India’s 95%  population lacks insurance stated a report by the National Insurance Academy, released on Thursday. Despite efforts by the government and the insurance regulator to increase coverage, it seems to be going in a land of nowhere.

Irdai Chairman Debasish Panda urged the sector to follow the same procedures that resulted in the UPI’s enormous success, bank account openings, and mobile penetration as he unveiled the study.

Panda stated that in order for the country to get universal insurance coverage by the time it celebrates 100 years as a republic, mandatory natural disaster insurance in high-risk areas, as suggested by the research, is required.

The NIA report synopsis

About 95 percent of the 144 crores people living in the country are unaccounted for, says the report.
Given the rise in emergencies and other climate-related disasters to affect the nation, the high prevalence of not having insurance coverage becomes significant.

It further stated that 84% of those in low- and middle-income groups and 77% of those in coastal areas, tier-2, and tier-3 cities do not have property insurance.

Additionally, the research recommended that farmers who have taken out bank loans be required to purchase crop insurance, with premium financing provided by agri-input suppliers and microfinance organizations.
According to the report, which provided category-specific insurance gap analysis, the annuity and pension protection gap is now at a high of 93%.

Regarding health insurance, the research stated that 73% of people lack coverage and urged industry associations, NGOs, and the government to work together to develop micro health insurance with more straightforward options. The coverage of pensions and annuities is likewise lacking, with only 24% of workers registered in employee retirement plans.

Notably, according to the survey, the penetration rates for low-income individuals and lower-middle-income segments are a pitiful 14% and 25%, respectively. Due to rising exposure, greater digital usage, growing connection, and the fact that 62% of customers want to reduce their cyber risk, the cyber protection gap is fast widening across all industries.

Since its establishment in Pune in 1980, the National Insurance Academy has grown to become the premier hub for executive education, research, and study in the fields of insurance, pensions, and allied fields not only in India but also in Africa, the Middle East, and Southeast Asia.

Insurance Statistics and data

Although the Indian market for health insurance is expanding, there is still inequality in the country’s general distribution of health insurance plans. Additionally, the public healthcare system is severely underfunded, so for Indians, the best remaining alternative is to purchase private health insurance from companies that dominate the health insurance market.

In 2021, 514 million individuals in India were enrolled in health insurance programs; this represents only 37% of the nation’s population.

In India, there are almost 400 million people without access to health insurance.
It is believed that either voluntarily or through public health insurance, 70% of the population is covered. The remaining thirty percent of people, or more than 40 crore, do not have health insurance.

According to the Economic Survey 2022–23, the Indian government allocated 2.1% of GDP for healthcare in FY23 and 2.2% for FY22, compared to 1.6% in FY21.
According to the same poll, the percentage of money spent on healthcare services grew from 21% in FY19 to 26% in FY23.

Approximately 48% of India’s overall healthcare spending in the 2019 fiscal year came from private funds. This number is significantly lower than the 64.2 recorded in FY14.
Health benefits paid by Social Security increased from 6% in FY14 to 9.6% in FY19.

Health Insurance Report for India

In India, the availability of health insurance is far from adequate. Over two-fifths (41%) of   families have at least one regular member who is covered by health insurance, according to statistics taken from the National Family Health Survey India report. In this age group, between 2019 and 2021, just 30% of women and 33% of men are covered by health insurance or funding programs.

Of those having insurance, nearly half (46%) are covered by a state health insurance program, and around one-sixth (16%) are under the Rashtriya Swasthya Bima Yojana (RSBY). The Employee State Insurance Scheme (ESIS) and the Central Government Health Scheme (CGHS) provide coverage for around 3-6% of women and 4-7% of males.

The Andaman & Nicobar Islands and Jammu & Kashmir have the lowest coverage (less than 15%), while Rajasthan and Andhra Pradesh have the largest percentage of families covered by health insurance or finance schemes (88% and 80%, respectively).

The Covid 19 Impact on Insurance in India

The COVID-19 pandemic has changed the rules for India’s health insurance market. Indians have been more likely to have health insurance due to the higher risk of hospitalization and the expensive medical care in private hospitals.

The worldwide health crisis served as a wake-up call for Indian authorities and the general people to prioritize health insurance coverage.

2020 saw a 40% increase in health insurance premium collections as a result of the public’s intense panic to protect themselves against the Covid-19 epidemic.

In July 2022, healthcare insurance grew by 34.2% year-to-date, compared to a gain of 9.9% in the same month the previous year, during the lockdown.
The Indian market for health insurance was expanding at a CAGR of 24%, but during the pandemic, it increased by roughly 34%.

In terms of premiums collected, health insurance emerged as the most popular category among all non-life insurers in the first half of 2020–21, which spanned from April to September.

India has an extremely diverse healthcare and medical system, with coexisting governmental and private insurance providers. India’s health insurance market has seen a significant digital shift thanks in large part to private firms.

These days, there are many plans that include a wide range of digital perks, such wellness points, telemedicine, e-consultations, second opinions, online plan purchases via websites or mobile apps, etc.
PWC’s Health Insurance Consumer Pulse Survey indicates that while traditional and offline channels have experienced a considerable decline in sales, digital insurance is growing at a rapid pace, accounting for around 20–30% of the gain in sales.

According to PWC’s research, insured individuals anticipate simple and practical digital channels from intermediaries and insurance companies at every point of their journey.

Why Should India change its Insurance stand?

Diabetes, heart attacks, and a host of respiratory conditions are common in India due to lifestyle factors. Medical research and the use of advanced medical tools have made all these ailments relatively manageable in India, but the expense of treatment is going through the roof.

Every year, non-communicable diseases (NCDs) claim the lives of around 5.8 million people in India. In 2021, the leading causes of medical claim costs in Asia were cancer (55%), disorders related to the circulatory system (43%), and Covid-19 (36%), according to the MMB Health Trends research.

The conditions with the highest frequency of claims were Covid-19 (34%) and gastrointestinal disorders (36%), followed by respiratory diseases (47%).
India’s households spent about INR 120 billion on medical services and healthcare in FY 2022, according to the CMIE-CPHS report.

Recent statistics from the Niti Aayog Report indicates that only 95 crore Indians might possibly be covered by the country’s current health insurance programs. These programs include social health insurance plans, private insurance plans, and government-subsidized programs.

Health insurance coverage is becoming less of a luxury and more of a necessity due to changes in healthcare expenses and lifestyle. Health insurance policies are a great option to prepare for such situations in such a case.

Regular monitoring, cashless coverage, and the greatest treatment options at their networked hospitals are all guaranteed by health insurance. All pre-existing medical disorders, including blood pressure, diabetes, asthma, etc would also be covered by a comprehensive insurance policy, along with critical sickness and personal accident insurance.

With many developments taking place to digitalize India, a click away insurance will make it easily accessible to every citizen. And the increasing cost of medical services will definitely prompt them to take this step and get themselves insured. Being a responsible citizen, make sure you have your insurance updated.