Group health insurance is slowly becoming a necessity for most companies, regardless of size. The rising cost of healthcare makes it even more important.
Every company needs to look after its employees, and purchasing group health insurance is more cost-effective than asking employees to avail of their own individual health plans. This is because the per life premium in case of a group health insurance works out to be significantly lower than in case of an individual health policy.
The good news is that over the last couple of decades, purchasing group health insurance plans have been increasingly becoming easier for companies. Moreover this increased penetration is also making Insurers to come up with better product offerings.
What’s on this page?
What makes Group Health Insurance Affordable and Accessible
Digital Transformation
The era of digital transformation is well underway. Digital transformation is the phrase that is used to refer to the increasing utilization and adoption of technological systems to run business operations.
Every company these days is adopting the latest IT tools in order to remain competitive in an ever-changing marketplace.
Digitization has made it possible for companies to lower their expenses and costs. Since companies can now afford to operate more cheaply, it is no surprise that the benefits are being passed on to the consumers.
This means that digitization is making goods and services more cost-effective for consumers. This phenomenon is especially true in the Indian insurance market.
Insurance companies that provide group health insurance policies are able to cut costs by using specialized software which is now available for insurance companies. This type of group health insurance software makes it much easier to handle the administrative work that is involved in insurance.
Since administration makes a large part of the cost of insurance, the end result is that group insurance policies are getting cheaper for companies.
Personalized and Flexible Products
Earlier, group health insurance plans used to be highly rigid. Every employee in the company would need to opt for the exact same plan without any changes. This was not an optimum system since the needs for different employees were very different.
For example, certain employees had families while others did not. The employees who had families would need insurance coverage for their dependents as well, while those who did not have dependents could work without family cover.
Hence, there was a need felt by companies to offer more personalized health insurance to their employees.
Thankfully, the times have changed over the last couple of decades. Nowadays, insurance companies can offer highly flexible group insurance plans which cater to the needs of each individual employee. The individual employee can pick and choose different add-ons in their policy to make it suitable for their needs.
Greater Competition and Options for Consumers
Over the last couple of decades, there has been a proliferation of companies that offer insurance services. This means that there is much greater competition between companies in the insurance market.
This spells good news for people looking for insurance. The rise in competition does not just mean lower prices and lower margins, it also means that the option available to consumers is far greater.
Every insurance company tries to differentiate itself by offering specialized insurance products. This means that users can pick and choose insurance products that exactly match their needs and at a lower price point.
Insurance aggregators exist in the Indian insurance market which provides a bird’s eye view of the different group health insurance plans available. This makes it much easier for consumers to choose the right policy out of the vast field of options.
Increased Awareness
Covid-19 proved to be a landmark event for the health insurance industry. Everyone was suddenly aware of their mortalities. People as well as Companies were now aware of health risks. Even Companies that were not providing health benefits to employees started contemplating the need for a health insurance policy. As the number of number of people demanding health insurance increased, so did the product offerings and the number of insurance companies, thereby making the product more affordable as well as accessible.
Moderation of Prices
Indian insurance companies have changed how they set their prices because of digital transformation and more competition. Gone are the days when you had to negotiate hard with your insurance company for even the slightest benefit.
Nowadays, the same service is provided at the same price by every insurance company. This means that bargaining and negotiation are no longer factors in picking the right health insurance product.
The cost of the insurance policy is calculated by computers according to a pre-set algorithm depending on actuarial science. This cost is the premium which is charged by insurance companies from their customers.
Since the prices have been made standard, it means that users can expect the best price from their insurance providers without the need for negotiation.
Conclusion
It is extremely good news for companies that group health insurance plans are getting more affordable and accessible. It means that companies can take care of their employees without breaking the bank.
In today’s market, when companies are in fierce competition for talent, it is even more necessary to provide benefits that employees can use to increase loyalty and retention rates.
Frequently Asked Questions (FAQs)
- How exactly does digitization lead to lower costs for group health insurance?
Digitization streamlines various aspects of insurance administration, including policy management, claims processing, and customer service. Automated workflows, online portals, and data analytics reduce manual effort, paperwork, and processing times, leading to significant cost efficiencies for insurers. These savings are then reflected in lower premiums for companies.
- Can I customize a group health insurance plan to include specific benefits that are relevant to my employees’ needs, or am I limited to pre-set packages?
Most group health insurance plans offer a high degree of flexibility and customization. You can often choose from a variety of add-on covers, such as critical illness coverage, maternity benefits, dental and vision care, and wellness.
- With so many insurance providers offering group health insurance, how can I compare plans and choose the best one for my company?
You might think of availing the services of an Insurance Broker or an Agent. The Insurance Broker works with you to understand your requirements and then benchmarks these in the market to get the best product at the optimal price.
- Has the increased awareness of health risks after the COVID-19 pandemic led to any specific changes in group health insurance offerings?
Yes, the pandemic heightened awareness of the importance of health insurance, prompting insurers to innovate and introduce more comprehensive and flexible plans. Many now offer coverage for telemedicine consultations, and mental health services, reflecting the evolving needs of employees in a post-pandemic world.
- If insurance companies are using standardized pricing algorithms, does that mean there’s no room for negotiation on premiums?
While standardized pricing ensures transparency and fairness, the risk apetite of each Insurer differs. Moreover there is a constant influx of new insurers in the market; this ensures that Insurers keep their pricing in keep to retain and attract new clients.
