Health Insurance will experience tremendous growth in Indian market in coming decade. Middle class is growing thanks to growth rate of 8% to 10%. Increase in disposable income for middle class will insure that Health insurance will grow and increase its penetration in Indian market. Current penetration of Health insurance in India is very low somewhere in lower single digit. Further average age of Indian population is very low and India is a young country and going ahead average age is going to increase in India , hence increased medical cost and demand for Health Insurance. Medical Inflation plays a very important role in making Health Insurance a costly and complex affair.
Due to Medical Inflation premiums are increased every year making it hard for insurance companies to sell its products in market. Further, inflation as high as in late teens make it difficult to absorb the rise in claim cost. Brighter side is Health cost in India is among the lowest in the world and penetration level of Health Insurance is also one of the lowest in the world. On the other hand the quality of health service is also far far away from the desired levels. (May be the reason for low health cost and quality is low penetration of health insurance.)
Actuaries in Health Insurance have a major role to play in Indian scenario. To change and modify the way data is collected (both claims and policy). Data which is available right now to actuaries working in Indian health insurance companies is very less and that too of low quality. Lot of work has to be done to ensure that proper data is recorded which will enable actuaries to work on advance techniques like Portfolio Monitoring and Pricing in Health insurance.
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One must take into purview the inflation rates and its effects on goods prices. This will help them have a better understanding of the insurance coverage that one must have.
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