Cashless preferred for high cost treatment and medical inflation seen as moderating says the ICICI Lombard 2014 trends report
ICICI Lombard General Insurance has released the key trends for 2014 and its outlook for 2015 for the Health and Motor insurance segments. Here are the important points and Moneylife's comments -
• Use of Tertiary hospitals increased from 43% to 49% in case of retail customers which influenced treatment costs. 32% of corporate cases are referred to tertiary hospitals.
Including tertiary hospitals (Hinduja, Lilavati, Breach Candy, etc) for cashless is good for consumers, but it can mean that the insured will go to these hospitals even for minor ailments. Insurance companies often overlook smaller nursing homes for including in cashless network, which can push the insured to go for tertiary hospitals.
• Medical inflation was seen as moderating, especially in the last three years. Mediclaim premium of private and government insurers have drastically increased in recent times and we hope it will pause or increase minimally going forward
• Cashless route continued to be preferred for high cost treatments. Cashless is an important feature for policyholders. The list of hospitals on cashless network, also known as preferred-provider-network (PPN), varies across insurance companies and is a dynamically changing list. The cashless hospital when you purchased the policy may no longer be on the network after some time. It causes inconvenience to the insured who may buy specific insurer mediclaim product after finding close-by decent hospitals to be on the PPN list. It is disappointing for the insured when the hospital is removed from the PPN list. Moreover, government insurers do not have prominent tertiary hospitals on their PPN in major cities. Recently, Pune, Chinchwad-Pimpri hospitals have stopped cashless for government insurers, retail customers even when group mediclaim customers continue to enjoy cashless
• The key disease trends remained consistent in 2014 led by genito urinary, eye disorders, respiratory disorders, injuries and digestive ailments
• The pattern was similar for critical illness as neoplasm, metabol ailments, heart ailments continued to dominate
Among the key trends likely to emerge/ strengthen in 2015 include:
• Rising demand for OPD as is evident from initial response in group health segment. Mediclaim covering OPD (consultation, diagnostics) is an expensive product which is marketed for fully utilizing Sec 80D limit of Rs15,000 (Rs20,000 for senior citizens). If an insurer offers mediclaim covering OPD at an affordable premium, then the product will be a success.
• Consultation services driving OPD usage at 73%, while diagnostics remains at 27% usage. Insurers can tie-up private primary healthcare providers and general physicians from different cities to offer discounted consultation fees for mediclaim policyholders who may or may not have opted for OPD cover.
• E-cashless module will gain prominence in the year ahead
• Impact of natural calamities was clearly evident with 40% increase in claims arising out of storms/cyclones
• Motor Insurance continued on the growth path, though pace of growth slowed (9.8% in April to November 2014 compared to 17.1% in April to November 2013)
• Private car sales are being driven by hatchbacks, 40% growth in April to November sales
• Bikes segment continued to witness muted demand, scooters (132% growth) provided a silver lining
Among the key trends likely to emerge/strengthen in 2015 include:
• Industry to benefit from road safety measures focused on increasing governance on manufacturers and penalties on violations
• Introduction of DAIR (Detailed Accident Investigation Report) to reduce reporting time for insurers, waiting time for claimants
• Usage based insurance, though nascent, may see an uptrend in the coming year