Soon, banks to sell specialised health insurance products

You may be able to bring home a comprehensive health plan from a specialised health insurance company from your regular bank branch, if the IRDA's bancassurance draft guidelines are implemented.

As a customer your choice of health insurance products are now wider. That may not necessarily come cheap. But it is good news for standalone health insurance companies, such as Max Bupa, Apollo Munich and Star Health, which will benefit from the IRDA's new guidelines (on insurers' tie-up with banks for distribution).

Under the existing bancassurance guidelines, banks were allowed to tie up with one life and one non-life company. Banks preferred partnering insurers offering multi-line (high ticket) products such as motor and fire insurance.

But now they will be able to tie up with one insurance company in the life, non-life and specialised health insurance space. They will, however, be allowed to do it only in a specified number of States.

MORE CHOICE

At the same time, specialised health insurers can also now tie up with multiple banks for selling their products across different States.

“It is an exciting opportunity for us and these guidelines definitely do open up the bancassurance channel for us,” said Dr Damien Marmion, CEO, Max Bupa Health Insurance.

The guidelines have further stipulated that if general insurer does not have any health product to distribute, the bancassurance agent may tie up with one more general insurance company, carrying on exclusively the business of health insurance.

Experts from the insurance industry feel that apart from opening up the avenue for health insurers, the guidelines will also help boost health insurance in the under-penetrated Indian market.

“We welcome any initiative that promotes access to better health care for the people. Today, it is estimated that the gap between the total cost of healthcare incurred by Indians and the amount covered by health insurance is as high as $57 billion,” Mr Antony Jacob, CEO, Apollo Munich Health Insurance.

Market potential

“Healthcare is an enterprise that is growing rapidly, and spends in this sector will soon touch $200-250 billion,” Mr Jacob added.

“IRDA's proposal would especially benefit general insurance and health insurance companies as they have substantially underexploited the bank distribution channel. Especially for health insurance, which has so far depended on direct selling model, this could provide a boost to broad-base their risks and lower the premium rates,” said Mr R. Krishnamurthy, Managing Director (Products, Distribution and Markets), Towers Watson — a global risk-consulting firm.

deepa.n@thehindu.co.in