Mega healthcare plan to boost India’s insurance sector: S&P



? Cool Title but what is the news?

Most of you would be well aware that the Budget is revealed. Did you go through the healthcare schemes that were announced? Well, we’re right here to help you. The S&P Global Ratings spoke a lot of things on this front. It said that the healthcare scheme announced in the Budget will be a “game changer” for India’s health industry and produce substantial growth in insurers’ premiums.

? Okay, but what does it mean?

It vividly means that the insurance  sector is anticipated to get a boost once the NHPS scheme is executed. It reflects the government’s purpose to expand the country’s protection umbrella. The ratings also added that this could have far-reaching implications for the domestic insurance sector. Based on the scheme’s vast coverage area and varied scope, it is believed to become a revolution in the health industry. It added “An effectively executed National Health Protection Scheme (NHPS) will bring coverage to 40 per cent of the population and generate substantial growth in health insurers’ premiums and increased cross-selling opportunities.”

? Why should I care?

The bigger picture:

If you’re aloof, the scheme would be the world’s largest healthcare program. It was rolled out on the 1st of February, in the Union Budget 2018-19. It provided medical cover of up to Rs 5 lakh to almost 10 crore poor and vulnerable families, constituting 40 percent of India’s total population. The ratings also expected insurers to launch a new range of products with healthier coverage. This should be done to capitalise on increased tax incentives between rising medical inflation. Also, in the budget, the Government has proposed to merge three major public sector insurance companies. This move is expected to lessen the competition and promote improved underwriting discipline in the domestic market.

For you personally:

So you’d be curious to know the three insurers, no? They are – United India Insurance, National Insurance and the Oriental Insurance. They together contribute around 30 percent of market share of the non-life-insurance market in India. Moreover, they have a premium book of more than Rs 40,000 crore. S&P Global Ratings credit analyst Trupti Kulkarni stated that merging these three would enhance risk retention. Also, it would promote better managed solvency levels in the Indian insurance market.

Predictions are many. Let’s see what actually comes out to be true in the healthcare program. Till then, take pride that our country launched the world’s largest healthcare program!

Source: Economic Times

 

Written by

Vedant Kaushik