Team AckoSept 25, 2023
The world wasn't prepared for COVID-19. However, people resisted, survived, and are now dealing with the new normal. Now, people have become more aware of life's uncertainties and are choosing to be proactive instead of reactive. For instance, there’s an increase in awareness and willingness to avail of comprehensive health insurance coverage. Also, recent technological advancements enable better health products at an affordable cost. This article sheds light on such trends witnessed by the health insurance sector in 2022.
Following are the three major obstacles faced by the health insurance industry in the recent past.
Many people perceived, and still perceive, the health insurance industry as being opaque and complex. The health insurance market expanded by 30% in 2020, but stagnated at 18% YTD (year to date) as of October 2021. A lack of knowledge and understanding still restricts purchasing of health insurance policies.
The healthcare ecosystem greatly benefits from standard processes, including evidence-based medicine, adherence to protocols, prescription drug policies (particularly antibiotics), etc. Customers gain a lot from this. However, while a standard approach may work well for treatment, it may be challenging for health insurance customers. For instance, claims and policy pricing require a more personalised approach to be effective.
Rising medical inflation has led to higher health insurance premiums. This is due to the fact that the price of medical care, supplies, and medications is increasing faster than the price of other goods and services. As per a financial report, India witnessed a medical inflation rate of 14% in 2021. It was the highest among other Asian countries for this timeframe.
The health insurance sector has gone through a paradigm shift in recent years, especially due to two major factors—technological advancements and the COVID-19 pandemic. This has led to the emergence of the following trends in the health insurance sector.
Numerous tasks are being automated, enormous volumes of data are being managed, and predictive analysis is being performed, all thanks to Machine Learning.
Additionally, automatic claim verification, quicker data access, cheaper administrative expenses, privacy, security, and scalability are made possible by Blockchain technology. As a result, almost everything—from business models and consumer experiences to operational procedures—has been automated and digitalised.
Coverage for mental health issues
A survey in India (with 1027 participants) found that clinically significant symptoms of anxiety and depression were present in 17.9% and 40.7% of the participants, respectively.
As a result of the increased demand for such services and the directive issued by the insurance regulator—IRDAI, health insurers are now covering mental health services such as professional consultation, access to meditation applications, etc., to deal with mental trauma.
Special health insurance products
The pandemic has made it crucial to purchase a comprehensive health insurance policy. More people are now aware of the value of getting a good health insurance plan. As a result, insurers introduced numerous new health insurance policies in response to the wants and needs of the customers. For instance, Corona Rakshak and Corona Kavach policies were introduced to provide standard coverage at a lower premium.
Artificial Intelligence to recommend health plans
Location, age, health, and other factors significantly affect how much health insurance costs. Customers must be aware of important factors affecting their coverage and premium while buying a health insurance policy to make an informed decision. In this regard, many health insurance providers employ Artificial Intelligence to recommend the plans that will work best as per the patients’ needs and offer insurance premium calculators to increase transparency.
Increased insurance penetration
The digital nature of modern insurers aids insurance penetration. Also, government-led public education initiatives, such as the Aayushman Bharat Program, in rural and urban areas offer affordable health insurance to cover self-employed people and help increase penetration.
Tailor-made health plans
Because health insurance can be perceived as tricky, customers looking to buy a plan may not know which questions to ask. Thus, many health insurance firms proactively contact them through various touchpoints (mobile number, email, enquiry forms, etc.) and provide solutions.
These personalised recommendations based on data triggers help to inform, educate, and motivate the customer to make a better decision. They can also encourage self-service, improve health outcomes, and encourage policyholders to receive appropriate and timely treatment.
Digital claim management
As a result of technological advancements, the health insurance sector has mostly transitioned to a digital world. With real-time claim processing, Artificial Intelligence assists insurers in improving claim management. Even rural locations can now avail claims smoothly thanks to insurers incorporating technology into their operations.
Seamless flow of data
For networked healthcare systems, data interoperability is essential. This can be achieved with the help of Blockchain technology, where healthcare services can be implemented through the seamless flow of data across all parties. For instance, with this technology, medical information is collected into a single record readily available to healthcare professionals, insurers, and policyholders. It is beneficial in data analysis and trend forecasting as well.
The regulator and insurance providers are aware of the fact that policyholders may delay visiting the doctor, which leads to more health complications and higher claims.
It is thus essential to offer incentivised coverage that will urge customers to seek medical help in time rather than delaying it and increasing the total cost of treatment. For example, insurers are providing incentives in the form of "health coins" or free preventive annual health check-ups to encourage better health and timely treatment.
Yes, the cost of health insurance did go up in 2022. Three out of five Indians saw an increase in their health insurance rates of over 25% in 2022 following a significant hike in 2021, with 38% experiencing a nearly 50% increase.
The top 5 issues the insurance sector faces are lack of faith, cybersecurity, mismanagement, financial instability, and delayed services.
Yes, cyberattacks are one of the threats that the insurance industry is facing; this sector is being increasingly targeted by ransomware attacks.
Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions.
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