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'The Total Health Insurance Market Is More Than Rs 40,000 Crore'

For more than 104 years now, Kolkata-based National Insurance Company Limited has been partnering in the economic development of the country by providing security through its risks cover products. Express Healthcare interacts with NSR Chandraprasad, Chairman cum Managing Director, National Insurance Company Limited to have some insight into the present scenario of the non-life insurance industry in the country and specially the health insurance sector. Excerpts:

NSR Chandraprasad

For more than 104 years now, National Insurance Company Limited has been partnering in the economic development of the country by providing security through its risks cover products. Please share with us your experiences at the helm of this organisation and how do you plan to take this forward.

National Insurance is a 104-year-old dynamic institution in the non-life insurance space of the country. The strong foundation of this company is built and symbolised by trust and performance and we have been continuously innovating and adapting to the changes for the benefit of our customers.

We are proud to mention that despite more than one and half dozen of non life players in the market, National Insurance has been awarded the status of the 'Most Preferred General Insurance Company' in India by 'CNBC- Awaaz Consumer Awards 2009'. However, we are not sitting pretty on the past laurels received, but constantly trying to improve upon our existing performance in terms of business, market share and other parameters by adopting global best practices to remain as a leading general insurance company in the country. The company has undertaken an extensive IT driven Business Process Re engineering (BPR) exercise to improve our operational efficiency and help us towards being a customer sensitive and centric organisation, manage growth profitably, create productive HR capabilities and build durable relationship with our channel partners and customers.

Has the global economic down turn affected the prospects of health insurance business in the country? What is the size of Indian health insurance market and how it is likely to grow in the coming years? What is National Insurance's share in the total health insurance market of the country?

The global down turn has affected corporate health insurance business in the country to some extent because of lay-off of existing employees and stoppage of new recruitments. However, at individual levels health being a necessity, people have not been able to sacrifice their policies, which is otherwise possible in case of consumer goods. The size of the Indian health insurance market is huge. More than 350 million people are insurable in the country. It is estimated that the total health insurance market is more than Rs 40,000 crore. It is expected to grow at CAGR of at least 25 per cent and reach market size of Rs 28,000 crore by 2015. The total health business for the year 2008-09 was Rs 6,625 crore done by 19 players both non- life & standalone. The share of National Insurance Company for the year 2008-09 was 14 per cent.

What is the quantum of first premium income from the company's health insurance business in the last quarter and what are your expectations for the current fiscal? How are you planning to increase the health insurance business in the coming fiscal?

The total health premium for H1 of 2009-10 for the Company is Rs 457 crore against a premium of Rs 430 crore in the corresponding period last year 2008-09 showing a growth rate of six per cent. The total health business collected by the industry for H1 of 2009-10 is Rs 3,950 crore against Rs 3,354 crore for the corresponding period in 2008-09 with a reasonable growth rate of 16 per cent. We are expecting to complete the fiscal 2009-10 with a total health business of around Rs 1,000 crore at a growth of around 12 per cent.

NIC was the first company to come up with a health cover for senior citizens. What has been the response to the health insurance product for senior citizens?

The 'Varishtha Bima Policy' designed for the senior citizens has fared reasonably well keeping in view that the policy is available for a fixed hospitalisation sum insured of Rs one lakh and fixed critical illness benefit of Rs two lakh for named critical illness. A total of 15,000 persons were covered under the 'Vaishtha Bima Policy' during the year 2008-09. However, more than 1.30 lakh of senior citizens are covered under our individual medi-claim policies during the year 2008-09.

As innovation is very important to thrive in today's environment, what are the new health insurance products on the anvil? Do you have any plans to design disease specific product like cancer, diabetes etc product.

With the rise in the cost of healthcare and treatment there has been demand for policies of more than Rs five lakh. We are working out a revision in the existing mediclaim policy for providing cover more than Rs five lakh. In addition, medigap policy, a policy for HIV/ AIDS and a co-branded health policy with 'Tripura Gramin Bank' are also in the anvil. We have no plan at present to have disease specific product like cancer, diabetes etc.

With private insurance players entering the fray with attractive standalone health insurance products what would be impact of such a trend on this segment?

Introduction of attractive standalone health insurance products will add more flavours in the health market generating customer interests and choice. As the market size is huge in the country there is necessity of more products to cater to different segments of the society and strengthening health security in the country and inclusiveness through insurance.

In this area of cutting costs and fierce competition, NIC has put emphasis on creating new distribution and marketing channels by aligning with strategic partners. Can you please elaborate on your pan India marketing initiatives? How are you marketing health insurance products in the urban and semi urban areas of the country?

In addition to the tie-ups with some of the major banks like Bank of Baroda, Bank of India, we have partnered with some NGOs. Recently, we have tied up with Sri Sahaj E-Village Limited under the e- governance scheme to offer customised products in health and other insurances in six states of West Bengal, Orissa, Assam, Bihar, and Tamil Nadu and Uttar Pradesh.

What are your suggestions to boost health insurance in the rural and semi urban areas?

We recognise the fact that future lies at 'the bottom of the pyramid'. Understanding the need and reaching to the rural and semi urban areas through partnership with NGOs/ SHGs with proper products are the options available.

Please share with us your future plans for health insurance segment?

Health insurance is one of the fastest growing segments in non-life insurance sector in the country. It is also the major contributor to our Gross Direct Premium after motor insurance. We aim at becoming a major player in the health insurance market and gearing up to meet the challenge. We have already set up dedicated health verticals and looking at a portfolio size of around Rs 45 to 50 billion
by 2015.