Health Insurers Yet to Establish in Indian Rural Markets

General insurance companies are still finding it tough to go in rural and semi-urban markets. One of the officials from Apollo Hospital said that some state-funded insurance companies are driving affordability in small towns and bringing majority of people in those states under insurance cover.

On the other side, an official from ICICI Lombard said that the government-run schemes such as Rashtriya Swasthya Bima Yojana have increasing penetration in rural areas, but retail insurance penetrations also challenging in rural areas.

Health insurance penetration in India is less than 5% among the population and it is observed that it is even lower in tier 2 and tier 3 cities due to poor awareness of the insurance products. In these cities much of the healthcare expenses are still funded by the households as the rural individual have to borrow money or sell assets to meet healthcare/medical expenses.

In order to reach out these rural areas, many insurers are tying up with the regional rural banks. This helps the insurers to meet the IRDA mandate of covering certain quota of business in rural markets. An official from the insurance industry said that there are a few encouraging factors like – springing up of small hospitals and clinics in small towns, education about the diseases, rural-income growth helps in getting affordable healthcare in the rural areas.

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