, and therefore require relatively less capital.

Some media reports suggest that allowing life insurance players to sell health insurance could be beneficial for companies (such as ICICI Pru, HDFC Life, SBI Life, Bajaj Allianz and Aditya Birla Life) that have group entities in the health insurance space. For other companies, the reliance on health health institutions and multi-line private public insurance companies will be greater.

The report highlighted key points from this move which include a big enough opportunity for both Life and health insurance players to grow together. Some life insurance companies have previous experience selling these products. The main challenge for life insurers is to emulate the claims processing capabilities of NHS and build a hospital network while HBOs have more advantages in terms of distribution through individual agents and product development. Upon receipt of the required permission, any meaningful increase will need a few years.

Allowing life insurers to sell health insurance products to increase health retail penetration: Report
The advantages enjoyed by health institutions for health to continue

Despite having 25 other players (private and multi-line players in PSU) selling retail health insurance products, SAHI was able to increase its market share to 53% in Q4 FY22 from 38% in Q1 FY22 2020 in the Retail Health category. If life insurers are allowed to distribute health insurance reimbursement products, smaller players, who do not have public insurance or a health insurance group company, will explore partnerships, health insurance organizations, given the
Size, will have the upper hand, the report said.

Health institutions in good health, with its spread, especially with individual agents
Developed for faster growth. Most of their agents already sell life insurance products. Over the years, health organizations of health have built strong in-house claims handling capabilities and fraud detection mechanisms. The report added that they had built strong relationships with hospitals, which allowed them to process claims in a prompt and efficient manner.

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