Customer assumptions in the Indian health insurance market

India’s national expenditure on health services is on the rise and considerably higher than that of several similar developing countries. The share of health expenditure is approximately 6% of India’s GDP. However, the Indian government’s share of public expenditure is only 2% of this 6%, way below the stipulation of at least 5% of GDP as per the World Health Organization’s recommendation. According to IT research and advisory firm Celent, in the light of this new-found push for health insurance products, both from the regulators and from the health insurance companies, it has become critical to understand customer reaction to and expectations of health insurance services in the Indian market. In particular, Celent points out, there is a profound lack of knowledge on the part of the insurance industry generally of the behavioural factors in the purchase of healthcare insurance products in India. Against this background, Celent conducted a detailed survey of the Indian health insurance market earlier this year. Here, Ravi Nawal, an analyst in Celent’s insurance practice, comments on the survey and its findings. The survey looks at a number of areas including the role of employer provided health insurance in the market, penetration, levels of coverage, the primary sources of health care information for consumers and healthcare product knowledge, claims settlement and the main reasons for non ownership of a healthcare plan or policy

The Indian government’s share of healthcare expenditure is primarily focused on preventive and promotive care with a very small contribution towards curative care.