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Ayushman Bharat a boost to insurance

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Ayushman Bharat a boost to insuranceChennai: The Centre’s Ayushman Bharat, set to cover 10 crore households, might prove a significant boost to the general insurance industry.

“Three years ago when the general insurance industry was going through a slump in demand and bleeding from the losses in its motor and health portfolios — it was the government’s crop insurance scheme that helped spur the sector. The national health insurance like crop insurance will help penetration and margins for the industry,” said the CMD of a public-sector insurer. Widespread participation in Pradhan Mantri Fasal Bima Yojana(PMFBY), has pushed crop insurance penetration nearly four-fold in the last one year — with premium income increasing to Rs 20,097 crore from Rs 5,551 crore. The sector’s contribution to growth in the non-life business has significantly increased. From contributing only 6% to total general insurance premium income in 2015-16, crop insurance now forms 16% of the industry’s income in 2016-17.

And the ‘Ayushman Bharat’ programme aimed at addressing health holistically by covering primary, secondary and tertiary care might give added impetus to the insurance industry. With a budget allocation of Rs 1,200 crore for 2018-19, the

National Health Protection Scheme aims to cover over 10 crore poor and vulnerable families or about 50 crore beneficiaries with coverage of up to Rs 5 lakh for secondary and tertiary care hospitalization.

Ratings agency CRISIL said that this thrust towards affordable and quality healthcare will boost insurance penetration from the current 33% to more than 50% on implementation. “As of fiscal 2017, nearly 43.8 crore persons were covered under various health insurance schemes, including 33.5 million under various government sponsored schemes including Rashtriya Swasthya Bima Yojna (RSBY), introduced by the UPA. With the new scheme, the overall coverage in India will increase to more than 65 crore persons,” said Binaifer Jehani, director, CRISIL.

However, the mechanism and vehicle for raising the humongous resources required for the moves will be a key monitorable, said analysts. “The National Health Mission has seen cumulative expenditure of Rs 53,200 crore in the last two fiscals and the government has already allocated budgetary support of Rs 30,100 crore for fiscal 2019. During this period, the government has also spent Rs 3,800 crore on insurance schemes and has already allocated budgetary support of Rs 3,600 crore for fiscal 2019. The execution framework for this health insurance scheme is not clear,” said CRISIL’s Jehani.

Data with IRDAI shows that existing health scheme RSBY, the number of states participating in it has fallen to 15, the lowest since 2008, when the scheme was launched. With the Centre gearing up for ‘Ayushman Bharat’ this will fulfill an existing gap in the industry, say insurers.



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