Page 54 - The Insurance Times May 2025

areas, 87 people received no reimbursement, and the re- der State Health Insurance in urban areas, 79 per cent did
maining 13 had only Rs. 57.5 reimbursed for every Rs. 100 not receive any reimbursement for their hospitalisation ex-
spent. These numbers are concerning and indicate a need penses. For those who did receive reimbursements, the av-
for urgent reform in healthcare spending and reimbursement erage amount covered was Rs. 60.5 for every Rs. 100 spent.
policies. The percentage of households without any reim- Interestingly, the percentage of households not receiving
bursement varies slightly by income group, ranging from reimbursement increases slightly with income, ranging from
80.9 per cent for the lowest income group to 88.3 per cent 72.4 per cent in the highest income group to 80.2 per cent
for the highest income group. in the lowest income group.

In urban areas, the situation is only marginally better. A In rural areas, 82.4 per cent of households insured under
staggering 86.7 per cent of households insured solely under State Health Insurance Schemes did not receive any reim-
ABPMJAY that had hospitalisation did not receive reimburse- bursement for their medical expenses, with an average re-
ment for their expenses. However, for those who did receive imbursement of Rs. 60.8 for every Rs. 100 spent. Notably,
reimbursement, the amount was more substantial, with an the lack of reimbursement is fairly consistent across income
average of Rs. 70 reimbursed for every Rs. 100 spent. The groups in rural areas, with little variation between the high-
variation in reimbursement levels across income groups in est and lowest income brackets.
urban areas is relatively narrow, ranging from 85.4 per cent
for the lowest income group to 89.8 per cent for the high- Overall, the decentralised State Health Insurance Schemes
est income group. This suggests that the ABPMJAY scheme appear to offer more consistency in coverage and reim-
is more consistently implemented in urban areas, offering bursement rates across both rural and urban areas and
slightly better support than in rural areas. across different income groups, compared to the Central
government's ABPMJAY. While neither scheme provides suf-
State Schemes ficient reimbursement, the State Health Insurance Schemes

The second type of insurance, State Health Insurance seem to offer a more predictable level of support.
Schemes, which includes any insurance scheme launched by
State governments, also cover a significant portion of the Policymakers must focus on improving reimbursement
population. In urban areas, 17.4 per cent of households and mechanisms to cover a larger proportion of hospitalisation
in rural areas, 23.4 per cent of households are insured solely costs and ensure that vulnerable income groups receive fair
under these schemes. Among households insured only un- and equitable support. (Source: BusinessLine)

Reputational Risk

Reputational risk refers to the potential damage to a company's public image, stakeholder trust, or overall credibility
due to perceived negative behavior, events, or outcomes. Unlike financial or operational risks, reputational risk is
intangible but can have significant consequences, including loss of customers, decreased revenue, reduced investor
confidence, and even regulatory scrutiny. This type of risk can arise from various sources—ethical breaches, poor
customer service, executive misconduct, data breaches, environmental violations, or failure to meet stakeholder
expectations. The speed and scale at which news spreads on social media and digital platforms have further amplified
reputational risks, often causing immediate and widespread impact.

Managing reputational risk requires a proactive approach that includes ethical governance, transparent communica-
tion, and alignment between brand promise and stakeholder experience. Organizations must continuously monitor
public sentiment, engage with customers and communities, and have crisis management plans ready to address
reputational threats swiftly and effectively. A strong corporate culture, responsible leadership, and stakeholder en-
gagement are essential to building resilience against reputational damage. Companies must ensure all employees
understand the importance of brand reputation and are trained to act in ways that uphold organizational values.
Importantly, reputation is not just managed in crises—it is built over time through consistent actions, quality service,
and ethical behavior. Firms that recover from reputational setbacks often do so because of their pre-existing goodwill
and swift, sincere responses. In today’s environment, reputational risk has become a board-level concern, warranting
strategic attention alongside financial and operational risks.

50 May 2025 The Insurance Times