-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 1
A Project Report on
Management Research Project
Of
Customers Perception toward Health Insurance Empirical Study
in
Ahmadabad Region
SUBMITTED BY:-
Exam No Name
01 Anand Aarti
02 Desai Gunjan
09 Rahul Nisarta
SUBMITTED TO:-
Ganpat University
GANPAT UNIVERSITY
Center for Management Studies
Ahmadabad
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 2
Certificate from the Faculty Guide
This is to certify that the dissertation submitted in partial
fulfillment for the award of MBA (FS)
of Center For Management Study, Ganpat University is a result of
the bonafide research work
carried out by Mr RAHUL NISARTA, Mr GUNJAN DESAI And Miss ANAND
AARTI under
my supervision and guidance. No part of this report has been
submitted for award of any other
degree, diploma, fellowship or other similar titles or prizes.
The work has also not been
published in any journals/Magazines.
Signature of the Faculty Guide: ______________
Name of Faculty Guide: Prof. Umesh Pithadiya
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 3
Students Declaration
I hereby declare that this report, submitted in partial
fulfillment of the requirement for the award
for the MBA (FS), to Center For Management Study, Ganpat
University is my original work and
not used anywhere for award of any degree or diploma or
fellowship or for similar titles or
prizes.
I further certify that without any objection or condition
subject to the permission of the company
where I did my summer project, I grant the rights to Center For
Management Study, Ganpat
University to publish any part of the project if they deem fit
in journals/Magazines and
newspapers etc. without my permission.
Signature:-
MBA Program (FS) Semester IV
Exam No Name
01 Anand Aarti
02 Desai Gunjan
09 Rahul Nisarta
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 4
PREFACE
This Project Report has been prepared in partial fulfillment of
the requirement for the Subject:
Project (Financial Services) of the Semester IV in the Semester
2015.
For preparing the Research Project Report, The blend of learning
and knowledge acquired
during our practical studies at the company is presented in this
Project Report.
Our main focus and study was on Customers Perception toward
Health Insurance Empirical
Study on Ahmadabad region.
We have put up my best efforts and enumerated every possible
information while collecting
Primary and secondary data.
Lastly, we have tried our level best to prepare the best
informative report.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 5
ACKNOWLEDGEMENT
It was indeed an opportunity for us to do research Customers
Perception toward Health
Insurance Empirical Study on Ahmadabad Region. To Prepare a
Project Report on the same
during Semester IV. During our Research study preparation, we
learn many interesting things
about the Research, along with the aspects of its process and as
a whole.
We would here by take this opportunity to show our gratitude
towards all our faculties for
what we have learnt during Research Study. A good response,
explanation of concepts and co-
operation given by whole staff helped us in gaining knowledge
and solving our queries.
I feel immense pleasure to thank Prof. Umesh Pithadiya, C.M.S.
Ganpat University. For
making available all faculties in fulfill the requirements for
the research report.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 6
TABLE OF CONTENTS FOR PROJECT REPORT
Sr.No Particular Page
No.
Front Page I
Certificate II
Preface III
Acknowledgement IV
1 Chapter-1
Introduction 9
2 Chapter-2
History Of Insurance 12
3 Chapter-3
Literature Review 30
4 Chapter-4
Health Insurance In India 33
5 Chapter-5
Research Methodology 46
6 Chapter-6
Data Analysis 50
Anova Test 72
7 Chapter-7
Finding 79
8 Chapter-8
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 7
Conclusion 81
9 Chapter-9
Bibliography 83
Annexture
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 8
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 9
Introduction
1. Background:-
Over the last 50 years India has achieved a lot in terms of
health improvement. But still India is
way behind many fast developing countries such as China, Vietnam
and Sri Lanka in health
indicators (Satia et al 1999). In case of government funded
health care system, the quality and
access of services has always remained major concern. A very
rapidly growing private health
market has developed in India. This private sector bridges most
of the gaps between what
government offers and what people need. However, with
proliferation of various health care
technologies and general price rise, the cost of care has also
become very expensive and
unaffordable to large segment of population. The government and
people have started exploring
various health financing options to manage problems arising out
of growing set of complexities
of private sector growth, increasing cost of care and changing
epidemiological pattern of
diseases.
The new economic policy and liberalization process followed by
the Government of India since
1991 paved the way for privatization of insurance sector in the
country. Health insurance, which
remained highly underdeveloped and a less significant segment of
the product portfolios of the
nationalized insurance companies in India, is now poised for a
fundamental change in its
approach and management. The Insurance Regulatory and
Development Authority (IRDA) Bill,
recently passed in the Indian Parliament, is important beginning
of changes having significant
implications for the health sector.
The privatization of insurance and constitution IRDA envisage to
improve the performance of
the state insurance sector in the country by increasing benefits
from competition in terms of
lowered costs and increased level of consumer satisfaction.
However, the implications of the
entry of private insurance companies in health sector are not
very clear. The recent policy
changes will have been far reaching and would have major
implications for the growth and
development of the health sector. There are several contentious
issues pertaining to development
in this sector and these need critical examination. These also
highlight the critical need for policy
formulation and assessment. Unless privatization and development
of health insurance is
managed well it may have negative impact of health care
especially to a large segment of
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 10
population in the country. If it is well managed then it can
improve access to care and health
status in the country very rapidly.
Health insurance as it is different from other segments of
insurance business is more complex
because of serious conflicts arising out of adverse selection,
moral hazard, and information gap
problems. For example, experiences from other countries suggest
that the entry of private firms
into the health insurance sector, if not properly regulated,
does have adverse consequences for
the costs of care, equity, consumer satisfaction, fraud and
ethical standards. The IRDA would
have a significant role in the regulation of this sector and
responsibility to minimize the
unintended consequences of this change.
Health sector policy formulation, assessment and implementation
is an extremely complex task
especially in a changing epidemiological, institutional,
technological, and political scenario.
Further, given the institutional complexity of our health sector
programmes and the pluralistic
character of health care providers, health sector reform
strategies in the context of health
insurance that have evolved elsewhere may have very little
suitability to our country situation.
Proper understanding of the Indian health situation and
application of the principles of insurance
keeping in view the social realities and national objective are
important.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 11
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 12
2.1 HISTORY OF INSURANCE IN INDIA
In India, insurance has a deep-rooted history. It finds mention
in the writings of Manu (
Manusmrithi ), Yagnavalkya ( Dharmasastra ) and Kautilya (
Arthasastra ). The writings talk in
terms of pooling of resources that could be re-distributed in
times of calamities such as fire,
floods, epidemics and famine. This was probably a pre-cursor to
modern day insurance. Ancient
Indian history has preserved the earliest traces of insurance in
the form of marine trade loans and
carriers contracts. Insurance in India has evolved over time
heavily drawing from other
countries, England in particular.
1818 saw the advent of life insurance business in India with the
establishment of the Oriental
Life Insurance Company in Calcutta. This Company however failed
in 1834. In 1829, the
Madras Equitable had begun transacting life insurance business
in the Madras Presidency. 1870
saw the enactment of the British Insurance Act and in the last
three decades of the nineteenth
century, the Bombay Mutual (1871), Oriental (1874) and Empire of
India (1897) were started in
the Bombay Residency. This era, however, was dominated by
foreign insurance offices which
did good business in India, namely Albert Life Assurance, Royal
Insurance, Liverpool and
London Globe Insurance and the Indian offices were up for hard
competition from the foreign
companies.
In 1914, the Government of India started publishing returns of
Insurance Companies in India.
The Indian Life Assurance Companies Act, 1912 was the first
statutory measure to regulate life
business. In 1928, the Indian Insurance Companies Act was
enacted to enable the Government to
collect statistical information about both life and non-life
business transacted in India by Indian
and foreign insurers including provident insurance societies. In
1938, with a view to protecting
the interest of the Insurance public, the earlier legislation
was consolidated and amended by the
Insurance Act, 1938 with comprehensive provisions for effective
control over the activities of
insurers.
The Insurance Amendment Act of 1950 abolished Principal
Agencies. However, there were a
large number of insurance companies and the level of competition
was high. There were also
allegations of unfair trade practices. The Government of India,
therefore, decided to nationalize
insurance business.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 13
An Ordinance was issued on 19th January, 1956 nationalising the
Life Insurance sector and Life
Insurance Corporation came into existence in the same year. The
LIC absorbed 154 Indian, 16
non-Indian insurers as also 75 provident societies245 Indian and
foreign insurers in all. The
LIC had monopoly till the late 90s when the Insurance sector was
reopened to the private sector.
The history of general insurance dates back to the Industrial
Revolution in the west and the
consequent growth of sea-faring trade and commerce in the 17th
century. It came to India as a
legacy of British occupation. General Insurance in India has its
roots in the establishment of
Triton Insurance Company Ltd., in the year 1850 in Calcutta by
the British. In 1907, the Indian
Mercantile Insurance Ltd, was set up. This was the first company
to transact all classes of
general insurance business.
1957 saw the formation of the General Insurance Council, a wing
of the Insurance Associaton of
India. The General Insurance Council framed a code of conduct
for ensuring fair conduct and
sound business practices.
In 1968, the Insurance Act was amended to regulate investments
and set minimum solvency
margins. The Tariff Advisory Committee was also set up then.
In 1972 with the passing of the General Insurance Business
(Nationalisation) Act, general
insurance business was nationalized with effect from 1st
January, 1973. 107 insurers were
amalgamated and grouped into four companies, namely National
Insurance Company Ltd., the
New India Assurance Company Ltd., the Oriental Insurance Company
Ltd and the United India
Insurance Company Ltd. The General Insurance Corporation of
India was incorporated as a
company in 1971 and it commence business on January 1sst
1973.
This millennium has seen insurance come a full circle in a
journey extending to nearly 200 years.
The process of re-opening of the sector had begun in the early
1990s and the last decade and
more has seen it been opened up substantially. In 1993, the
Government set up a committee
under the chairmanship of RN Malhotra, former Governor of RBI,
to propose recommendations
for reforms in the insurance sector.The objective was to
complement the reforms initiated in the
financial sector. The committee submitted its report in 1994
wherein , among other things, it
recommended that the private sector be permitted to enter the
insurance industry. They stated
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 14
that foreign companies be allowed to enter by floating Indian
companies, preferably a joint
venture with Indian partners.
Following the recommendations of the Malhotra Committee report,
in 1999, the Insurance
Regulatory and Development Authority (IRDA) was constituted as
an autonomous body to
regulate and develop the insurance industry. The IRDA was
incorporated as a statutory body in
April, 2000. The key objectives of the IRDA include promotion of
competition so as to enhance
customer satisfaction through increased consumer choice and
lower premiums, while ensuring
the financial security of the insurance market.
The IRDA opened up the market in August 2000 with the invitation
for application for
registrations. Foreign companies were allowed ownership of up to
26%. The Authority has the
power to frame regulations under Section 114A of the Insurance
Act, 1938 and has from 2000
onwards framed various regulations ranging from registration of
companies for carrying on
insurance business to protection of policyholders interests.
In December, 2000, the subsidiaries of the General Insurance
Corporation of India were
restructured as independent companies and at the same time GIC
was converted into a national
re-insurer. Parliament passed a bill de-linking the four
subsidiaries from GIC in July, 2002.
Today there are 14 general insurance companies including the
ECGC and Agriculture Insurance
Corporation of India and 14 life insurance companies operating
in the country.
The insurance sector is a colossal one and is growing at a
speedy rate of 15-20%. Together with
banking services, insurance services add about 7% to the
countrys GDP. A well-developed and
evolved insurance sector is a boon for economic development as
it provides long- term funds for
infrastructure development at the same time strengthening the
risk taking ability of the country.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 15
2.2 MILESTONES IN INDIAN LIFE INSURANCE BUSINESS
1912: The Indian Life Assurance Companies Act came into force
for regulating the life
insurance business.
1928: The Indian Insurance Companies Act was enacted for
enabling the government to
collect statistical information on both life and non-life
insurance businesses.
1938: The earlier legislation consolidated the Insurance Act
with the aim of safeguarding
the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies
were taken over by the
central government and they got nationalized. LIC was formed by
an Act of Parliament,
viz. LIC Act, 1956. It started off with a capital of Rs. 5 crore
and that too from the
Government of India.
The history of general insurance business in India can be traced
back to Triton Insurance
Company Ltd. (the first general insurance company) which was
formed in the year 1850 in
Kolkata by the British.
2.3 IMPORTANT MILESTONES IN THE INDIAN INSURANCE
BUSINESS
1907: The Indian Mercantile Insurance Ltd. was set up which was
the first company of its
type to transact all general insurance business.
1957: General Insurance Council, an arm of the Insurance
Association of India, framed a
code of conduct for guaranteeing fair conduct and sound business
patterns.
1968: The Insurance Act improved for regulating investments and
set minimal solvency
levels and the Tariff Advisory Committee was set up.
1972: The General Insurance Business (Nationalization) Act, 1972
nationalized the
general insurance business in India. It was with effect from 1st
January 1973.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 16
107 insurers integrated and grouped into four companies viz. the
National Insurance Company
Ltd., the New India Assurance Company Ltd., the Oriental
Insurance Company Ltd. and the
United India Insurance Company Ltd. GIC was incorporated as a
company.
Economic policy context and imperatives of liberalization of
insurance sector:
There are several imperatives for opening of the insurance and
health insurance sector in India
for private investment. Here we review some of these
imperatives. Economic policy reforms
started during late eighties and speeded up in nineties are the
context in which liberalization of
insurance sector happened in India. It was very obvious that the
liberalization of the real
(productive) and financial sector of the economy has to go hand
in hand. It is imperative that
these sectors are consistent with policies of each other and
unless both function efficiently and
are in equilibrium, it would be difficult to ensure appropriate
economic growth. Given these facts
liberalization of both sectors has to proceed
simultaneously.Indian economic system has been
developed on paradigm of mixed economy in which public and
private enterprises co-exist. The
past strategies of development based on socialistic thinking
were focusing on the premise of
restrictions, regulations and control and less on incentives and
market driven forces. This
affected the development process in the country in serious way.
After the economic liberalization
the paradigm changed from central planning, command and control
to market driven
development. Deregulation, decontrol, privatization,
delicensing, globalization became the key
strategies to implement the new framework and encourage
competition. The
social sectors did not remain unaffected by this change. The
control of government expenditure,
which became a key tool to manage fiscal deficits in early
1990s, affected the social sector
spending in major way. The unintended consequences of
controlling the fiscal deficits have been
reduction in capital expenditure and non-salary component of
many social sector
programmes.This has led to severe resource constraints in the
health sector in respect of non-
salary expenditure and this has affected the capacity and
credibility of the government health
care system to deliver good quality care over the years. Given
the increasing salaries, lack of
effective monitoring and lack of incentives to provide good
quality services the provides in the
government sector became indifferent to the clients. Clients
also did not demand good quality
and better access, as government services were free of cost.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 17
Under this situation more and more clients turned to the private
sector health providers and thus
the private sector healthcare has expanded. Given the
socialistic political thinking and populist
policy it has been generally difficult for any government to
introduce cost recovery in public
health sector. Given that government is unable to provide more
resources for health care, and
institute cost recovery, one of the ways to reduce the
under-funding and augment the resources in
the health sector was to encourage the development health
insurance.
Another imperative for liberalization of the insurance sector
was the need for long-term financial
resources on sustainable basis for the development of
infrastructure sector such as roads,
transports etc. It was realized that during the course of
economic liberalization, the funds to
development the infrastructure also became a major constraint.
Country certainly needed
infrastructure development. For this the finances are major
constraint. In these investments the
benefits are more social than private. The major concern was how
these finances can be made
available at low costs. In past the development of social sector
were financed using government
channeled funds through various semi-government financial
institutions. Under the liberalized
economy this may not be possible. One hope is that if the
insurance sector develops rapidly
under privatization then it can provide long-term finance to the
infrastructure sector.
The financial sector, which consists of banks, financial
institutions, insurance companies,
Provident funds schemes, mutual funds were all under government
control. There was less
competition across these units. As a result these institutions
remained significantly less
developed in their approach and management. Insurance sector has
been most affected by the
government controls. Government had significant control on the
policies these insurance
companies could offer and utilization of the resources mobilized
by insurance companies. One
can see that most of the insurance products (e.g., life
insurance products) were promoted as
mechanisms to improve the savings and tax shelters rather as
risk coverage instruments. Other
segments of the insurance products grew because of the statutory
obligations (e.g., Motor
Vehicle, Marine and Fire) under various acts. The management and
organization of insurance
sector companies remained less developed and they neglected new
product development and
marketing. Thus one of the hopes in opening of the insurance
sector was that the private and
foreign companies would rapidly develop the sector and improve
coverage of the population
with insurance using new products and better management.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 18
Last imperative for opening of the insurance sector was signing
the WTO India. After this there
was little choice but to open the entire financial sector -
including insurance sector to private and
foreign investors. (Dholakia 1999).
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 19
2.4 LIST OF INSURANCE COMPANIES IN INDIA:-
LIFE INSURERS Websites
Public Sector
Life Insurance Corporation of India www.licindia.com
Private Sector
Allianz Bajaj Life Insurance Company Limited
www.allianzbajaj.co.in
Birla Sun-Life Insurance Company Limited
www.birlasunlife.com
HDFC Standard Life Insurance Co. Limited
www.hdfcinsurance.com
ICICI Prudential Life Insurance Co. Limited
www.iciciprulife.com
ING Vysya Life Insurance Company Limited
www.ingvysayalife.com
Max New York Life Insurance Co. Limited
www.maxnewyorklife.co
m
MetLife Insurance Company Limited www.metlife.com
Om Kotak Mahindra Life Insurance Co. Ltd.
www.omkotakmahnidra.
com
SBI Life Insurance Company Limited www.sbilife.co.in
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 20
TATA AIG Life Insurance Company Limited www.tata-aig.com
AMP Sanmar Assurance Company Limited www.ampsanmar.com
Dabur CGU Life Insurance Co. Pvt. Limited www.avivaindia.com
GENERAL INSURERS
Public Sector
National Insurance Company Limited www.nationalinsurancein
dia.com
New India Assurance Company Limited www.niacl.com
Oriental Insurance Company Limited www.orientalinsurance.n
ic.in
United India Insurance Company Limited www.uiic.co.in
Private Sector
Bajaj Allianz General Insurance Co. Limited
www.bajajallianz.co.in
ICICI Lombard General Insurance Co. Ltd.
www.icicilombard.com
IFFCO-Tokio General Insurance Co. Ltd. www.itgi.co.in
Reliance General Insurance Co. Limited www.ril.com
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 21
Royal Sundaram Alliance Insurance Co. Ltd. www.royalsun.com
TATA AIG General Insurance Co. Limited www.tata-aig.com
Cholamandalam General Insurance Co. Ltd.
www.cholainsurance.com
Export Credit Guarantee Corporation www.ecgcindia.com
HDFC Chubb General Insurance Co. Ltd.
REINSURER
General Insurance Corporation of India www.gicindia.com
2.5 CONCEPT AND FUNCTIONS OF INSURANCE:-
Insured, are you? The functions of Insurance will give you an
idea on how to go ahead with the
approach of insurance and what type of insurance to choose. In a
layman's words, insurance
means, a guard against pecuniary loss arising on the happening
of an unforeseen event. In
developing economies, the insurance sector still holds a lot of
potential which can be tapped.
Majority of the people in the developing countries remains
unaware of the functions and benefits
of insurance and it is for this reason that the insurance sector
is still to grow.
Tangible or intangible an individual can insure anything! Be it
a house, car, factory, or the
voice of a singer, leg of a footballer, and the hand of an
author.....etc. It is possible to insure all
these as they have the possibility of becoming non functional by
any disaster or an accident.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 22
2.6 BASIC FUNCTIONS OF INSURANCE:-
1. Primary Functions
2. Secondary Functions
3. Other Functions
Primary functions of insurance
Providing protection The elementary purpose of insurance is to
allow security against
future risk, accidents and uncertainty. Insurance cannot arrest
the risk from taking place,
but can for sure allow for the losses arising with the risk.
Insurance is in reality a
protective cover against economic loss, by apportioning the risk
with others.
Collective risk bearing Insurance is an instrument to share the
financial loss. It is a
medium through which few losses are divided among larger number
of people. All the
insured add the premiums towards a fund and out of which the
persons facing a specific
risk is paid.
Evaluating risk Insurance fixes the likely volume of risk by
assessing diverse factors
that give rise to risk. Risk is the basis for ascertaining the
premium rate as well.
Provide Certainty Insurance is a device, which assists in
changing uncertainty to
certainty.
Secondary functions of insurance
Preventing losses Insurance warns individuals and businessmen to
embrace
appropriate device to prevent unfortunate aftermaths of risk by
observing safety
instructions; installation of automatic sparkler or alarm
systems, etc.
Covering larger risks with small capital Insurance assuages the
businessmen from
security investments. This is done by paying small amount of
premium against larger
risks and dubiety.
Helps in the development of larger industries Insurance provides
an opportunity to
develop to those larger industries which have more risks in
their setting up.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 23
Other functions of insurance
Is a savings and investment tool Insurance is the best savings
and investment option,
restricting unnecessary expenses by the insured. Also to take
the benefit of income tax
exemptions, people take up insurance as a good investment
option.
Medium of earning foreign exchange Being an international
business, any country
can earn foreign exchange by way of issue of marine insurance
policies and a different
other ways.
Risk Free trade Insurance boosts exports insurance, making
foreign trade risk free
with the help of different types of policies under marine
insurance cover.
Insurance provides indemnity, or reimbursement, in the event of
an unanticipated loss or disaster.
There are different types of insurance policies under the sun
cover almost anything that one
might think of. There are loads of companies who are providing
such customized insurance
policies.
2.7 CHALLENGES FACING INSURANCE INDUSTRY:
Threat of New Entrants: The insurance industry has been budding
with new entrants
every other day. Therefore the companies should carve out niche
areas such that the
threat of new entrants might not be a hindrance. There is also a
chance that the big
players might squeeze the small new entrants.
Power of Suppliers: Those who are supplying the capital are not
that big a threat. For
instance, if someone as a very talented insurance underwriter is
presently working for a
small insurance company, there exists a chance that any big
player willing to enter the
insurance industry might entice that person off.
Power of Buyers: No individual is a big threat to the insurance
industry and big
corporate houses have a lot more negotiating capability with the
insurance companies.
Big corporate clients like airlines and pharmaceutical companies
pay millions of dollars
every year in premiums.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 24
Availability of Substitutes: There exist a lot of substitutes in
the insurance industry.
Majorly, the large insurance companies provide similar kinds of
services be it auto,
home, commercial, health or life insurance.
How to choose an insurance company?
There are many factors to probe into when an investor chose an
insurance company.
The consumers as well as the investors should only focus on the
insurer's financial
strength and capability to meet ongoing responsibilities to its
policyholders.
The fundamentals of the insurance company should be strong and
should not indicate a
poor investment opportunity as this might also deter growth.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 25
2.8 TOP INSURANCE COMPANIES IN INDIA:-
LifeInsuranceCorporationofIndia-
The Life Insurance Corporation of India (LIC) is undoubtedly
India's largest life insurance
company. Fully owned by government, LIC is also the largest
investor of the country. LIC has an
estimated asset of Rs. 8 Trillion. It also funds almost 24.6% of
the expenses of Government of
India.
Established in 1956 and headquartered in Mumbai, Life Insurance
Corporation of India has 8
zonal offices, 100 divisional offices, 2,048 branch offices and
a vast network of 10,02,149 agents
spread across the country.
TataAIGInsuranceSolutions-
Tata AIG Insurance Solutions, one of the leading insurance
providers in India, started its
operation on April 1, 2001. A joint venture between Tata Group
(74% stake) and American
International Group, Inc. (AIG) (26% stake), Tata AIG Insurance
Solutions has two different
units for life insurance and general insurance. The life
insurance unit is known as Tata AIG Life
Insurance Company Limited, whereas the general insurance unit is
known as Tata AIG General
Insurance Company Limited.
AVIVALifeInsurance-
AVIVA Life Insurance, one of the popular insurance companies in
India, is a joint venture
between the renowned business group, Dabur and the largest
insurance group in the UK, Aviva
plc. AVIVA Life Insurance has an extensive network of 208
branches and about 40
Bancassurance partnerships, spread across 3,000 cities and towns
across the country. There are
more than 30,000 Financial Planning Advisers (FPAs) working for
AVIAV Life Insurance. It
offers various plans like Child, Retirement, Health, Savings,
Protection and Rural.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 26
MetLifeInsurance-
MetLife India Insurance Company Limited is another popular
player in Indian insurance sector.
A joint venture between the Jammu and Kashmir Bank, M. Pallonji
and Co. Private Limited and
other private investors and MetLife International Holdings,
Inc., MetLife Insurance offers a wide
range of financial solutions to its customers including Met
Suraksha, Met Suraksha TROP, Met
Mortgage Protector and Met Suraksha Plus etc. It has its
branches situated over 600 locations
across the country. More than 50,000 Financial Advisors work for
MetLife.
INGVysyaLifeInsurance-
ING Vysya Life Insurance entered into the Indian insurance
industry in September 2001. A joint
venture between ING Group, Ambuja Cements, Exide Industries and
Enam Group, ING Vysya
Life Insurance uses its two channels, viz. the Alternate Channel
and the Tied Agency Force to
distribute its products. The first channel has branches in 234
cities across the country and has got
366 sales teams. On the other hand, the later one has more than
60,000 advisors. Currently, ING
Vysya Life Insurance has tie ups with more than 200 cooperative
banks.
BirlaSunLifeFinancialServices-
Birla Sun Life Financial Services is a joint venture between
Aditya Birla Group and Sun Life
Financial Inc, Canada. It has got an extensive network of more
than 600 branches. More than
1,75,000 empanelled advisors work for Birla Sun Life, which
currently covers over 2 million
lives.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 27
MAXNewYorkLife-
Max New York Life Insurance Company Ltd. is one of the top
insurance companies in India. A
joint venture between Max India Limited and New York Life
International (a part of the Fortune
100 company - New York Life), Max New York Life Insurance
Company Ltd. started its
operation in April 2001. It currently has around 715 offices
located in 389 cities across the
country. It also has around 75,832 agent advisors. Max New York
Life offers 39 products, which
cover both, life and health insurance.
BajajAllianz-
Bajaj Allianz is a joint venture between Bajaj Finserv Limited
and Allianz SE, where Bajaj
Finserv Limited holds 74% of the stake, whereas Allianz SE holds
the rest 26% stake. Bajaj
Allianz has been rated iAAA by ICRA for its ability to pay
claims. The company also achieved a
growth of 11% with a premium income of Rs. 2866 crore as on
March 31, 2009.
BhartiAXALifeInsurance-
Bharti AXA Life Insurance, one of the top insurance companies in
India, is a joint venture
between Bharti group and world leader AXA. Bharti holds 74%
stakes, whereas AXA holds the
rest of 26%. Bharti AXA has its branches located in 12 states
across the country. It offers a range
of individual, group and health plans for its customers.
Currently more than 8000 employees
work for Bharti AXA Life Insurance.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 28
Objective
The main objective of the research is to know the customer
perception toward health
insurance and there need and the see the insurance company has
completed there
satisfaction level and the customer are willing to continue the
policy for a long period of
time
Another objective that survey will make the fix target that all
the age limit and the make
the awareness to all the age criteria that how health policy is
important and in the that
which criteria of age and occupation and income are preferring
more policy and from
number of policy holder how many are satisfied by the company
and going to contuse the
policy after ending the current policy holding
Limitations
The study is confined to limited period.
Accuracy of the study is purely based on the Primary and
secondary data.
The analysis and conclusion made by me as per my limited
understanding and there may
be something variation in the actual situation.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 29
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 30
Health insurance is a mechanism by which a person protects
himself from financial loss caused
due to accident and or disability. Though disability is not
fixed, precise and immutable state
affected as it is by numerous influences, both objective and
subjective, its significance to society
is that condition of ill health arising from disease or injury
that prevents the individual from
pursuing his normal routine of living. The universality of the
hazard of disability is everywhere
recognized; just as uncertainty is one of the fundamental facts
of life (Knight 1921).
It is may be because of this reason why the earlier society
looked into health insurance as a
mechanism to reduce the uncertainty attached to disability. In
no line of human endeavor does
the interdependence of men manifest itself more clearly than in
insurance. Although the
insurance principle is centuries old, planned achievement of
security through transfer or sharing
of risk has developed only with modern society. When man lived
alone or in primitive family
groups, insurance in a formal sense was unnecessary. Each family
cared for its own as best it
could. When community living became more complex, men recognized
the need for a system by
which they could help each other in times of adversity. From
this need to have the assurance of
help in the event of misfortune grew the earliest insurance
plans (Kelly 1951).
The possible way to fund the financial loss due to ill health
could be either through out of pocket
payment, by paying premium to the insurance company or by
contribution from the state or
central government. The natural solution is to insure against
the possibility of medical illness by
poling risk with others in population. In the case of insurance,
the benefit is that the annual
consumption of the family would be reduced only by the premium,
the average cost of care. By
paying a fixed amount each term consumers will be able to
protect themselves from large
medical cost in future. This argument for instance is based on
the expected utility theory and
the premise that people generally prefer certainty to risk
(Neumann and Morgenstern 1944).
According to this theory, if consumers are sufficiently averse
to financial risk, firms selling
insurance can charge premium that cover the expected coverage
losses plus a loading fee, and
still sell insurance.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 31
The top ten percent of users account for nearly three quarters
of total medical spending (Berk and
Monheit 2001). Therefore, in such a situation, health insurance
is one important method which
helps significantly to spread the risk.
it is one of the significant drivers of improvement in the
healthcare provision by encouraging
investment and innovation. This mechanism also helps in
improving the quality and efficiency of
public health care system by continually benchmarking it (Ahuja
2005).
Wang et al. (2006) examined adverse selection in a subsidized
voluntary health insurance
scheme, the Rural Mutual Health Care (RMHC) scheme, in a poor
rural area of China. The study
was made possible by a unique longitudinal data set: the total
sample includes 3492 rural
residents from 1020 households. Logistic regression was employed
for the data analysis. The
results show that although the subsidized scheme achieved a
considerable high enrollment rate of
71 percent of rural residents, adverse selection still existed.
In general, individuals with worse
health status are more likely to enroll in RMHC than individuals
with better health status.
Most Americans purchase health insurance through employers,
although the percentage of
employee-sponsored coverage declined from 69% to 60% between
1999 and 2010 (Fewer
employees getting health insurance at work, 2013). Nearly 84% of
the 49 million uninsured
come from families with at least one worker; 62% include at
least one full-time worker
(American Public Health Association, 2012; Kaiser Family
Foundation, 2012a)
.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 32
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 33
4.1 HEALTH INSURANCE IN INDIA: CURRENT SCENARIO
Introduction
The health care system in India is characterised by multiple
systems of medicine, mixed
ownership patterns and different kinds of delivery structures.
Public sector ownership is divided
between central and state governments, municipal and Panchayat
local governments. Public
health facilities include teaching hospitals, secondary level
hospitals, first-level referral hospitals
(CHCs or rural hospitals), dispensaries; primary health centres
(PHCs), sub-centres, and health
posts. Also included are public facilities for selected
occupational groups like organized work
force (ESI), defence, government employees (CGHS), railways,
post and telegraph and mines
among others. The private
sector (for profit and not for profit) is the dominant sector
with 50 per cent of people seeking
indoor care and around 60 to 70 per cent of those seeking
ambulatory care (or outpatient care)
from private health facilities. While India has made significant
gains in terms of health indicators
- demographic, infrastructural and epidemiological (See Tables 1
and 2), it continues to grapple
with newer challenges. Not only have communicable diseases
persisted over time but some of
them like malaria have also developed insecticide-resistant
vectors while others like tuberculosis
are becoming increasingly drug resistant. HIV / AIDS has of late
assumed extremely virulent
proportions. The 1990s have also seen an increase in mortality
on account of non-communicable
diseases arising as a result of lifestyle changes. The country
is now in the midst of a dual disease
burden of communicable and noncommunicable diseases. This is
coupled with spiraling health
costs, high financial burden on the poor and erosion in their
incomes. Around 24% of all people
hospitalized in India in a single year fall below the poverty
line due to
Hospitalization (World Bank, 2002). An analysis of financing of
hospitalization shows that large
proportion of people; especially those in the bottom four-income
quintiles borrow money or sell
assets to pay for hospitalization (World Bank, 2002)
This situation exists in a scenario where health care is
financed through general tax revenue,
community financing, out of pocket payment and social and
private health insurance schemes.
India spends about 4.9% of GDP on health (WHR, 2002). The per
capita total expenditure on
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 34
health in India is US$ 23, of which the per capita Government
expenditure on health is US$ 4.
Hence, it is seen that the total health expenditure is around 5%
of GDP, with breakdown of
public expenditure (0.9%); private expenditure (4.0%). The
private expenditure can be further
classified as out-of-pocket (OOP) expenditure (3.6%) and
employees/community financing
(0.4%). It is thus
evident that public health investment has been comparatively
low. In fact as a percentage of GDP
it has declined from 1.3% in 1990 to 0.9% as at present.
Furthermore, the central budgetary
allocation for health (as a percentage of the total Central
budget) has been stagnant at 1.3% while
in the states it has declined from 7.0% to 5.5%.
Table 1. Socioeconomic indicators
Land area
2% of world area
Burden of disease (%)
21% of global disease burden
Population
16% of world population
Urban : Rural 28:72
Literacy rate (%)
65.38
Sanitation (%)
Rural 9.0; Urban 49.3
Safe drinking water supply
(%)
Rural 98; Urban 90.2
Poverty (%)
Below poverty line 26
Rural 27.09; Urban 23.62
Poverty line (Rs.)
Rural 327.56; Urban 454.11
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 35
4.2 Health sector and its financing: present scene and issues
for the future:-
During the last 50 years India has developed a large government
health infrastructure with more
than 150 medical colleges, 450 district hospitals, 3000
Community Health Centers, 20,000
Primary Health Care centers and 130,000 Sub-Health Centers. On
top of this there are large
number of private and NGO health facilities and practitioners
scatters though out the country.
Over the past 50 ears India has made considerable progress in
improving its health status. Death
rate has reduced from 40 to 9 per thousand, infant mortality
rate reduced from 161 to 71 per
thousand live births and life expectancy increased from 31 to 63
years.
However, many challenges remain and these are: life expectancy 4
years below world average,
high incidence of communicable diseases, increasing incidence of
non- communicable diseases,
neglect of women's health, considerable regional variation and
threat from environment
degradation. It is estimated that at any given point of time 40
to 50 million people are on
medication for major sickness in India. About 200 million
workdays are lost annually due to
sickness. Survey data indicate that about 60% people use private
health providers for outpatient
treatment while 60 % use government providers for in-door
treatment. The average expenditure
for care is 2-5 times more in private sector than in public
sector.
India spends about 6% of GDP on health expenditure. Private
health care expenditure is 75% or
4.25% of GDP and most of the rest (1.75%) is government funding.
At present, the insurance
coverage is negligible. Most of the public funding is for
preventive, promotive and primary care
programmers while private expenditure is largely for curative
care. Over the period the private
health care expenditure has grown at the rate of 12.84% per
annum and for each one percent
increase in per capital income the private health care
expenditure has increased by 1.47%.
Number of private doctors and private clinical facilities are
also expanding exponentially. Indian
health financing scene raises number of challenges, which are:
increasing health care costs, high
financial burden on poor eroding their incomes, increasing
burden of new diseases and health
risks and neglect of preventive and primary care and public
health functions due to underfunding
of the government health care. Given the above scenario
exploring health-financing options
becomes critical. Health Insurance is considered one of the
financing mechanisms to over come
some of the problems of our system.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 36
4.3 Consumer and social perspective on health insurance:-
With the liberalization of insurance and entry of private
companies in this business it is very
important that specific interventions are developed which focus
on increasing the consumer
awareness about insurance products. One of the major challenges
after privatization of insurance
would be how to develop such mechanisms, which help making
consumers aware about the
various intricacies of insurance plans. As of now information,
knowledge and awareness of
existing insurance plans is very limited. This is also shown by
the study of Gumber and Kulkarni
(2000) among the members of SEWA, ESIS and mediclaim schemes.
With Consumer Protection
Act coming in force it has become easy for aggrieved consumers
to complain and seek redressal
for their problems. Consumer organizations such as CERC of
Ahmedabad have been helping
consumers to get due justice in disputes with the insurance
companies. Their experience would
be varying valuable in guiding development of health insurance
plans that are transparent and
just.
Many a times the insurance claims are rejected due to some small
technical reasons. This leads to
disputes. Most of the time the conditions and various points
included in insurance policy
contracts is not negotiable and these are binding on consumers.
There is no analysis on what is
fair practice and what is unfair practice. Given that insurance
companies are large and almost
monopoly setting the consumers is treated as secondary and they
do not have opportunity to
negotiate the terms and conditions of a contract. Many times
insurance companies do not strictly
follow the conditions in all cases and this create confusion and
disputes. (Shah M 1999)
The most important area of dispute and unfair treatment is the
knowledge and implications of
pre-exiting conditions. A number of cases of litigation are
disagreement on these pre-existing
conditions. These problems also arise because of lack of
specification of number of areas and
properly spelling out the conditions. This is also because some
chronic conditions such as high
blood pressure and diabetes can increase the risk of may other
disease of organs such as heart,
kidney, vascular and eyes diseases. The patients with these
pre-existing conditions are denied
claims for treatment of complications. This is not fair and
leads to disputes.
Health insurance is typically annual and has to be renewed
yearly. Policy, which is not renewed
in time lapses and a new policy has to be taken out. Medical
conditions detected during the
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 37
interim period are treated as pre-existing condition for the new
policy, which is not fair. This is
seen as major issue as it changes the conditionalities about
what constitutes pre- exiting
conditions. Courts, however, have ruled that even if there is
delay in renewing the policies it
should be considered as renewed policy. In case two doctors give
different reports one favouring
consumer and other insurance company, the insurance company
generally follows the later
opinion. There are several such consumer-related issues, which
need to be addressed in health
insurance.
One of the planks on which the insurance has been deregulated is
the gain in efficiency and
passing on these benefits to the consumers. It is very
unrealistic to assume that insurance
companies will be able to gain efficiency, which helps them to
reduce the price of schemes. At
least one should not be expecting this thing happening in the
short-run. But providing full
information to the consumer and dealing with claims in a just
and expeditious manner is the
minimum expected outcome of the deregulation process. Consumer
organizations have to play
very active role in future development of the health insurance
sector in India.
There are several social issues such as exclusions of sexually
transmitted diseases, AIDS,
delivery and maternal conditions etc. These are not socially and
ethically acceptable. "Insurance
companies much take care of all the risks related to health. The
companies may charge additional
premium for certain conditions. Secondly the present mediclaim
policy premiums are high and
do not differentiate between people living in urban and rural
areas where the costs of medical
care are different. Thus the present policy is less attractive
to poor and rural people. The tax
subsidy provided to the mediclaim is also going largely to the
rich who are the taxpayers.
The newer health insurance policies have to improve upon the
shortcoming of the existing
policies.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 38
4.4 Impact of Health insurance on structure and quality of
private provision:-
The experiences in liberalizing the private health insurance
suggest that it has undesirable effects
on the costs of health care. The costs of care generally go up.
Given the present system of fee for
service and current scenario of health infrastructure in private
sector, the development of
insurance will need improvements in quality and change in
structure. The new investments to
improve quality will result into high cost and therefore
increase in prices of insurance products.
There would be developments in the direction of exploring
options of managed care, which
would help in reducing the costs. The developments would be
needed in the direction of strong
information base and accreditation system for providers. The
structure of the health sector will
have to change from multiple-single doctor hospitals and clinics
to larger hospitals and
polyclinics, which provide services of multiple specialities and
can operate at larger scale. This
will allow them to provide high quality professional care at
competitive prices. As one of the
responses to these issues Third Party Administrators (TPA) are
rapidly emerging in India. Here
we can learn from the models, which have emerged elsewhere. But
their applicability to Indian
situation needs to be examined carefully. These aspects of the
health sector will need detailed
study.
We lack adequate information base to operate insurance schemes
at large scale. The insurance
mechanism prevalent in many developed countries has their
history. Health reforms experiences
in many countries are replete with the suggestion that the
systems cannot be replicated easily.
Self-regulation is an important in any market driven system. The
regulation from outside does
not work. Implementation of regulation in this sector is
difficult. We significantly lack
mechanisms and institutions, which would ensure self- regulation
and continuing education of
provides and various stakeholders. The accreditation systems are
hard to implement without
mechanisms to self-regulate. For example it took 35 years in US
to put the accreditation system
effectively in place. For example, it has been difficult for
many States in India to put nursing
homes legislation in place. Given the deterioration on standards
in medical education, lack of
regulation by medical council and rising expectations of the
community it is difficulty to ensure
quality standards in Indian health care system. Given this
situation health insurance systems will
have to deal with this complex issue of quality of care in years
to come.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 39
4.5 Role of regulators:-
The government has established Insurance Regulatory and
Development Authority (IRDA)
which is the statutory body for regulation of the whole
insurance industry. They would be
granting licenses to private companies and will regulate the
insurance business. As the health
insurance is in its very early phase, the role of IRDA will be
very crucial. They have to ensure
that the sector develops rapidly and the benefit of the
insurance goes to the consumers. But it has
to guard against the ill effects of private insurance. The main
danger in the health insurance
business we see is that the private companies will cover the
risk of middle class who can afford
to pay high premiums. Unregulated reimbursement of medical costs
by the insurance companies
will push up the prices of private care. So large section of
India's population who are not insured
will be at a relative disadvantage as they will, in future, have
to pay much more for the private
care. Thus checking increase in the costs of medical care will
be very important role of the
IRDA.
Secondly, IRDA will need to evolve mechanisms by which it puts
some kind of statue in place
that private insurance companies do not skim the market by
focusing on rich and upper- class
clients and in the process neglect a major section of India's
population. They must ensure that
companies develop products for such poorer segments of the
community and possibly build an
element of cross-subsidy for them. Government companies can take
the lead in this matter and
catalyze new products for the poor and lower middle class as
they have done in the past.
Thirdly the regulators should also encourage NGOs, Co-operatives
and other collectives to inter
into the health insurance business and develop products for the
poor as well as for the middle
class employed in the services sector such as education,
transportation, retailing etc and the self
employed. This could be run as no-profit-no loss basis similar
to the scheme pioneered by Indian
Medical Association for its members. Special licenses will have
to be given to NGO for this
purpose without insisting on the minimum capital norms, which
are for commercial insurance
companies.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 40
4.6 VARIOUS HEALTH INSURANCE PRODUCTS AVAILABLE IN INDIA
The existing health insurance schemes available in India can be
broadly categorized as:
Voluntary health insurance schemes or private-for-profit schemes
Mandatory health insurance schemes or
government run schemes (namely ESIS, CGHS) Insurance offered by
NGOs/Community based health
insurance Employer based schemes
1. Voluntary health insurance schemes or private-for-profit
schemes:
In private insurance, buyers are willing to pay premium to an
insurance company that pools similar risks
and insures them for health related expenses. The main
distinction is that the premiums are set at a level,
which are based on assessment of risk status of the consumer (or
of the group of employees) and the level
of benefits provided, rather than as a proportion of consumers
income.
In the public sector, the General Insurance Corporation (GIC)
and its four subsidiary companies (National
Insurance Corporation, New India Assurance Company, Oriental
Insurance Company and United
Insurance Company) provide voluntary insurance schemes.
The most popular health insurance cover offered by GIC is
Mediclaim policy
Mediclaim policy: - It was introduced in 1986. It reimburses the
hospitalization expenses
owing to illness or injury suffered by the insured, whether the
hospitalization is domiciliary or otherwise.
It does not cover outpatient treatments. Government has exempted
the premium paid by individuals from
their taxable income.
Because of high premiums it has remained limited to middle
class, urban tax payer segment of population.
Some of the various other voluntary health insurance schemes
available in the market are :- Asha deep
plan II , Jeevan Asha plan II, Jan Arogya policy, Raja Rajeswari
policy, Overseas Mediclaim policy,
Cancer Insurance policy, Bhavishya Arogya policy, Dreaded
disease policy, Health Guard, Critical illness
policy, Group Health insurance policy, Shakti Shield etc. At
present Health insurance is provided mainly
in the form of riders. There are very few pure health insurance
policies under voluntary health insurance
schemes.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 41
2. Mandatory health insurance schemes or government run schemes
(namely
ESIS,CGHS)
Employer State Insurance Scheme (ESI):- Enacted in 1948, the
employers state insurance (ESI)
Act was the first major legislation on social security in India.
The scheme applies to power using factories
employing 10 persons or more and non-power & other specified
establishments employing 20 persons or
more. It covers employees and the dependents against loss of
wages due to sickness, maternity, disability
and death due to employment injury. It also covers funeral
expenses and rehabilitation allowance.
Medical care comprises outpatient care, hospitalization,
medicines and specialist care. These services are
provided through network of ESIS facilities, public care
centers, non-governmental organizations (NGOs)
and empanelled private practitioners. The ESIS is financed by
three way contributions from employers,
employees and the state government.
Even though the scheme is formulated well there are problem
areas in managing this scheme. Some of the
problems are :-
Large numbers of posts of medical staff remain vacant due to
high turnover and low remuneration
compared to corporate hospitals.
Rising costs and technological advancement in super specialty
treatment. Management
information is not satisfactory.
The patients are not satisfied with the services they get Low
utilization of the hospitals.
In rural areas, the access to services is also a problem.All
these problems indicate an urgent need for
reforms in the ESIS Scheme.
Central Government Health Insurance Scheme (CGHS):- Established
in 1954, the
CGHS covers employees and retirees of the central government and
certain autonomous and semi
autonomous and semi-government organizations. It also covers
Members of Parliament, Governors,
accredited journalists and members of general public in some
specified areas.
Benefits under the scheme include medical care, home
visits/care, free medicines and diagnostic services.
These services are provided through public facilities with some
specialized treatment (with
reimbursement ceilings) being permissible at private facilities.
Most of the expenditure is met by the
central government as only 12% is the share of contribution.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 42
The CGHS has been criticized from the point of view of quality
and accessibility. Subscribers have
complained of high out of pocket expenses due to slow
reimbursement and incomplete coverage for
private health care (as only 80% of the cost is reimbursed if
referral is made to private facility, when such
facilities are not available with the CGHS).
Universal Health Insurance Scheme (UHIS):- For providing
financial risk protection to the poor,
the government announced UHIS in 2003. Under this scheme, for a
premium of Rs. 165 per year per
person, Rs.248 for a family of five and Rs.330 for a family of
seven , health care for sum assured of Rs.
30000/- was provided. This scheme has been made eligible for
below poverty line families only. To make
the scheme more saleable, the insurance companies provided for a
floater clause that made any member
of family eligible as against mediclaim policy which is for an
individual member. In spite of all these, the
scheme was not successful.
The reasons for failing to attract rural poor are many :-
The public sector companies who were required to implement this
scheme find it to be
Potentially loss making and do not invest in propagating it. To
meet the target, it is
Learnt that several field officers pay the premium under
factious names. Identification of eligible families
is a difficult task Poor find it difficult to pay the entire
premium at one time for future benefit, foregoing
current consumption needs. Paper work required to settle the
claims is cumbersome Deficit in availability
of service providers Set back due to health insurance companies
refusing to renew the previous years
policies.
In 2004, the government also provided an insurance product to
the Self Help Group (SHG) for a
premium of Rs.120 and sum assured of Rs.10000/-. However, the
intake is negligible. The reasons for
poor intake are similar to those cited above.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 43
3. Insurance offered by NGOs/Community based health
insurance:-
Community based schemes are typically targeted at poorer
population living in communities. Such
schemes are generally run by charitable trusts or
non-governmental organizations (NGOs). In these
schemes the members prepay a set amount each year for specified
services. The premia are usually flat
rate (not income related) and therefore not progressive. The
benefits offered are mainly in terms of
preventive care, though ambulatory and inpatient care is also
covered. Such schemes tend to be financed
through patient collection, government grants and donations.
Increasingly in India, CBHI schemes are
negotiating with for profit insurers for the purchase of custom
designed group insurance policies.
CBHI schemes suffer from poor design and management. Often there
is a problem of adverse selection as
premiums are not based on assessment of individual risk status.
These schemes fail to include the poorest
of the poor. They have low membership and require extensive
financial support. Other issues relate to
sustainability and replication of such schemes.
Some of the popular Community Based Health Insurance schemes
are: - Self-Employed
Womens Association (SEWA), Tribuvandas Foundation (TF), The
Mullur Milk Co-operative,
Sewagram, Action for Community Organization, Rehabilitation and
Development (ACCORD), Voluntary
Health Services (VHS) etc.
4. Employer based schemes:-
Employers in both public and private sector offers employer
based insurance schemes through their own
employer. These facilities are by way of lump sum payments,
reimbursement of employees health
expenditure for outpatient care and hospitalization, fixed
medical allowance or covering them under the
group health insurance schemes.
The Railways, Defense and Security forces, Plantation sector and
Mining sector run their own health
services for employees and their families.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 44
4.7 IMPLICATIONS OF PRIVATIZATION ON HEALTH INSURANCE:-
The privatization of insurance sector and constitution of IRDA
envisage improving the
performance of state insurance sector in the country by
increasing benefits from competition in
terms of lowered costs and increased level of consumer
satisfaction. However, the implications
of the entry of private insurance companies in health sector are
not very clear. There are several
contentious issues pertaining to development in this sector and
these need critical examination.
Role of private insurance varies depending on the economic,
social and institutional settings in a
country or a region.
Critics of private insurance argue that privatization will
divert scarce resources away form the
pool, escalate health costs, allow cream skimming and adverse
selection. According to this view,
private health insurance largely neglects the social aspect of
health protection. In the contrast,
supporters of private health insurance claim that private
insurance can bridge financing gaps by
offering consumers value for money and help them avoid waiting
lines, low quality care and
under the table payments-problems often observed when households
can use public health
facilities for free or participate in mandatory social insurance
schemes. Both the arguments are
correct in the sense, private health insurance can be valuable
tool to compliment or supplement
existing health financing options only if they are carefully
managed and adapted to local needs
and preferences.
India, with relatively developed economy and a strong middle
class population, offers most
promising environment for private health insurance development.
Currently, private health
insurance plays only a marginal role in health care systems but
it is gradually gaining
importance.
Private health insurance is certainly not the only alternative
or the ultimate solution to address
alarming health care challenges in India. However, it is an
option that warrants- and already
receives-growing consideration by policy makers in the country.
Thus the question is not if this
tool will be used in the future but whether it will be applied
to the best of its potential to serve
the needs of the countrys health care system.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 45
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 46
RESEARCH METHODOLOGY
Types of Research Design: -Exploratory research design
Exploratory Research: - Descriptive Data.
Primary Data: - Market survey
Secondary data: - External Secondary Data: - Private Secondary
Data.
Private Secondary Data: - Internet
Conclusive research: - single cross sectional, descriptive
Research.
Data collection method: - Survey (Personal) surveywith the
person who has health
insurance policy holder .
Data collection instrument: - Questionnaire.
Sampling Design:- customer perception towards health insurance
policy
Target Population Definition: - health insurance policy
holder
Target population: -Ahmedabad city health policy holder
including all mis company
survey
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 47
Sampling Elements: -
Sampling Units: -
Sampling frame: - Not available.
Sampling Size: - 200
Extent: - Ahmadabad city.
Sampling Techniques: - Non-Probability convenience method.
A study on Investors Behaviour towards Mutual Fund of Corporate
Employees in Ahmadabad
city
MBA (FINANCIAL SERVICES) SEM-IV APRIL-JUNE 2015
Sample Size Determination:-
Calculation:-
A conducting research on investment behaviour of corporate
employees . It is using Likert scale
for measuring service quality & also he allowed 0.11 errors
in measurement. Confidence level
is 95%.
Step: - 01 calculation of standard deviation.
Se = Maximum value Minimum value
6 = 5-1
6 = 4
6 = 0.67
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 48
Step: - 02 calculation of Z value.
Z = 1.64
Step: - 03 Calculation of sample size.
N = ZS 2
e = 1.64 0.67 2
0.11
N = 199.78 = 200.
Scaling Techniques: -
Data Analysis:-
Data Analysis Software: - MS Excel & SPSS.
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 49
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 50
Gender:
Gender
Frequenc
y Percent
Valid
Percent
Cumulative
Percent
Valid male 180 90.0 90.0 90.0
femal
e 20 10.0 10.0 100.0
Total 200 100.0 100.0
Hear higher value of male is 180 and lower value of female is 20
from 200 respondence there are
less female that has health insurance
Gender
femalemale
Fre
qu
en
cy
200
150
100
50
0
Gender
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 51
Age:-
Age
Frequenc
y Percent
Valid
Percent
Cumulative
Percent
Valid less 30 years 152 76.0 76.0 76.0
30-40 years 39 19.5 19.5 95.5
40-50 years 8 4.0 4.0 99.5
above 50
years 1 .5 .5 100.0
Total 200 100.0 100.0
In age criteria there are 152 people has less than 30 years and
lowest is above 50 years has 1
health insurance
Age
above 50 years40-50 years30-40 yearsless 30 years
Freq
uenc
y
200
150
100
50
0
Age
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 52
Marital Status:-
Maritial status
Frequenc
y Percent
Valid
Percent
Cumulative
Percent
Valid single 55 27.5 27.5 27.5
marrie
d 145 72.5 72.5 100.0
Total 200 100.0 100.0
In marital status there are145 married has health insurance and
55 are single they has health
insurance
maritial_status
marriedsingle
Fre
quency
150
100
50
0
maritial_status
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 53
Family:-
Type of family
Frequenc
y Percent
Valid
Percent
Cumulative
Percent
Valid joint 43 21.5 21.5 21.5
nuclea
r 157 78.5 78.5 100.0
Total 200 100.0 100.0
There are nuclear has highest they has insurance and only 43
live in joint has lowest has health
insurance
TYP_fmly
nuclearjoint
Fre
quency
200
150
100
50
0
TYP_fmly
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 54
Education:-
Education
Frequency Percent Valid Percent
Cumulative
Percent
Valid primary 2 1.0 1.0 1.0
matrix 8 4.0 4.0 5.0
higher seaconday 4 2.0 2.0 7.0
graduation 101 50.5 50.5 57.5
post graduction 80 40.0 40.0 97.5
vocational 5 2.5 2.5 100.0
Total 200 100.0 100.0
The highest value of insurer are graduated and the lowest value
primary education they has
health insurance
Education
vocationalpost graductiongraduationhigher
seaconday
matrixprimary
Fre
qu
en
cy
120
100
80
60
40
20
0
Education
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 55
Occupation:-
Occupation
Frequency Percent Valid Percent
Cumulative
Percent
Valid employed 47 23.5 23.5 23.5
self employed 37 18.5 18.5 42.0
house wife 8 4.0 4.0 46.0
unemployed 5 2.5 2.5 48.5
professional 25 12.5 12.5 61.0
family owned business 78 39.0 39.0 100.0
Total 200 100.0 100.0
The highest value in occupation 78 family business they has
health insurance and the lowest
value has 5 unemployed has has less frequency
Occupation
family owned
business
professionalunemployedhouse wifeself employedemployed
Fre
quency
80
60
40
20
0
Occupation
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 56
Annual Income:-
Annual income
Frequency Percent Valid Percent
Cumulative
Percent
Valid less the 50000 24 12.0 12.0 12.0
50000-100000 17 8.5 8.5 20.5
100000-150000 18 9.0 9.0 29.5
150000-200000 46 23.0 23.0 52.5
above 200000 95 47.5 47.5 100.0
Total 200 100.0 100.0
The hugest value in 95 income that has above 200000 income has
preferring more health
insurance and the lowest value 17 there income come between
500000-100000 preferring less
health insurance
income
above 200000150000-200000100000-15000050000-100000less the
50000
Fre
quen
cy
100
80
60
40
20
0
income
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 57
Q.10 who is your insurer?
Frequency Percent Valid Percent
Cumulative
Percent
Valid public company 42 21.0 21.0 21.0
private company 157 78.5 78.5 99.5
any other 1 .5 .5 100.0
Total 200 100.0 100.0
The high value 157 has there health insurance in private company
and 42 lowest value has health
insurance in public company
Who_insurer
any otherprivate companypublic company
Fre
qu
en
cy
200
150
100
50
0
Who_insurer
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 58
Q.11 what type of health insurance policy you have?
Frequenc
y Percent
Valid
Percent
Cumulative
Percent
Valid individual health
insurance 132 66.0 66.0 66.0
group health
insurance 32 16.0 16.0 82.0
family floater
health insurance 35 17.5 17.5 99.5
other 1 .5 .5 100.0
Total 200 100.0 100.0
The highest value 132 has taken individual health insurance and
the lowest value 1 prefer in
other
Type
otherfamily floater health
insurance
group health insuranceindividual health
insurance
Freq
uenc
y
125
100
75
50
25
0
Type
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 59
Q.12 what are the reasons for going in for health insurance
policy?
Frequency Percent Valid Percent
Cumulative
Percent
Valid tax planning measure 13 6.5 6.5 6.5
travelling abroad 7 3.5 3.5 10.0
employers contribution 48 24.0 24.0 34.0
existing illness 4 2.0 2.0 36.0
avail good quality
medical treatement 42 21.0 21.0 57.0
risk coverage against
future illness 86 43.0 43.0 100.0
Total 200 100.0 100.0
The highest value of 88 prefer health insurance for risk
covering against future illness and the
lowest 4 existing illness has taken health insurance
Reasons
risk coverage
against future
illness
avail good
quality medical
treatement
existing illnessemployers
contribution
travelling abroadtax planning
measure
Fre
quen
cy
100
80
60
40
20
0
Reasons
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 60
Q.13 who persuaded you to purchase the policy?
Frequenc
y Percent
Valid
Percent
Cumulative
Percent
Valid insurance officials 126 63.0 63.0 63.0
relative 39 19.5 19.5 82.5
friend 30 15.0 15.0 97.5
advertisment 4 2.0 2.0 99.5
income tax
advocate 1 .5 .5 100.0
Total 200 100.0 100.0
The highest value 126 has insurance official has health
insurance and the lowest value of 1 that
take insurance for income tax advocate
Persuades_purchse
income tax
advocate
advertismentfriendrelativeinsurance officials
Freq
uenc
y
125
100
75
50
25
0
Persuades_purchse
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 61
Q.14 what approach was adopted in seeking health insurance
coverage?
Frequency Percent Valid Percent
Cumulative
Percent
Valid insurance agent
seeked you out 144 72.0 72.0 72.0
you seeked out
insurance agent 56 28.0 28.0 100.0
Total 200 100.0 100.0
The highest value 144 has insurance agent seeked then out asnd
the 56 lowest value you seeked
out insurance agent
Apprch_hlth_insu_covg
you seeked out insurance agentinsurance agent seeked you out
Fre
qu
en
cy
150
100
50
0
Apprch_hlth_insu_covg
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 62
Q.15 Do you agree that the services provided by the insurance
companies are delivered
effectively?
Frequency Percent Valid Percent
Cumulative
Percent
Valid yes 105 52.5 52.5 52.5
no 67 33.5 33.5 86.0
indifferent 28 14.0 14.0 100.0
Total 200 100.0 100.0
The highest value 105 has think that service has delivered and
lowest 28 has given indifferent
about the health insurance delivered
service_delver
indifferentnoyes
Fre
qu
en
cy
120
100
80
60
40
20
0
service_delver
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 63
Q.16 what is the chance of renewing the service after the health
insurance expiry of present
insurance policy?
Frequency Percent Valid Percent
Cumulative
Percent
Valid 100% 95 47.5 47.5 47.5
50% 48 24.0 24.0 71.5
25% 43 21.5 21.5 93.0
0% 14 7.0 7.0 100.0
Total 200 100.0 100.0
The higest value has of renew 95 respondence will 100% they will
renew policy and lowest
value of 14 they will not going to renew the policy
Renew_police
0%25%50%100%
Fre
qu
en
cy
100
80
60
40
20
0
Renew_police
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 64
Q.17 Are you willing to pay more for additional service, which
can be included in your
health insurance package?
Frequency Percent Valid Percent
Cumulative
Percent
Valid yes 78 39.0 39.0 39.0
no 122 61.0 61.0 100.0
Total 200 100.0 100.0
The highest value 122 has answer no for additional pay in health
insurance and 78 has response
yes pay more for health insurance policy
Pay_more
noyes
Fre
qu
en
cy
120
100
80
60
40
20
0
Pay_more
-
Customers perception toward health insurance empirical study in
Ahmadabad region
MBA (FS) SEM IV Page 65
Q.18 Do you think the promotional efforts being taken by
insurance company are sufficient
?
Frequency Percent Valid Percent
Cumulative
Percent
Valid yes 113 56.5 56.5 56.5
no 87 43.5 43.5 100.0
Total 200 100.0 100.0
The highest value of 113 response yes and lowest value 87 select
no for promotional efforts
being taken by insurance company
promotion_sufficient
noyes
Fre
qu
en
cy
120
100
80
60
40
20
0