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The Union road transport ministry along national highways connecting Gurgaon to Jaipur, Mumbai to Vadodara, and Ranchi to Mahaulia launched cashless health insurance scheme for injuries on highways to address financial woes that over a third of road-trauma victims in India face from the treatment costs.

Shankar Prinja, associate professor in health economics at the Postgraduate Institute of Medical Education and Research, Chandigarh, who led the team that evaluated this scheme by doing a three-hospital study at the George Institute for Global Health, New Delhi by tracking 2,200 road accident victims found that without insurance, such victims or their households spend on average Rs 25,000 on treatment during the first month after the accident, while the average spending crosses Rs 65,000 in the subsequent months.

The cashless insurance plan on the highways has made a difference. Even when victims had to pay for treatment, the analysis found significant differences in the out-of-pocket, or personal, expenditures on treatment between the victims covered by the scheme and those out of it. Patients with the most severe levels of injuries covered by the cashless scheme had an average personal expenditure of Rs 8,500 compared to the Rs 25,000 by those with comparable injuries not covered by the plan. The scheme, whose premium is paid by the Centre, provided free treatment of up to Rs 30,000 to road accident victims in government-empanelled hospitals easily accessible from the three segments of national highways.

Basis the strong evidence of financial risk protection with the cashless plan, Shankar Prinja and his team have recommended expanding the scheme to cover highways across the country.

In 2000, the private companies were allowed in insurance sector and at present there are 31 general insurance companies in the private sector. There are four state owned companies, viz. New India Assurance, United India Insurance, Oriental Insurance and National Insurance.

For the first time in over one and half decade privately held general insurers have overtaken state owned insurers in market share in April. Private insurers captured 51.63% of the general insurance market and the public sector managed 48.37% in April as reported by Press Trust of India.

In terms of gross written premium (GWP), general insurance industry grew by 16 per cent to Rs.12,206 crores on April 30, 2017. In April, the four government owned general insurers saw their GWP grow by 5.42% to Rs.5,904 crores while the private sector expanded GWP by 27.88% to Rs.6,302 crores, according to data available with Insurance Regulatory and Development Authority of India (IRDAI).

Also, the market share in PSU general insurers is showing a declining trend from the last three years. The market share of PSU insurers come down from 55.09 per cent in FY15 to 53.21 per cent in FY 17 whereas growth in private players rose from 44.91 per cent FY15 to 46.79 per cent in FY17.

The growth in the industry for the fiscal year2017 has been mainly due to increase in crop insurance segment where the private players have shown an increase of more than Rs.400 crores, compared to the insignificant growth for government owned insurers.

Full form of GST is Goods and Services Tax. It is an indirect tax reform which aims to remove tax barriers between states and create a single market.GST will unify all the Central and State taxes into a single tax and would eliminate the surging tax effect or double taxation on sale of goods and services.

Even as 95 per cent of women are aware of health and fitness, only 74 per cent go for a checkup when they are unwell, according to a recent survey. However, when it comes to health insurance, women are on top of their game — 47 per cent have medical insurance, 65 per cent said they were fully aware of insurance, and 77 per cent said they knew how to submit a claim, according to a survey – Women Health and Insurance.

The Mental Healthcare Bill’ has been passed in Apr’2017 in the Lok Sabha and it decriminalizes suicide attempt by mentally ill people and provides services for people with mental illness.

It also includes a clause which obligates insurers to make provision for medical insurance for treatment of mental illness on the same basis as is available for treatment of physical illness. Currently, health insurance plans in India do not provide coverage for mental health disorders.

As per National Mental Health Survey of India 2015-16, 1 in 20 people in India suffer from depression.

The study showed that on an average out of -pocket expenditure per month was approximately 1000 to 1500 rupees and qualitative interviews revealed that this is a big challenge. In the absence of state or insurance coverage for most families, a large proportion of payments for treatment are out-of-pocket expenses.

The introduction of mental health insurance will help in promotion of mental health literacy among the population. This would also reduce the stigma around the mental illness and enable the people to perceive it same as physical ailments.

Almost all insurance policies will be issued in electronic form with effect from 1 October this year, with insurance buyers required to have an e-insurance account (eIA) to buy or renew policies thence.

Most policies, including all motor insurance and overseas travel insurance policies, will only be purchasable in electronic form after September. From filling up the application form to making payments online to the issuance of the policy document, the entire process of buying insurance could soon be paperless. Maintaining and managing policy documents or records across multiple companies will also be done away with, as the policyholder will have access to a single-view platform. “More importantly, customers will no longer be vulnerable to being cheated by fraudsters fabricating and forging policies since digital policies will be authentic,” Mr Easwara Narayanan, Chief Operating Officer, Future Generali India Insurance told The Economic Times.

However, Mr S V Ramanan, CEO, CAMS Repository Services, said: “The response to the e-insurance account has been lukewarm so far. The reason being it’s still not well known in the market. The policyholder trusts the recommendation of the sales person or the insurer, and this hasn’t been their priority at the moment.” Customers will have to open an eIA with any insurance repository to hold the insurance policies in electronic form. Currently, there are five insurance repositories in India. Mr Nilesh Parmar, COO, Edelweiss Tokio Life, said: “In the immediate term, we do see some disruption on account of the mandatory issuance of e-insurance policies for all online customers. Convincing customers of the need to open an eIA account and the actual process of opening this account for the vast majority of customers who don’t have this account yet could lead to some challenges.”

Furthermore, there are still large areas of the country where this may not be possible. Mr Anil Chopra, Group CEO & Director, Bajaj Capital, said: “The extension of this (electronic policies) to small cities and villages and to the policyholders who are not Internet-savvy is challenging.” Mr Narayanan also said: “Companies may have to organise digital signatures, apart from initiating arrangements with repositories for opening electronic insurance accounts. These are not major challenges.”

The process of listing of four public sector general insurance companies will be carried out one by one and a “lot of action” is expected in this arena shortly, a top official has said.

“Modalities are being worked out and I think we should see lots of action on that front in the next few months,” Economic Affairs Secretary Shaktikanta Das said. He was speaking at a business summit, according to the Press Trust of India. In the Budget presented last February, the government announced that the four public-sector general insurance companies would be listed. They are New India Assurance Company, National Insurance Company, Oriental Insurance Company, United India Insurance Company.

Several private-sector insurers are also considering obtaining a listing, either directly or indirectly. Ahead of insurance IPO exercises, IRDAI last week released draft guidelines for listed insurance companies. As of now, no insurer is listed in India.

HDFC ERGO General Insurance has acquired L&T General Insurance, a wholly owned subsidiary of Larsen & Toubro, a move which will turn HDFC ERGO into India’s third biggest private-sector non-life insurer.

he transaction, an all-cash deal, is valued at INR5.51 billion (US$82.5 million), according to filing with the Bombay stock exchange. The deal was sealed last Friday. The acquirer is a 51:49 joint venture between HDFC and ERGO International (part of the Munich Re Group) and the fourth largest private sector general insurer in India before the acquisition. In December last year, ERGO increased its stake in the joint venture from 25.84% to 48.74% at a cost of INR11.22 billion. L&T General Insurance is among the few players operating in the Indian market without a foreign partner.

In 2013, a proposal to merge with Future Generali Insurance fell through. “While a foreign partner was subsequently found, the deal was shelved and so the top management decided it would be better to exit the business,” the Financial Express reported, citing a senior industry executive.

Market consolidation

Mr Deepak Parekh, Chairman of HDFC and HDFC ERGO General Insurance, said: “Considering the importance of scale in the insurance business, consolidation within the insurance industry is inevitable. This transaction marks the beginning of this consolidation phase. The acquisition will help HDFC ERGO further strengthen its presence in the market. The combined size and expertise will result in improved cost efficiencies in the merged entity and benefit policyholders and other stakeholders.” Currently, there are 29 players in the non-life space including four state-owned insurers.

State-owned GIC Re, India’s only local reinsurer, expects a $5-$7.5 million insurance claim in connection with the 12 May crash of an EgyptAir Airbus A320 in the Mediterranean Sea. The claim will relate mainly to passenger liability and damage to the airline.

“We have a 5.5% share (of the total claim) in the Egyptian airline,” a GIC executive told the Economic Times. “For us, the claim will come from two segments—hull and machinery, and passengers’ liability. This could come to $5-$7.5 million.” The flight carried 56 passengers and 10 crew members. Insurance companies are assessing liability claims, which depend on the nationality and profiles of passengers. XL Catlin was the lead underwriter for the ill-fated plane.

Twenty-five to 30 banks will soon start distributing the products of more than one insurer, according to Mr Nilesh Sathe, Member-Life of IRDAI.

Since last month, the insurance regulator has allowed banks to tie up with three life insurers, three general insurers and three standalone health insurers to distribute insurance products. Earlier, banks were allowed to have bancassurance arrangements with one insurer each in the life, non-life and standalone health insurance categories. Insurers, particularly those not owned by banks, are likely to see a major boost in insurance distribution, as a result, reported the Hindu Business Line. On Tuesday, Future Generali Life, which prevously did not have a bancassurance partner, announced a partnership with Saraswat Bank, which has a tie-up with HDFC Life for distribution of life insurance products. Last month, Future Generali Life announced tie-ups with 10 medium and small size banks, aimed towards increasing rural insurance penetration. Through these, the company will focus on its rural insurance and micro insurance portfolios.

Industry experts say that other non-bank-promoted insurers, such as Birla Sun Life, Reliance Life, Bajaj Allianz, Aegon Life and Shriram Life, are also likely to get into similar arrangements with leading banks. Mr Anup Rau, CEO of Reliance Life, said that insurers not promoted by banks are likely to be looked at favourably because there will be no conflict of interest. However, the process will take some time as it is not mandatory for banks to tie up with more than one insurer, he added. At present, most major public and private sector banks, such as State Bank of India (SBI), Union Bank of India, Bank of Baroda, Canara Bank, Bank of India, Punjab National Bank, Andhra Bank, ICICI Bank and IDBI Bank, have stakes in insurance companies. Mr Arijit Basu, Managing Director and CEO of SBI Life, said that SBI has opted not to go for three insurance tie-ups. However, he said that in the next three years, the bank may look at multiple insurance partners as it gains more expertise cross-selling insurance products.

Insurers have also begun talks to tie up with recently licensed payments and small finance banks. Mr Tarun Chugh, Managing Director nd CEO of PNB MetLife, said the industry is likely to see the launch of simple over-the-counter products, which can also be bought online with the new payment banks. For example, private-sector life insurer Shriram Life Insurance is looking to expand its base in smaller towns. The company’s Managing Director, Mr Manoj Jain, told Business Standard: “We do not have a bancassurance partner. We realised that we since we missed the bus in tying up with banks earlier, we should look at small finance banks. We have identified two of them. “Shriram Life has taken stakes of around 3% in Ujjivan Financial Services and 5% in Utkarsh Micro Finance. Since they will be getting into multiple corporate agency model to sell insurance products, they will also sell our products. This will give us a level playing field.” he said.