'InsurTech Has Bought Positive Change in the Insurance Ecosystem'

Insurtech is allowing organizations to utilise technology for solving problems of MSMEs and ensuring high level of serviceability through economies of scale. "Tools like WhatsApp and digital cards are used for fast claim service. Dedicated portals are used for frictionless member management," was pointed out by Anuj Parekh, Co-founder and CEO, HealthySure in an exclusive conversation with Faiz Askari of SMEStreet.

Here are the edited excerpts of the interview.

• How has technology transformed the business of health insurance?

There are quite a few areas in which technology is transforming health insurance - 

Insurance Claim Support – There are a few start-ups focusing on claim support for health insurance. Claim filing is now also digital and paperless with the use of technology. Claim tech companies are also ensuring that proper eligibility checks are run before getting admitted to a hospital resulting in reduced incidence of out-of-pocket expenses. 

Education and Awareness – InsurTech are focussing on creating high level of awareness for health insurance and healthcare. Complex insurance constructs are simplified so that people are aware of benefits they are entitled to. These InsurTech also increase awareness of healthcare issues and also promote a healthier lifestyles through technology platforms. 

Solving for out-of-pocket expenses – InsurTech are innovating healthcare products and bundling OPD covers and other services into health subscription plans. As a result, people generally get a holistic healthcare program when they subscribe to these services. 

Telemedicine – Telemedicine has the potential to provide primary healthcare access to even the most remote locations. Some InsurTech have integrated telemedicine services within their platforms. This lets people access quality healthcare professionals even in villages. 

• What is the role of HealthySure, are there any special guidelines provided by the regulatory body?

HealthySure is an employee benefits InsurTech platform for SMEs, start-ups and corporates in India. The platform offers a suite of group health, life and accident insurance products with curated health and wellness programs. We are regulated as a corporate agent by IRDAI for insurance services and supplement these with a suite of healthcare products so that an employee and his family members have holistic healthcare access that incudes health insurance. The guidelines from the regulator are evolving and we are looking at quite a few positive changes to drive insurance penetration. 

• How do you look at the SME and MSME sector with respect to Insurance penetration?

The MSME sector has very low group health insurance penetration. And this is not only because of cost of health insurance. 

The challenge for MSME sector from an insurer standpoint is the identification of legitimate groups. There have been instances of misuse in group health insurance wherein the only purpose of forming a group had been to avail group insurance. This is done mainly to get an insurance coverage when members were refused insurance due to underwriting risks. As a result, insurance companies have been hesitant to completely open up group insurance products and have a minimum eligibility of 7 employees for group health insurance. 

Another challenge is the serviceability levels. This includes quote negotiation, member management, claims settlement and policy education. Generally, an intermediary like a broker or an agent is expected to support the groups on these services. However, the market is highly price sensitive, and the margins earned by intermediaries in group health insurance are low and the serviceability suffers as a result. With an even smaller ticket size for MSMEs, this market is not lucrative for distribution. It hardly makes any business sense to service a group health insurance to a 10-member organization as the premium cost would be around Rs 20,000 and the intermediary revenue would be around Rs 1,500 only. 

• How has the intervention by HealthySure/InsurTech impacted the employee benefits?

Insurtechs are bringing technology to solve problems of catering to MSME markets and ensuring high level of serviceability through economies of scale. Tools like whatsapp and digital cards are used for a fast claim service. Dedicated portals are used for frictionless member management. There are also fullstack healthcare services integrated in platforms to provide comprehensive healthcare not limited to health insurance. These platforms thus have enough data points to help with newer underwriting models and possibly bring down the cost of health insurance further. 

• What is the scope of technological interventions that could improve overall coherence in the health insurance sector?

Insurtech is bringing positive change to the entire insurance ecosystem. However, unless the ecosystem supports transformational changes and adopts open technologies, it will still be a difficult to see efficiencies. 

On the part of insurance companies, there must be a liberal approach towards underwriting group products. While there are risks involved, these can be mitigated through newer underwriting models that rely on information beyond demographics. With the introduction of Health IDs by the government, this might become easier. 

TPAs have a big scope to implement technology in their processes. There is considerable manual effort involved in verifying claims and bills for servicing claims. Bringing in the right set of technologies like AI/ML tools to manage claims can go a long way to make TPAs more efficient. 

• Any regulatory provisions that could help InsurTech better serve employees?

The regulator IRDAI could look at opening up regulations with respect to insurance payments. Insurers could be provided flexibility to collect payments through InsurTech in the distribution space. Currently insurers are required to directly collect payments for issuing insurance policies including employee insurance. The regulator should also standardize monthly based subscription payments that can make it easier for organizations to afford insurance and manage cashflows. This will enable a seamless ecosystem for organizations to enable insurance and promote penetration. 

The democratizing of payments has helped many sectors drive penetration and growth, Indian SAAS being the biggest growth story. The same can be replicated through InsurTech as well.