Page 22 - Life Insurance Today May 2016

as it forms a vital part of health care financing by providing Groups, Tailor made Policies for groups, Parivar as a floater
protection to policy holders against illness/injury by either cover for families, Vidyarthi for students, Varistha for the
reimbursing expenses of hospitalization or paying upfront senior citizens.
to the hospitals.
Policies for the economically weaker strata include Jan
With the rise in income levels, changes in demographics Arogya, Universal Health, Swasthya Bima etc. The portfolio
and increase in health awareness customers are also includes Critical Illness which is a benefit Policy for
demanding superior products and better service from individuals, Corporates, businessmen. Executives, tourists,
insurance companies offering health insurance. Prior to students going abroad can insure under an Overseas
1986, health insurance meant, mostly tailor-made group Mediclaim Policy - whereas in Life Sector 'Medical
policies offered by different companies. Insurance' coverages are provided as "Rider Benefits only.

It was in 1986 that the Mediclaim policy was introduced It can be argued that it is difficult to apply the standard
as a standard cover and has since remained the single efficient market hypothesis (efficient market theory) to
most sold health insurance product. The Policy has understand the stock market bubble that ended in 2000
undergone a number of modifications with a major shift and collapsed thereafter. Advocates of Rational
in 2000 with respect to the procedure of settlement of Expectations may say that the problem of ascertaining all
claims, graduating from a contract of indemnity to a Policy the pertinent effects of the stock-market crash is a great
with cashless facility with claims being settled through challenge. Although Indian Insurance Market (i.e. both life
TPAs. & general) is absolutely Brokers’ Driven, Health Insurance
is dominated by Bancassurance that is the marketing of
The Mediclaim Policy has been reintroduced in 2007 with insurance products through branches of banks serving as
sub-limits for various benefits and other features. Along channels of distribution.
with a new version of Mediclaim Policy, Companies have
recently introduced a few health insurance products for The concept of bancassurance having its origin in France,
various segments such as Mediclaim for individuals and now forms a dominant model in a number of countries and
is also evolving in India. Despite having a relatively
short history in India, bancassurance is already a major
focus for many life and non life insurance companies. The
main factor that gives a fillip to the bancassurance in India
is the existence of a large and organized banking
infrastructure.

With 66,000 branches spread in urban and rural areas, 300
million retail banking customers, 65% house hold
investment, saving bank deposit accounts with aggregate
balances of Rs 2,79,000 crores, knowledge of saving
patterns of customer, low cost of distribution, banks are
fastest emerging channel of distribution. Bancassurance
for banks is a means of product diversification and a source
of additional fee income.

Effectively mining their customer’s database and using
their distribution systems, banks can provide the necessary
impetus to convert a huge number of insurance leads into
sales. Insurer's extensive geographical spread and

What you measure and reward is what you're going to get.

22 May 2016 Life Insurance Today