Bima Sugam, use and file initiative: Here are recent decisions to increase health insurance penetration

The prevalence of health insurance in India remains low, and government-spending on healthcare is one of the lowest in the world. Only 18 per cent of people in urban areas and 14 per cent in rural areas are covered under any kind of health insurance scheme, as per reports. However, recent regulatory initiatives like Use and File are expected to provide greater flexibility to insurers in product pricing, and thereby lead to increase in insurance. In the Use and File procedure, insurers can introduce their products in the market without waiting for the regulator’s prior approval. This avoids a longer waiting period in providing innovative insurance solutions to the customers.

What are the other initiatives to increase health insurance penetration?

In September, Insurance Regulatory and Development Authority of India (IRDAI), reduced the number of returns to be filed by insurers for health insurance in a year. This move was taken to promote ease of doing business for insurance companies. The move also strives to decrease the compliance burden for all regulated entities.

The general and health insurers will now be required to file 8 returns and life insurers will have to file 3 returns. According to IRDAI, this move will help insurers in focusing on their business instead of a plethora of compliances and in turn will lead to increase in health insurance penetration in India.

Recently, IRDAI has approved the “Bima Sugam”, a digital platform where all the health and life insurance policies will be listed. Individuals will be able to purchase these policies from this platform. Aggregators such as PolicyBazaar, banks, brokers and insurance agents will be the facilitators for selling insurance policies via Bima Sugam to the people.

Bima Sugam will require nearly Rs 85 crore as initial capital. Insurance companies are expected to be the major shareholders of this insurance platform.

According to Statista, the market size of the health insurance sector in India was about Rs 370 billion in the financial year 2018. The figure was expected to cross over Rs 2 trillion by the financial year 2030. The growth was projected taking into consideration rising income levels, growing lifestyle related health demands, and increasing awareness in urban areas.

Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook , Twitter and Instagram .