Health Insurance

The sections are as follows:1. History of Healthcare & the evolution of Health Insurance {Introduction} 2. The Health Insurance initiatives of the State in the last 6 years !. The current Health Insurance scenario "#enetration$ %. The &a#s & i'#rove'ents area in Health Insurance (. The )uture o##ortunities in this sector in India

Introduction

The *n+lish word ,health, co'es fro' the -ld *n+lish word hale. 'eanin+ ,wholeness. a /ein+ whole. sound or well.0. 1t the ti'e of the creation of the 2orld Health -r+ani3ation "2H-$. in 14%5. health was defined as /ein+ ,a state of co'#lete #hysical. 'ental. and social well-/ein+ and not 'erely the a/sence of disease or infir'ity, The ter' health insurance is +enerally used to descri/e a for' of insurance that #ays for 'edical e6#enses. It is so'eti'es used 'ore /roadly to include insurance coverin+ disa/ility or lon+ ter' nursin+ or custodial care needs. It 'ay /e #rovided throu+h a +overn'ents#onsored social insurance #ro+ra'. or fro' #rivate insurance co'#anies. )or an individual. either at a #ersonal level or the fa'ily front. of which he or she is a #art. health is an e6tre'ely i'#ortant su/7ect. which needs to /e +iven #riority. The sa'e conce#t can /e e6tended to the level of the country. where the health of the citi3ens. co'es at the core for its lon+ ter' sustaina/le develo#'ent.

The history of the concept Health insurance can be traced back to the year 188384, when in Germany, compulsory accident and sickness insurance was initiated by Otto on !ismarck. The sa'e conce#t was also ado#ted /y &reat 8ritain. )rance. 9hile. the Soviet :nion. and other nations after 2orld 2ar I. In the year 14%6. in 8ritain the ;ational Health Insurance which went into effect in 14%5 #rovided the 'ost co'#rehensive co'#ulsory 'edical care #lan. In which individual o/tained free 'edical attention /y #artici#atin+ doctors of ;ational Health Service. The cost was 'et /y the national +overn'ent and local ta6ation & no'inal char+es for so'e services were levied. Si'ilarly 14(5 the 9anadian Hos#ital and <ia+noses 1ct #rovided full hos#ital services al'ost free of char+e in #u/lic wards. The conce#t of ;ational health insurance widely ado#ted in *uro#e and #arts of 1sia. Social Security for Health Insurance is a new thin+ for the Indians. It is a co''on #ractice for villa+ers to ta=e a >#iruvu? "a collection$ to su##ort a household with a sic= #atient. However. health insurance. as we =now it today. was introduced only in 1412 when the first Insurance 1ct was #assed. The current version of the Insurance 1ct was introduced in 14!5. Since then there was little chan+e till 14@2 when the insurance industry was nationali3ed and 1 @ #rivate insurance co'#anies were /rou+ht under the u'/rella of the &eneral Insurance 9or#oration "&I9$. Arivate and forei+n entre#reneurs were allowed to enter the 'ar=et with the enact'ent of the Insurance Be+ulatory and <evelo#'ent 1ct "IB<1$ in 1444. The #enetration of health insurance in India has /een low. It is esti'ated that only a/out !C to (C of Indians are covered under any for' of health insurance. In ter's of the 'ar=et share. the si3e of the co''ercial insurance is /arely 1C of the total health s#endin+ in the country. The Indian health insurance scenario is a 'i6 of 'andatory social health insurance "SHI$. voluntary #rivate health insurance and co''unity- /ased health insurance "98HI$. Health insurance is thus really a 'inor #layer in the health ecosyste'. 8efore inde#endence in India. health care has /een /ased on voluntary wor=. Since ancient ti'es traditional #ractitioners of health care have contri/uted to the 'edicinal needs of society. 1cute =nowled+e in the 'edicinal #ro#erties of #lants and her/s were #assed on fro' one +eneration to another to /e used for treat'ent. The colonial rule and the do'inance of the 8ritishers chan+ed the scenario. Hos#itals 'ana+ed /y 9hristian 'issionaries too= centre sta+e. *ven the intellectual elite in India with their #ro west /ias favored 2estern #ractices. Arior to inde#endence the healthcare in India was in sha'/les with lar+e nu'/er of deaths and s#read of infectious diseases. 1fter inde#endence the &overn'ent of India laid stress on Ari'ary Health 9are and India has #ut in sustained efforts to /etter the health care syste' across the country.

In 14%@. the Bhore Committee Report atte'#ted to analy3e the state of health care in "ndia and to 'a=e reco''endations for the i'#rove'ent of health care services in "ndia# -n the eve of IndiaDs inde#endence in 1$4%. the 8hore 9o''ittee Be#ort /eca'e the te'#late for the structure of health care services in "ndia in the #ostcolonial era. as reflected in the #ostcolonial +overn'ent of IndiaDs )ive-Eear Alans. The +overn'ent initiative was not enou+h to 'eet the de'ands fro' a +rowin+ #o#ulation /e it in #ri'ary. secondary or tertiary health care. 1lternate sources of finance were critical for the sustaina/ility of the health sector. We need to understand the various methods that are used by individuals & families in financing the overall health care expenditure. /efore we +o into further details re+ardin+ the various initiatives of state & society. There is a /asic structure & #rocess as to how >Healthcare *6#enditure? is financed /y #eo#le in India. I a' #rovidin+ /elow a flowchart. hi+hli+htin+ the various o#tions underta=en to finance their health care e6#ense.

There are 'ainly 2 ways. /y way of which health care e6#ense can /e tac=led. It can either /e done. >privately "i.e. #rocure the 'oney #ersonally$ or with the hel# #f >State or Society/public. In case of Arivate financin+. there are ! o#tions. availa/le with any #erson. which are under-'entioned: -ut of Aoc=et F Self financin+. I.e. the #erson #ays fro' his or her own #oc=et & savin+s. Arivate Health Insurance F The e6#ense is ta=en care /y the health #olicy. which the #erson owns. *6ternal Source F 8y way of 'ana+in+ #ersonal loans fro' friends & fa'ily or 8an=s etc In the case of Au/lic )inancin+ o#tion. the #erson a+ain has ! o#tions. under'entioned: State )unded F The &ovt. #rovides for the 'edical care or +ives so'e su/sidy. Social security F In develo#ed countries /y #ayin+ a s'all a'ount to the state. you are covered for 'edical. *6ternal funded F 1id or +rants etc Till a/out 2 years /ac=. the #rivate sectors venture in the health care sector consisted of only solo #ractitioners. s'all hos#itals and nursin+ ho'es. The Guality of service #rovided was e6cellent es#ecially in the hos#itals run /y charita/le trusts and reli+ious foundations. In 145 Ds reali3in+ that the +overn'ent on its own would not /e a/le to #rovide for health care. the +overn'ent allowed the entry of #rivate sector to reduce the +a# /etween su##ly and de'and for healthcare. The #rivate hos#itals are 'ana+ed /y cor#orate. non-#rofit or charita/le or+ani3ations. The esta/lish'ent of #rivate sector has resulted in the e'er+ence of o##ortunities in ter's of

'edical eGui#'ent. infor'ation Tele'edicine and 'edical touris'

technolo+y

in

health

services.

8A-.

he current !ealth "nsurance scenario

India s#ends a/out 6.( to @C of &<A on Health care "official esti'ates around 6C$ out of which 1.2C is in the &ovt. sector "this accounts for 22C of overall s#endin+$ and %.@C in #rivate sector "@5C of overall s#endin+$. In India. we yet do not have any universal health insurance #lan. which caters to all the citi3ens of our country.

There are various ty#es of health overa+es in India. 8ased on ownershi# the e6istin+ health insurance sche'es can /e /roadly divided into % cate+ories. such as: &overn'ent or state-/ased syste's Har=et-/ased syste's "#rivate and voluntary$ *'#loyer #rovided insurance sche'es He'/er or+ani3ation ";&- or coo#erative$-/ased syste's

&overn'ent or state-/ased syste's &overn'ent or state-/ased syste's include 9entral &overn'ent Health Sche'e "9&HS$ and *'#loyees State Insurance Sche'e "*SIS$. It is esti'ated that e'#loyer 'ana+ed syste's cover a/out 2 -! 'illion of #o#ulation. The sche'es run /y 'e'/er-/ased or+ani3ations cover a/out ( #er cent of #o#ulation in various ways.

8ut there are so'e s#ecial insurance sche'es #ro'oted /y the &overn'ent. which #rovide 'edical /enefits to s#ecific sections of our society. The under-'entioned initiatives & sche'es are those which have /een #ro'oted /y the &overn'ent or with the hel# of the &overn'ent.

Central Government Health Scheme (CGHS)

Started in 14(% with 16 allo#athic dis#ensaries coverin+ 2.! lac /eneficiaries Arovides co'#rehensive 'edical care to central +ovt. e'#loyees Hutual advanta+e to /oth e'#loyee and e'#loyer ;ow !2 dis#ensariesIhos#itals in various syste's of 'edicines coverin+ %2.@6 lac /eneficiaries

Since 14(%. all e'#loyees of the 9entral &overn'ent "#resent and retired$J so'e autono'ous and se'i-+overn'ent or+ani3ations. HAs. 7ud+es. freedo' fi+hters and 7ournalists are covered under the 9entral &overn'ent Health Sche'e "9&HS$. This sche'e was desi+ned to re#lace the cu'/erso'e and e6#ensive syste' of rei'/urse'ents &GO", 1$$4'# It ai's at #rovidin+ co'#rehensive 'edical care to the 9entral &overn'ent e'#loyees and the /enefits offered include all out#atient facilities. and #reventive and #ro'otive care in dis#ensaries. In#atient facilities in +overn'ent hos#itals and a##roved #rivate hos#itals are also covered. This sche'e is 'ainly funded throu+h 9entral &overn'ent funds. with #re'iu's ran+in+ fro' Bs 1( to Bs 1( #er 'onth /ased on salary scales. The covera+e of this sche'e has +rown su/stantially with #rovision for the nonallo#athic syste's of 'edicine as well as for allo#athy. 8eneficiaries at this 'o'ent are around %!2 . s#read across 22 cities. The 9&HS has /een critici3ed fro' the #oint of view of Guality and accessi/ility. Su/scri/ers have co'#lained of hi+h out-of-#oc=et e6#enses due to slow rei'/urse'ent and inco'#lete covera+e for #rivate health care "as only 5 C of cost is rei'/ursed if referral is 'ade to #rivate facility when such facilities are not availa/le with the 9&HS$.

Employee and State Insurance Scheme (ESIS) The enact'ent of the *'#loyees State Insurance 1ct in 14%5 led to for'ulation of the *'#loyees State Insurance Sche'e. This sche'e #rovides #rotection to

e'#loyees a+ainst loss of wa+es due to ina/ility to wor= due to sic=ness. 'aternity. disa/ility and death due to e'#loy'ent in7ury. It offers 'edical and cash /enefits. #reventive and #ro'otive care and health education. Hedical care is also #rovided to e'#loyees and their fa'ily 'e'/ers without fee for service. -ri+inally. the *SIS sche'e covered all #ower-usin+ non-seasonal factories e'#loyin+ 1 or 'ore #eo#le. Kater. it was e6tended to cover e'#loyees wor=in+ in all non-#ower usin+ factories with 2 or 'ore #ersons. 2hile #ersons wor=in+ in 'ines and #lantations. or an or+ani3ation offerin+ health /enefits as +ood as or /etter than *SIS. are s#ecifically e6cluded. Service esta/lish'ents li=e sho#s. hotels. restaurants. cine'a houses. and road trans#ort and news #a#ers #rintin+ are now covered. The 'onthly wa+e li'it for enrol'ent in the *SIS is Bs. 6 ( . with a #re#ay'ent contri/ution in the for' of a #ayroll ta6 of 1.@(C /y e'#loyees. %.@(C of e'#loyeesD wa+es to /e #aid /y the e'#loyers. and 12.(C of the total e6#enses are /orne /y the state +overn'ents.
The nu'/er of /eneficiaries is over !! 'illion s#read over 62 *SI centers across states. :nder the *SIS. there were 12( hos#itals. %2 anne6es and 1 %( dis#ensaries with over 2! /eds facilities. The sche'e is 'ana+ed and financed /y the *'#loyees State Insurance 9or#oration "a #u/lic underta=in+$ throu+h the state +overn'ents. with total e6#enditure of Bs ! ! 'illion or Bs % I- #er ca#ita insured #erson. The *SIS #ro+ra''e has attracted considera/le criticis'. 1 re#ort /ased on #atient surveys conducted in &u7arat &(hariff, 1$$4 as )uoted in *llis + et a,,---' found that over half of those covered did not see= care fro' *SIS facilities. :nsatisfactory nature of *SIS services. low Guality dru+s. lon+ waitin+ #eriods. i'#udent /ehaviour of #ersonnel. lac= of interest or low interest on #art of e'#loyees and low awareness of *SI #rocedures. were so'e of the reasons citedI

-ther &overn'ent Initiatives

Apart from the government-run schemes, social security benefits for the disadvantaged groups can be availed of, under the provisions of the Maternity Benefit (Amendment) Act 1995, or!men"s #ompensation (Amendment) Act 19$%, &lantation 'abour Act 1951, Mine Mines 'abour elfare (und Act 19%), Beedi or!ers elfare (und Act 19*) and Building and other #onstruction or!ers (+egulation of ,mployment and #onditions of -ervice) Act, 199). /he 0overnment of 1ndia has also underta!en initiatives to address issues relating to access to public health systems especially for the vulnerable sections of the society. /he 2ational 3ealth &olicy 4554 ac!no6ledges this and aims to evolve a policy structure, 6hich reduces such ine7uities and allo6s the disadvantaged sections of the population a fairer access to public health services. ,nsuring more e7uitable access to health services across the social and geographical e8panse of the country is the main ob9ective of the policy. 1t also see!s to increase the aggregate public health investment through increased contribution from the #entral as 6ell as state governments and encourages the setting up of private insurance instruments for increasing the scope of coverage of the secondary and tertiary sector under private health insurance pac!ages. /he government envisages an increase in health e8penditure as a : of 0;& from e8isting 5.9: to 4.5 : by 4515 and an increase in the share of central grants from the e8isting 15: to constitute at least 45: of total public health spending by 4515. /he -tate government spending for health in turn 6ould increase from 5.5: to *: of the budget by 4555, to be further increased to $: by 4515.

Health insurance initiatives by State Governments

1n the recent past, various state governments have begun health insurance initiatives. (or instance, the Andhra &radesh government is implementing the Aarogya Raksha -cheme since 4555, 6ith a vie6 to increase the utili<ation of permanent methods of family planning by covering the health ris!s of the acceptors. All people living belo6 the poverty line and those 6ho accept permanent methods of family planning are eligible to be covered under this scheme. The Government of Andhra Pradesh pays a premium of +s *5 per acceptor. /he benefits to be availed of, include hospitali<ation costs up to +s.%555 per year for the acceptor and for his = her t6o children for a total period of five years from date of the family planning operation. /he coverage is for common illnesses and accident insurance benefits are also offered. /he hospital bill is directly reimbursed by the 1nsurance #ompany, namely the 2e6 1ndia Assurance #ompany. The Government of Goa along 6ith the 2e6 1ndia Assurance #ompany in 19$$ developed a medical reimbursement mechanism. /his scheme can be availed by all permanent residents of 0oa 6ith an income belo6 +s 55 555 per annum for hospitali<ation care, 6hich is not available 6ithin the government system. /he non-

availability of services re7uires certification from the hospital ;ean or ;irector 3ealth -ervices. /he overall limit is +s >5 555 for the insured person for a period of one year. A pilot pro9ect on health insurance 6as launched by the Government of Karnataka and the ?2;& in t6o bloc!s since @ctober 4554. /he aim of the pro9ect 6as to develop and test a model of community health financing suited for rural community, thereby increasing the access to medical care of the poor. /he beneficiaries include the entire population of these bloc!s. /he premium is +s >5 per person per year, 6ith the 0overnment of Aarnata!a subsidi<ing the premium of those belo6 poverty line and those belonging to -cheduled #astes= -cheduled /ribes. /his premium entitles them to hospitali<ation coverage in the government hospitals up to a ma8imum of +s 4555 per year, including hospitali<ation for common illnesses, ambulance charges, loss of 6ages at +s. 55 per day as 6ell as drug e8penses at +s 55 per day. +eimbursements are made to an insurance fund 6hich has been set up by the 20@ = &+1 6ith the support of ?2;&. The Government of Kerala is planning to launch a pilot pro9ect of health insurance for the >5: families living belo6 the poverty line. /he scheme 6ould be associated 6ith a government insurance company. #urrently, negotiations are under 6ay 6ith the 1+A to see! service ta8 e8emption. /he proposed premium is +s 455 plus 5: ta8. /he ma8imum benefit per family 6ould be +s 45 555. /he amount for the premium 6ould be recovered from the drug budget (+s 155), the &+1 (+s 155) and from the beneficiary (+s )4.55) 6hile the benefits available 6ould include cover for hospitali<ation, deliveries involving surgical procedures (either to the mother or the ne6born). 1nstead of payment by the beneficiary, -mart #ard facility 6ould be offered. /his scheme 6ould be applicable in 41) government hospitals.

Market-based systems (private and voluntary)

In the -#en Har=et /ased cate+ory. there are various Health Insurance #lans /ein+ offered /y /oth Arivate & Au/lic Insurance co'#anies. 1 8road outline of the health #lans. availa/le is #rovided /elow:"ndividual health plan: - These are the so-called DtraditionalD health insurance covers. co''only =nown as DHediclai'D #olicies. They 'ainly cover hos#itali3ation e6#enses #rovided it is for at least 2% hours. The e6#enses for hos#ital /ed. nursin+. sur+eonDs fees. consultant doctorDs fees. cost of /lood. o6y+en and o#eration theatre char+es are the usual inclusions. However. unli=e the #ast. 'ost #lans now co'e with su/-li'its for each of these heads. They usually do not cover #re-e6istin+ diseases or co'#lications arisin+ fro' the' for the first four years of the #olicy. 8esides. clai's for s#ecific ail'ents 'ay not /e allowed in the first or second year. )or every clai'-free year. 'ost #lans add ( #er cent to the su' insured. Har=et-/ased syste's "voluntary and #rivate$ have Hediclai' sche'e which covers a/out 2.( 'illion of #o#ulation. There are 'any e'#loyers who rei'/urse costs of 'edical e6#enses of the e'#loyees with or without contri/ution fro' the

e'#loyee. It is esti'ated that a/out 2 such rei'/urse'ent arran+e'ents

'illion e'#loyees 'ay /e covered /y

Mediclaim bein one o! the oldest " most popular health insurance plans# a brie! summary o! its development# success " aps is provided belo$%History o! Mediclaim scheme The +overn'ent insurance co'#anies started first health insurance in 1456. under the na'e Hediclai'J thereafter Hediclai' has /een revised to 'a=e it attractive #roduct. Hediclai' is a rei'/urse'ent /ase insurance for hos#itali3ation. It does not cover out#atient treat'ents. )irst there is used to /e cate+ory-wise ceilin+s on ite's such as 'edicine. roo' char+es. o#eration char+es etc. and later when the #olicies were revised these ceilin+s were re'oved and total rei'/urse'ents were allowed with in the li'it of the #olicy a'ount. The total li'it for #olicy covera+e was also increased. ;ow a #erson /etween ! 'onths to 5 years of a+e can /e +ranted Hediclai' #olicy u# to 'a6i'u' covera+e of Bs. ( la=h a+ainst accidental and sic=ness hos#itali3ations durin+ the #olicy #eriod as #er latest +uidelines of &eneral Insurance 9or#oration of India. This sche'e is offered /y all the four su/sidiary co'#anies of &I9. Hediclai' sche'e is also availa/le for +rou#s with su/stantial discount in #re'iu'. The current statistics on health insurance indicate that out of 1 /illion #o#ulations only a/out 2.( 'illion of #o#ulation is covered /y Hediclai' sche'e. The reason for lac= of #o#ularity of this sche'e could /e several. The health insurance #roducts are +enerally co'#licated and it is su++ested that &I9 and its su/sidiary co'#anies who deal in non-life insurance 'ar=et which is do'inated /y 'andated insurance such as accident. fire and 'arine. do not have e6#ertise in 'ar=etin+ health insurance and therefore this sche'e is not #o#ular. Health insurance also re#resents very s'all #ercenta+e of overall /usiness of &I9 and its su/sidiaries hence they have also not focused their attention in this area. The &I9 co'#anies have little interest and 'ean to 'onitor the sche'e. It should also /e reco+ni3ed that /ecause of technicalities of health service /usiness there are nu'/er of cu'/erso'e rules which have ha'#ered the acce#tance of the sche'e. It is also re#orted that in nu'/er of cases the a##licants of older a+es have /een refused to /eco'e 'e'/er of Hediclai' sche'e due to unnecessary conservatis' of the co'#anies. Hediclai' has #rovided a 'odel for health insurance for the 'iddle class and the rich. It covers hos#itali3ation costs. which could /e catastro#hic. #amily floaters $lans- These can /e seen as a++lo'erations of individual health #lans. for a fa'ily. The /enefits re'ain lar+ely the sa'e. /ut the su' insured can /e availed /y any or all 'e'/ers of the fa'ily and not a sin+le #erson. Bather than /uyin+. say. a Bs 2 . health cover for each 'e'/er of the fa'ily of four /y s#endin+ for a total cover of Bs 5 . . if you /ou+ht an

)) for Bs 5 . . each #erson covered under it can avail /enefits u# to Bs 5 . as o##osed to Bs 2 . in the earlier instance. This reduces the need for you to #ay fro' your #oc=et. 1lso. it co'es at a lower #re'iu' than otherwise. 1 )) can /e /ou+ht /y an individual who /eco'es the #ro#oser alon+ with s#ouse. de#endent children u# to 2( years or even un'arried. divorced. widowed dau+hter and de#endent #arent. Critical illness plan%& This is not a su/stitute for a DHediclai'D. /ut you should ideally add this layer to the latter. It #rovides financial assistance if the insured develo#s a serious ail'ent. such as cancer. or has a stro=e. *ach cover has a list of ail'ents. usually 4-12 of the'. -ne can +et it in the for' of a rider attached to a life insurance cover. or as a standalone #olicy fro' either a life insurer or a non-life insurer. If critical illness occurs. it #ays the entire su' insured and ter'inates and can ha##en only once for any #articular illness. To +et the #ayout. the insured has to survive for ! successive days after the dia+nosis. ;o clai' can /e 'ade durin+ the first 4 days of the ince#tion of the #olicy. The #olicy ter' is usually lon+er "1 -2 years$ if this cover is /ou+ht fro' a life insurer as a rider than fro' a +eneral insurer "1-( years$. Senior citi'ens health plan:- Host Individual Health #lans. ca# the entry a+e at around 6 years. while Senior 9iti3en Health Alans. are +enerally for the a+e +rou# of 6 -5 years. Host can /e renewed lifelon+ or u# to the a+e of 4 . and have a fi6ed covera+e of. say. Bs 1 . or Bs 2 . . 8esides loo=in+ for su/li'its. those ta=in+ S9HA should watch out for certain illnesses as 'any ail'ents are e6cluded fro' the #lan. Senior 9iti3en Health Alans 'i+ht even have the o#tion to attach a 9ritical Illness #lan rider. (aily hospital cash benefit: - This should /e the last o#tion when /uyin+ health #lans. Host hos#ital cash #lans 'i+ht also inconvenience you as they offer the /enefit after dischar+e fro' the hos#ital. and only after the #olicyholder #roduces #roof of the nu'/er of days he stayed there. Hos#ital cash /enefit has a #re-defined li'it in 'ost cases. say Bs ( #er day for u# to ( days in a year and u# to 2( days durin+ the entire ter'. )nit&lin*ed health plans:- These are 'ostly defined /enefit #lans - usually for the lon+ ter' - and. unli=e a standard health insurance #olicy. the #ayout is not de#endent on the costs actually incurred. Health :li#s are 'ade u# of two #arts - a health #lan and a unit-lin=ed invest'ent #lan. 1lthou+h these #olicies are /ein+ sold /y life insurers. they 'ay not cover life ris=. -ut of the #re'iu' one #ays. a #ortion +oes towards 'edical covera+e and the rest of the #re'iu' is invested in a fund that o#erates li=e a 'utual fund.

Covers from life insurers: - Kife insurance co'#anies. too. have started offerin+ health #lans. Host of these are. however. defined /enefit #lans - the #res#ecified a'ount which is the su' insured is #aid as co'#ensation. irres#ective of the actual a'ount of e6#enses incurred. 1lso. these are lon+-ter'. havin+ a fi6ed #re'iu' for. say. three. five. or even 1 years. Host of the ty#es of #lans discussed a/ove are on offer. So'e will even throw in a life cover for +ood 'easure. +ote on $re&existing diseases - This is a co''on #ro/le' area since there was no standard definition of #re-e6istin+ illness earlier. In Lune 2 5. the &eneral Insurance 9ouncil said ,the /enefits "of health insurance$ would not /e availa/le for any condition. ail'ent or in7ury or related condition for which the insured had si+ns or sy'#to's. andIor was dia+nosed andIor received 'edical adviceItreat'ent. #rior to ince#tion of the first #olicy. until %5 consecutive 'onths of covera+e have ela#sed. after the date of ince#tion of the first #olicy.,

Employer provided insurance schemes

There are several +overn'ent and #rivate e'#loyers such as Bailway and 1r'ed forces and #u/lic sector enter#rises that run their own health services for e'#loyees and fa'ilies. It is esti'ated that a/out ! 'illion e'#loyees 'ay /e covered under such e'#loyer 'ana+ed health services "*llis et al. 1446$. &eneral Insurance 9or#oration "&I9$ and its four su/sidiary co'#anies and Kife Insurance 9or#oration "KI9$ of India have various health insurance #roducts. These are 1shadee# Alan II and Leevan 1sha Alan II /y Kife Insurance 9or#oration of India and various #olicies /y &eneral Insurance 9or#oration of India as under: Aersonal 1ccident Aolicy. Lan 1ro+ya Aolicy. Ba7 Ba7eshwari Aolicy. Hediclai' Aolicy. -verseas Hediclai' Aolicy. 9ancer Insurance Aolicy. 8havishya 1ro+ya Aolicy and <readed <isease Aolicy "Srivastava 1444$. The health care de'and is risin+ in India now days. It is esti'ated that only 1 #er cent of health insurance 'ar=et has /een ta##ed till today. Still there is a sco#e of rise u# to !( #er cent in near

Member or ani&ation ('G( or cooperative)-based systems - Community Health Insurance

9HI is Many not-for-#rofit insurance sche'e that is ai'ed #ri'arily at the infor'al sector and for'ed on the /asis of a collective #oolin+ of health ris=s. and in which the 'e'/ers #artici#ate in its 'ana+e'ent.0 Narious other ter's are used in reference to co''unity health insurance. includin+: >'icro health insurance? >local health insurance? and >'utuelles?

They are +enerally tar+eted at low-inco'e #o#ulations. and the nature of the >co''unities? around which they have evolved is Guite diverse: fro' #eo#le livin+ in the sa'e town or district. to 'e'/ers of wor= coo#erative or 'icrofinance +rou#s. -ften. the sche'es are initiated /y a hos#ital. and tar+eted at residents of the surroundin+ area. 1s o##osed to social health insurance. 'e'/ershi# is al'ost always voluntary rather than 'andatory. In recent years. co''unity health insurance "9HI$ has e'er+ed as a #ossi/le 'eans /ecause of: ()) Improvin access to health care amon the poor* and (+) ,rotectin the poor !rom indebtedness and impoverishment resultin !rom medical e-penditures. Host of the insurance sche'es have /een started as a reaction to the hi+h health care costs and the failure of the +overn'ent 'achinery to #rovide +ood Guality care. The o/7ectives ran+e fro' M#rovidin+ low cost health care0 to M#rotectin+ the households fro' hi+h hos#itali3ation costs.0 81I). <H1;. ;avsar7an Trust and B1H1 e6#licitly state that the health insurance sche'e was develo#ed to #revent the individual 'e'/er fro' /earin+ the financial /urden of hos#itali3ation. Health insurance was also seen /y so'e or+ani3ations as a 'ethod of encoura+in+ #artici#ation /y the co''unity in their own health care. 1nd finally. es#ecially the 'ore activist or+ani3ations "199-B<. B1H1$ used co''unity health insurance as a 'easure to increase solidarity a'on+ its 'e'/ers F Mone for all and all for one.0 Host of these are /ased in rural or se'i ur/an areas. wor=in+ a'on+ the #oor. &.//O+0, 1aruna Trust, +.H.', dalits &2a sar3an Trust', farmers &4G"4(, 5eshas ini, !uldhana, 6H(', women from self help 7roups &!."8, 0H.2' and poor self-employed women &(*9.'# The si3e of the tar+et #o#ulation "i.e. the #o#ulation fro' which they ai' to draw 'e'/ers$ ran+es fro' a few thousands to 2( la=h. Host of the' use e6istin+ co''unity /ased or+ani3ations to #i++y/ac= the health insurance #ro+ra''e. 2hile in so'e it is the e6istin+ self hel# +rou#s "SH&s$. e +. <H1;. 81I)J in others it is a union "S*21. 199-B< and ;avsar7an$. In two others it is the coo#erative 'ove'ent "Eeshasvini and 8uldhana$.
In India. there a##ears to /e three /asic desi+ns. de#endin+ on who is the insurer "see the )i+ure$. In Ty#e I "or HH- desi+n$. the hos#ital #lays the dual role of #rovidin+ health care and runnin+ the insurance #ro+ra''e. There are five #ro+ra''es under this ty#e. In Ty#e II "or Insurer desi+n$. the voluntary or+ani3ation is the insurer. while #urchasin+ care fro' inde#endent #roviders. There are two #ro+ra''es under this ty#e. 1nd finally in Ty#e III "or Inter'ediate desi+n$. the voluntary or+ani3ation #lays the role of an a+ent. #urchasin+ care fro' #roviders and insurance fro' insurance co'#anies. .his seems to be a popular desi n# especially amon the recent CHIs.

 .he Gaps " improvements area in Health Insurance

Health insurance is an e6#ense. to /e sure. /ut the i'#ortance of health insurance really hel#s defray that e6#ense. To save 'oney. it is /etter to wor= with a health insurance a+ent who can hel# you co'#are #lans and costs to find the /est one for you and your fa'ilyDs needs. Be'e'/er. 'edical e6#enses are hi+her than ever. so if you have to /e hos#itali3ed for any reason. your costs are +oin+ to /e a lot hi+her than you 'i+ht have antici#ated. They could /e so hi+h that you si'#ly canDt #ay the'. and /an=ru#tcy is your only recourse. It doesnDt 'a=e sense to +o /an=ru#t. and ruin your financial future. 7ust /ecause you didnDt /uy afforda/le health insurance. Thin= a/out another i'#ortance of health insurance. Eour fa'ily. your children need health care throu+hout their youn+ lives. and it see's li=e =ids are always +ettin+ into scra#es that reGuire a tri# to the e'er+ency roo'. If you ta=e care of a fa'ily. you owe it to the' to +et health insurance. 2ithout it. your entire fa'ily is vulnera/le. and if anythin+ ha##ened. would you want to live with the +uilt that havin+ no health insurance could createO The i'#ortance of health insurance cannot /e overrated. 9ertainly. it can /e difficult to co'e u# with the 'oney for individual health insurance. 8ut can you afford to /e without it. reallyO -ver the last ( years India has achieved a lot in ter's of health i'#rove'ent. 8ut still India is way /ehind 'any fast develo#in+ countries such as 9hina. Nietna' and Sri Kan=a in health indicators "Satia et al 1444$. In case of +overn'ent funded health care syste'. the Guality and access of services has always re'ained 'a7or concern. 1 very ra#idly +rowin+ #rivate health 'ar=et has develo#ed in India. .his private sector brid es most o! the aps bet$een $hat overnment o!!ers and $hat people need. Ho$ever# $ith proli!eration o! various health care technolo ies and eneral price rise# the cost o! care has also become very e-pensive and una!!ordable to lar e se ment o! population. .he overnment and people have started e-plorin various health !inancin options to mana e problems arisin out o! ro$in set o! comple-ities o! private sector ro$th# increasin cost o! care and chan in epidemiolo ical pattern o! diseases. The #ro#ortion of insurance in health care financin+ in India is e6tre'ely low. Au/lic s#endin+ in health care is very low at 1@C and the ;ational Health Aolicy has reco+ni3ed this Hore than 56C of healthcare financin+ is throu+h un#lanned or. non-contri/utory s#endin+ 56C fro' outof-#oc=et e6#enses 5!C fro' #rivate sector s#endin+ Health care financin+ in India. 1s #er the statistics of the total health e6#enditure in India. worth Bs ! la=h crore. the s#endin+ on hos#itali3ation accounts for Bs 1 la=h crore in the country. / ainst this# the e-istin level o! health insurance premium $as $orth only 0s 1#222 crore# $hich means that a ma3ority section o! the Indian populace does not have an insurance cover# $hich is a reat opportunity to be tapped.

The Insurance industry should share data with each other. as the data of #eo#le who have 'ade clai's is availa/le. which is not adeGuate. 1 'uch wider data/ase would 'a=e all the difference. The IB<1 is in the #rocess of esta/lishin+ a data warehouse that will contain infor'ation in detail a/out health insurance. which can /enefit the industry as a whole. In 1ndhra Aradesh. the data is collected ri+ht at villa+e level with a tar+et of 2.( crore #eo#le. ,<urin+ the data collection. it was found that the disease /urden of dia/etes in #oor fa'ilies is less. -ne reason is that #eo#le fro' lower socio-econo'ic classes have to do 'ore #hysical wor= and their diet is not rich which is res#onsi/le for inducin+ lifestyle diseases., So'e of the 'ain reason. as to why there has /een restraint in the +rowth of Health Insurance. durin+ the last decade is 7otted down:). Inade4uate healthcare in!rastructure +. 5imited reach

6. Si ni!icant under$ritin losses !or Health Insurance business in India 7. 5ack o! standardi&ation and /ccreditation norms in healthcare industry in India 8. Insu!!icient data on Indian consumers " disease patterns resultin in di!!iculty in product development and pricin . There has /een so'e resistance "o/served$ fro' the Health Insurance 9o'#anies. which is addin+ to the sus#icion of custo'ers /efore 'a=in+ any decision to enroll with a health insurance #olicy or sche'e. The dou/ts raised /y custo'ers are as follows:(,)B S ,# C)S ,-.RS 1. ;ew 'odern #rivate insurance co'#anies are indulging in money& ma*ing /usinesses with little interest in insurance. 2. Insurance #olicies contain too many exclusion clauses. !. Host insurance co'#anies now use call centers and staff attempt to ans/er 0uestions by reading from a script . It is difficult to s#ea= to any/ody with e6#ert =nowled+e. These are so'e of the 'ain short-co'in+ which the Health Insurance co'#anies. need to tac=le to raise the confidence level of the custo'ers and also +ain #ositive word of 'outh feed/ac= & references. In addition. there are so'e inherent chan+es. which the industry should loo= at. if we want to 'ove towards the ne6t #lat-for' in Health Insurance. in India. 2e can call these the >Aillar of 9han+es?. necessary to evolve the Health Insurance 'ar=et. These chan+es need to /e /rou+ht a/out at the industry level. where all the co'#anies should 'a=e co'/ined efforts. $illars of Change I a' 7ottin+ down the sa'e. with a /rief descri#tion of the chan+e that are reGuired. 1. 9onsu'er 1wareness We need to create the Awareness Increase exposure through media (TV, Radio and Internet). In this case, the traditional model is more generic and there is a need to reinvent the messages based on target groups to achieve the business ob ectives.

2. Standardi3ation of Health care costs and 1ccreditation nor's Kac= of standardi3ation & accreditation. 'a=es it difficult to 7ud+e the Guality of health service /ein+ #rovided /y health-care institutions. In addition varyin+ treat'ent cost & /ar+ainin+ is addin+ to the woes of the health industry. 2orldwide. the Standardi3ation & 1ccreditation of Hos#itals of Healthcare <elivery Syste' has /eco'e the focus. In India health care delivery syste' has re'ained lar+ely fra+'ented and uncontrolled. The focus of accreditation is on continuous i'#rove'ent in the or+ani3ational and clinical #erfor'ance of health services. not 7ust the achieve'ent of a certificate or award or 'erely assurin+ co'#liance with 'ini'u' acce#ta/le standards. !. Healthcare Infrastructure /ill no6, in 1ndia, the health sector i.e. the primary health care system has been managed mainly by the shallo6 structure of government health-care facilities and other public health care systems in a traditional model of health funding and provision. But, it is unable to 9ustify the demand for health security by over 455 million of the health insurable population in 1ndia, mainly due to service costs being out of reach of many people, absence of good and effective number of physicians, lo6 rate of education programs, less number of hospitals, poor medical e7uipment and over all, the poor budget of government to6ards the health program. %. <ata & Infor'ation *6chan+e -n account of insufficient & #ro#erly 'ana+ed data availa/ility on Indian custo'ers & disease related infor'ation. is 'a=in+ is difficult for the Health Insurance co'#anies to #ro#erly desi+n & #rice #roducts. 2hatever data is currently availa/le. the &ovt.. co'#anies & health-care institutions need to share the' a'on+ the'selves. "ssues and Challenges existing in the !ealth"nsurance "ndustry in "ndia /heBsignificantBeconomicBgro6thBinB1ndiaBatBtheBturnBofBtheBmillenniumB hasBleftBitsmedicalBcareBandBhealthBinsuranceBsystemsBstrugglingBtoB!eep BupB6ithBtheBgro6inghealthcareBdemandsBofBitsBpeople.B1ndiaBisBcharacte ri<edBbyBaBgro6ingB(butBstillrelativelyBsmall)BmiddleBclassBandBaBlargeB(b utBshrin!ingBandBmostlyBrural)BnearsubsistenceBpopulation.B0ivenBtheBpopulation,BgeographicalBsi<eBofBtheBco untry,differentBlevelsBofBevolutionB6ithinBtheBurbanBandBruralBstrataBofBthe Bsociety,BitBisBnotsurprisingBthatBplayersBareBBfacedB6ithBvariousBchallen gesBinBincreasingBhealthinsuranceBcoverage.

IssuesandChallengesfacedbyvariousparticipantsoftheHealthI nsuranceValueChain

/hus,BthereBareBsignificantBchallengesBbeingBfacedBbyBtheBe8istingBpartici pantsBoftheBhealthBinsuranceBvalueBchainB6hichBhaveBimpactedBtheBgro6t hBofBtheBhealthinsuranceBindustryBinB1ndia.B hileBtheseBchallengesBneedB toBbeBaddressedBtoincreaseBtheBhealthBinsuranceBcoverageBinB1ndia,Bthere BisBalsoBaBneedBtoBunderstandtheBchallengesBfacedBbyBtheB1ndianBconsu merBinBtheBe8istingBmar!etBenvironment.

(pportunities in Health Insurance 1ccordin+ to recent news re#ort Health insurance continues to /e the fastest +rowin+ se+'ent with annual +rowth rate of ((C. Health Are'iu' has risen to Bs. !! crores in 2 6-2 @. The Indian healthcare insurance industry was worth I;B (.12(crores with a co'#ounded annual +rowth rate of a##ro6i'ately !@ #ercent /etween 2 2 and 2 5. The 'ar=et #enetration is only around 2 #ercent of the total #o#ulation in India. The Health Insurance Industry is one of the fastest +rowin+ se+'ents a'on+ other non-life insurance se+'ents. The Indian healthcare insurance industry is worth I;B 6 .%4@ crores with a co'#ounded annual +rowth rate of a##ro6i'ately %2.! #ercent /etween 2 5 and 2 1(. The 'ar=et #enetration is will /e ! folds hi+her in 2 1(. The 'ain factors of +rowth are increased awareness.

S 9 ( . /nalysis o! the Health Insurance (pportunity in India

Strengths 1#uture 2ro/th #actors3
Wea*ness 12 aps in the "ndust ry & System3

India is now the second fastest +rowin+ 'a7or econo'y in the world. Third lar+est econo'y in the ealt world Indian healthcare has e'er+ed as one of the lar+est service sectors in India. Healthcare s#endin+ in India is e6#ected to rise /y 1(C #er annu'. Healthcare s#endin+ could contri/ute 6.1C of &<A in 2 12 and e'#loy around 4 'illion #eo#le.

InadeGuate healthcare infrastructure Ki'ited reach Si+nificant underwritin+ losses for H /usiness in India

Kac= of standardi3ation and 1ccreditation nor's in healthcare industry in India

Insufficient data on Indian consu'ers & disease #atterns resultin+ in difficulty in #roduct develo#'ent and #ricin+.

hreats 14reas needing immediate concern3

,pportunities 1)ntapped $otential3

Increasin+ awareness of Health Insurance as risin+ healthcare costs have increased need for health insurance Su##ortin+ <e'o+ra#hic Arofiles "Aros#erin+ Hiddle 9lass. increasin+ disease state. #o#ulation$. There is a clear indication that see=ers " annual inco'e /etween I;B 2. . and %.44.444$ and strivers " annual inco'e /etween I;B (. . an 1 . . $ #o#ulation is si+nificantly increasin+ the ne6t future. There will /e a direct #ro#ortionality of this increase to healthcare s#endin+ #arity. The <isease rates in India are increasin+. India has one of the hi+hest heart disease and dia/ete rates in the world. Shift to lifestyle-related diseases

;ew 'odern #rivate insurance co'#anies are indul+in+ in 'oney-'a=in+ /usinesses with little interest in insurance.
in

Insurance #olicies contain too 'any e6clusion clauses. Host insurance co'#anies now use >call centers? and staff atte'#t to answer Guestions /y readin+ fro' a scri#t. It is difficult to s#ea= to any/ody with e6#ert =nowled+e.

1s #er the recent re#orts fro' various a+encies the Health sector has the #otential to /eco'e a Bs. 2( -crore industry /y 2 1 . 1ccordin+ to 2orld 8an= Be#ort. 44C of Indians will face financial crunch in case of any critical illness. Hence the need for Health Insurance In the ne-t !our years (by +2)7)# a host o! !actors $ill be responsible in drivin the !uture o! Health Insurance. The under-mentioned factors will play important role, in dri in7 the Health "nsurance industry to the ne:t platform# 1. Increasin+ awareness of Health Insurance as risin+ healthcare costs have increased need for health insurance 2. Su##ortin+ <e'o+ra#hic Arofiles "Aros#erin+ Hiddle 9lass. increasin+ disease state. #o#ulation$. !. <e-tariffin+ of the +eneral insurance industry "which has increased e'#hasis and efforts /y insurance co'#anies towards health insurance and other #ersonal lines of /usiness$ %. Bationali3ation of #re'iu' rates "e.+. trend of u#ward revision in res#ect of &rou# Health #olicies$ (. In order to encoura+e forei+n health insurers to enter the Indian 'ar=et the +overn'ent has recently #ro#osed to raise the forei+n direct invest'ent ")<I$ li'it in insurance fro' 26C to %4C . &overn'ent initiatives are always su##ortive to Healthcare Insurance *nviron'ent. 6. The s#endin+ on Healthcare is increasin+ E-E fro' 2 ( to 2 2(. The #ros#erin+ 'iddle class in India su##orts this s#endin+ environ'ent. The avera+e annual household consu'#tion in healthcare "discretionary s#endin+ $ is e6#ected to dou/le /etween 2 ( and 2 2(. @. There is a clear indication that see=ers " annual inco'e /etween I;B 2. . and %.44.444$ and strivers " annual inco'e /etween I;B (. . and 1 . . $ #o#ulation is si+nificantly increasin+ in the ne6t future. There will /e a direct #ro#ortionality of this increase to healthcare s#endin+ #arity. 5. Salient <e'o+ra#hic )eatures that su##ort the +rowth of Health Insurance in India: 1dult literacy rate in India is 61.!C and the youth literacy rate in India is @!.!C and is e6#ected to increase in the future. 4. The <isease rates in India is increasin+. India has one of the hi+hest heart disease and dia/etes rates in the world. 1 . It is ho'e to one-si6th of the world?s #o#ulation occu#yin+ less than ! C of the world?s area.

There will /e a nu'/er of factors. which will lead to +rowth for the Health industry. includin+ health insurance. The <rivers of &rowth are under-'entioned:2ro/th (rivers
o o o o o

India is now the second fastest +rowin+ 'a7or econo'y in the world. Third lar+est econo'y in the world Indian healthcare has e'er+ed as one of the lar+est service sectors in India. Healthcare s#endin+ in India is e6#ected to rise /y 1(C #er annu'. Healthcare s#endin+ could contri/ute 6.1C of &<A in 2 12 and e'#loy around 4 'illion #eo#le.

1lon+ with these other reasons. as why the Health Insurance will see a 'a7or /oo' in the co'in+ days is on account of 'any factors 1s under-'entioned:o o o o o o

Shift fro' sociali3ed to #rivate #roviders 8oo'in+ econo'y and Hi+h literacy rates Shift to lifestyle-related diseases *asier financin+ Increasin+ life e6#ectancy Beco+nition /y +overn'ent #riority section

The 'a7ority of healthcare services in India are #rovided /y the #rivate sector & the Arivate sector in India is one of the lar+est in the world. havin+:

5 #ercent of all Gualified doctors. @( #ercent of dis#ensaries 6 #ercent of hos#itals in India /elon+ to the #rivate sector

2ith the /oo'in+ econo'y and Hi+h literacy rates. the ca#acity to s#end alon+ with the ca#acity of the #eo#le to #ay has increased. 1s #eo#le earnin+ & education level increase with it will lead to 'ore s#endin+ in health care. The increase in #urchasin+ #ower & education will lead to a nu'/er of #ositive trends for the Health care industry as under-'entioned:o o o

2hen fa'ilies 'ove fro' 'iddle inco'e to rich. the hi+hest +rowth in s#endin+ is recorded in healthcare. The to# !! #er cent inco'e earners in India accounted for @( #er cent of total #rivate e6#enditure on healthcare. The #ro#ortion of households in the low Finco'e +rou# has declined si+nificantly and the M&reat Indian Hiddle-class0 has co'e of a+e. 2ith Kiteracy the Aer-ca#ita e6#enditures on healthcare rise with hi+her education levels.

Households that have hi+her education levels tend to s#end 'ore #er illness to (

The <e'o+ra#hics Hiddle Inco'e 9lass in India to +row to % Hillion /y 2 1(.

It has /een noted in a nu'/er of researches & surveys. that there is a alar'in+ increase in lifestyle-related diseases. The shift in disease #rofiles fro' infectious to lifestyle-related diseases is e6#ected to raise e6#enditures #er treat'ent. Kifestyle-related diseases are ty#ically 'ore e6#ensive to treat than infectious ones. India?s disease #rofile is e6#ected to follow the sa'e #attern as in develo#ed econo'ies. <iseases - cardiovascular. asth'a and cancer have /eco'e the 'ost i'#ortant se+'ents & in#atient s#endin+ is e6#ected to rise fro' !4C to nearly ( C. The +overn'ent of India has also identified Healthcare as the #riority section for focused attention. Heasures ta=en /y the +overn'ent to sti'ulate 'ar=et develo#'ent in the healthcare sector are as follows:o

P Beduction in I'#ort duty on 'edical eGui#'ent P <e#reciation Ki'it on 'edical eGui#'ent increased P 9usto's duty reduced P The &overn'ent has announced Inco'e ta6 e6e'#tion of the Inco'e Ta6 for the first five years. to hos#itals set u# in rural areas P :SQ (6 'illion will /e ear'ar=ed for HINI1I<S control #ro+ra''e throu+h the use of #ri'ary health centers. #revention of dru+ a/use etc.

Inar+ua/ly the #otential 'ar=et for insurance /uyers is tre'endous in India and offers +reat sco#e for +rowth. 2hile esti'atin+ the #otential of the Indian insurance 'ar=et we are often te'#ted to loo= at it fro' the #ers#ective of 'acro-econo'ic varia/les li=e the ratio of #re'iu' to &<A "which is indeed co'#aratively low in India$ /ut the fact is that the nu'/er of #otential /uyers of insurance in India is certainly attractive. However. this i+nores the difficulties of a##roachin+ this #o#ulation. ;ew entrants in other 'ass industries such as consu'er #roducts or retail /an=in+ have discovered this after /urnin+ their fin+ers. Huch of the de'and 'ay not /e accessi/le /ecause of #oor distri/ution. lar+e distances or hi+h costs relative to returns.

1lso. 'ost new entrants have a tendency to tar+et the /usiness of e6istin+ co'#anies rather than e6#andin+ the 'ar=et. this is 'yo#ic. This not only leads to intense co'#etition for the new #layers and their 'uch of their effort is s#ent on tryin+ to ca#ture e6istin+ custo'ers /y offerin+ /etter service or other advanta+es. Eet. the /enefits of this strate+y are li=ely to /e li'ited. )or e6a'#le. ( C of the current de'and for +eneral insurance co'es fro' the cor#orate se+'ent. The cor#orate are li=ely to sho# around for the /est rates. #roducts and service. ;evertheless. the cor#orate se+'ent. as a hole will not /e a /i+ +rowth area for new entrants. This is /ecause #enetration is already +ood here. co'#anies receive +ood service /ecause of their si3e and rates are tariff +overned. In /oth volu'es and #rofita/ility. therefore. the sco#e for e6#ansion is 'odest. 1 /etter a##roach 'ay /e to e6a'ine s#ecific niches where de'and can /e 'et or sti'ulated. li=e tar+etin+ the chief wa+e earners and 'ore i'#ortantly. 'ovin+ to rural India. The 'ain thrust of a new insurer?s strate+y should /e to sti'ulate de'and in areas that are currently not served at all. If insurers are to ta=e advanta+e of India?s lar+e #o#ulation and reach a #rofita/le 'ass of custo'ers. new distri/ution avenues and alliances will /e i'#erative. This is also true for the nationali3ed cor#orations. which 'ust find fresh avenues to reach e6istin+ and new custo'ers. There would /e su/stantial shifts in the distri/ution of insurance in India.