India’s insurance industry faces a critical time
An estimated 4.2 million Indian citizens have become eligible for the government-run national insurance scheme, but with few resources to fund the coverage, a small number of insurers are struggling to survive.
India’s government-sponsored insurance industry is one of the country’s biggest, accounting for more than 70 percent of gross domestic product (GDP).
It covers more than 1.3 billion people, with roughly one in five households, or 1.1 billion, in India.
The government-backed insurance industry provides affordable coverage for all types of households, including those without access to formal healthcare facilities, but is facing a critical period in its growth and viability, according to a report released by the Institute of Medical Research.
The Institute of Health Policy and Governance (IHPG) at the University of Delhi, India’s largest research institution, said there were a total of around 2.4 million enrollees in the national insurance system.
The government-based insurance industry’s share of the market was around 25 percent.
“It is not a sustainable industry,” said Shashi Bhatt, executive director of the IHPG.
“Insurance companies need to invest heavily in their businesses and start creating a better product and service to meet the needs of the consumers.”
The government plans to phase out the national healthcare scheme by 2020, but it does not have the resources to cover all the population.
The IHpg said there is a shortage of about 1.8 billion rupees ($170 million) in monthly subsidies to cover uninsured citizens.
The IHegP report said that in the past three years, the insurance industry has lost around 5.2 percent of its market share, with the insurance companies’ share falling from a high of about 80 percent in 2015 to around 20 percent in 2020.
The industry has been in a severe crisis in recent years, due to the financial crunch, but the lack of investment in its business has also contributed to the slump.
According to the report, insurance companies are facing a financial crunch.
According to data from the insurance department of the Ministry of Health and Family Welfare, the industry has spent around Rs1.75 lakh crore (around $2.2 billion) to cover the 1.7 billion citizens who are eligible for coverage under the national scheme.
In 2016, the IHPG said that about 3.5 percent of Indian citizens are not eligible for insurance coverage, meaning they are either not in the insurance company or are in poor health.
The Indian government has announced that it would increase its coverage by a further 2 percent in 2021.
But, according the IhpG report, the government has not been able to meet its obligations under the scheme.
The report also found that India’s overall healthcare system is one that is “relatively poor” and “not sustainable.”
The report highlighted the fact that the healthcare system in India is one where hospitals are under-staffed, and that there is poor coordination between the healthcare authorities and the private insurance companies.
The authors also said that there was “an overall lack of transparency in how the national plan is funded and administered.”
The lack of accountability in the government’s plan to fund healthcare also contributes to the crisis in the industry, they added.