The healthcare insurance industry needs to develop infrastructure and deliver affordable healthcare to the micro, small and medium enterprise (MSME) sector, which has a 117 million strong work force, according to a recent report.
Country’s health insurance penetration is less than 30 per cent of the population covered by any type of health insurance policy in the country, it elaborated.
“MSMEs form the larger part of India’s unorganized sector, which leaves a majority of the sector’s workforce without any social security. This section of the society along with their families need to be brought in the fold of healthcare protection not only as a part of a social initiative but also as a lever for improving workforce productivity,” FICCI and KPMG said in its report titled, “MSME group health insurance penetration in India”.
“Providing healthcare coverage is also an important aspect of employee welfare and this remains underpenetrated among MSMEs,” it added.
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The survey said that approximately 90 per cent MSMEs do not offer any financial aid for medical purposes to the families of employees and almost no micro and medium enterprises offer financial support to their employees and their families.
MSMEs preferred a basic cover of personal accident and critical illness with a focus on a reduction in premiums and coverage of employees only and they primarily prefer to purchase insurance through broking channels and bancassurance, with group health insurance penetration through online channels at minimal level of about 6 per cent.
Reaching out to MSME for health insurance has remained a massive challenge for the industry owing to lack of data, diversity and unstructured framework of organisation, it explained.
Customisation of group health insurance products, standard advisories and putting up a distributions channel has been some of the many challenges that one has to face.
“The goal of improving healthcare coverage to the MSME workforce can be fulfilled through both development of infrastructure and as well as delivering effective and affordable healthcare,” KPMG in India partner and head – insurance sector Shashwat Sharma said.
“The Government, the insurance regulator IRDAI and the insurance industry can together play a critical role in achieving this objective,” Sharma added.