The domestic health insurance market is expected to rise to $12 billion over the next eight years from the current level of $4 billion per annum, according to a study conducted by the Associated Chambers of Commerce and Industry (Asocham).
The study, released by Assocham president K P Singh yesterday, shows that despite having high potential, non-life insurance premium in the country accounts for only 0.58 per cent of the gross domestic product (GDP), as compared with an average of 7.1 per cent in the industrialised countries.
"This is primarily because in India non-life insurance is seen as an unnecessary expenditure," an Assocham press release, quoting the study, said.
The study has attributed the low spending on non-life health insurance despite the rise in life expectancy to absence of financing of such schemes.
Nearly 10 per cent of the total premium income of Rs 100 crore of the General Insurance Corporati- on from mediclaim came from its own employees, the release said.
The study has identified absence of affiliation of insurance companies with hospitals and other medical infrastructure support as factors that hindered spread of health insurance in India.
The medical systems and procedures of treatment vary largely in India. Systems like allopathic, ayurvedic and homeopathic exist and, therefore, correct valuation and authenticity of insurers' claim is difficult to judge, the study says.
The chamber study has also identified low customer service levels, high payout time as two major reasons for the erosion OF business in the non-life insurance schemes. Since non-life insurance involves renewal of policies every year, it results in huge loss of rollover premiums
