Since India introduced health insurance in 1985, thousands of health insurance products have been introduced. Despite being in existence for almost four decades, most of these products are flawed and not suitable for those they are sold to.
What is personalized health insurance?
In India, health insurance is still a push product (sold by agents mainly). Why this happens is simple economics. Agents of most companies are highly incentivized by the companies on the aggregate amount of products sold. For example, most companies’ commission on ULIPs (Unit Linked Insurance Plan) is in double digits – over 10% commission for selling insurance. In comparison, real estate commission is around 2% all across India; annual fees for mutual funds (MF) and portfolio management services (PMS) are around 2% in India.
Personalization has taken the world by storm – from our music to our personal care experiences, everything is personalized today. However, we often forget the immense need of personalization when it comes to effective healthcare and financial management.
Since we have some understanding of the state of the health insurance industry in India, it is important to understand what the consumer needs. One should always buy personalized health insurance to suit one’s own healthcare needs. Our healthcare as well as wellness needs are changing on a daily basis, not to mention that the fact our bodies and lifestyle are different and we all have our individual needs. In an era which is still grappling with the perils of a global pandemic, a health insurance alone may not be enough – what we need is a holistic health cover.
Several other insurance providers across sectors worldwide are employing personalized services to garner a larger share of the pie, but more importantly, to reduce costs for the clients. For example Players such as Trov in the US offer the clients an option to discontinue parts of the plan they might not need to save costs, which is not the case with traditional insurance products.
Many players globally are also using Big Data and AI tools to improve services. Cover, a US-based insurance provider, collects data from clients based on a questionnaire to decide which product would best suit the client. It also tracks prices across various products to alert the client in case of a price drop for an ongoing product. This method of advice – based on action – results in offering the right product on the basis of the buyers’ preferences.
We now know what the need is and the benefit and types of personalization. This transformation of insurance offers from physical (traditional fixed product offering) to personalized health insurance is disrupting the insurance industry. This also creates a natural advantage for the insurance companies, in terms of their major target audience – the 20-45 year age group. This age group has the best probability of looking at health insurance products out of interest rather than purchasing them due to a sales push.
Personalized Health Covers at Vital
Vital is a next-generation platform offering personalized, comprehensive, and pocket-friendly health plans designed specifically for its members’ individual needs. They help you live healthier, manage your expenses better, and get rewarded too. It is a simple, affordable product that is easy to understand, and goes beyond hospitalizations to be with you even when you are not sick. It offers personalized health insurance along with doctor consultations, and pharmacy benefits. Besides it also helps you meet your nutrition needs, start your fitness journey with trained professionals, and take care of your mental well-being. It offers an entire range of personal health requirements in one place. Vital has partnered with the best platforms such as Betterlyf, 1mg, Fitternity, Thyrocare, and many more.
In addition, Vital charges monthly subscription fees that are as low as 70% of the hefty annual premiums charged by a standard health insurer, and it is entirely digital. You can be insured in less than a minute and have a personal care manager of your own.
If the results are so obviously positive, why have the existing players not done it already? It is a complex question and the answer is not unitary, but multi-faceted. It is not easy to change the company’s business model to move from a physical fixed product approach to a customized product approach; not to mention the large amounts of legal and regulatory requirements, coupled with the lack of technical know-how. Other largely intertwined factors include:
- Huge capital expenditure to develop trade efficiencies
- Customer data is highly regulated
- Multiple third party involvements
In a globalized economy without borders, where artificial intelligence and big data constantly assess and re-assess risk, traditional insurance policies will soon become obsolete in India where digital penetration is constantly expanding. To satisfy the urges of clients, providers may need to adapt to this changing environment or risk becoming extinct. According to AltexSoft, insurance will become a breathing and living thing that shrinks and scales with time to accommodate the changing risks in the clients’ daily lives.