The way the insurance Sector operates in India and how NAVI is disrupting this space

Let’s understand the rabbit holes of the insurance claim settlement process and understand how NAVI is solving it.

In layman’s terms, Health Insurance is a way where a lot of people pool in their money so that if one of those needed in the future could avail that.

There are two conventional ways to make money for insurance companies.

1- Sell more plans for the maximum number of people.

2- Reject Insurance claims as much as possible.

While the first one is the right path it is also the hardest of the two. Because it requires building trust in Minds of people by serving them in their most difficult times.

But sadly most of the insurance companies choose the second and the easier option of rejecting claims to make more profit.

This turns into a vicious cycle by more people whose name gets rejected feels cheated and give negative feedback to the people around them this leads to a lesser number of people buying health insurance and finely results in companies try trying to reject more Insurance claims.

This has seriously hampered the growth of this sector and if we exclude Government-sponsored medical insurance the CAGR (Compound Annual Growth Rate) in this sector is only 10–15%.

We all have known someone or even ourselves who suffered during the Insurance claim process for some sort of illness and the experience we generally go through is time taking and the rules and regulations which come in our way are so bizarre that at that time we feel cheated by the insurance agent who did all the sweet talk in the world to sell the policy.

Now, let us understand the pain points of consumers who opt for medical insurance and apply for a claim.

I have taken these consumer pain points from a YouTube channel named “Labour Law Advisor” Which did a survey amongst its viewers to understand what they went through while applying for their claims.

Pain points that came out in the survey-

1-Biggest nightmare of a user is the lack of partners hospitals of the insurance companies for a customer living in cash 2 or 3 cities in case someone needs immediate hospitalization.

2- Cashless facility or redemption of bills. Here the cache is most of the companies start playing with contract rules with relapsed time and bizarre rules so that they could reject claims for a silly reason like-

A- A patient having no pre-existing disease was denied a claim for a heart attack because he took prescriptive medicines for high blood pressure, and the company claimed the customer took those pills so that he gets to a point where he needs surgery.

B- Despite pre-disclosure of a disease the customer is sold the wrong plan by the salesman which leads to rejection of the claim later.

C- A delay in sending an initial prescription to the insurance company leads to an absolute rejection of the whole Insurance claim.

D- A doctor at Partner Hospital may write about the history of a pre-existing disease that may have developed after the plan was taken leading to the whole rejection of the claim.

E- Room rent cap leading to cut on the overall insurance claim.

Let me explain-

Suppose you buy a plan of 5 lakh rupees and company policy mentions a cap on room rent supposed to its 1%, which is 5000 thousand rupees, and you are required to be admitted in ICU where room rent is supposed 10000 rupees.

Since the cap on room rent is just 5000 rupees and your bill is 10000, which means your room rent cap is 50% of real room rent in the ICU.

Now the company will automatically reimburse only 50% for all the other expenses like medicines, doctor fees, and all the other fees combined on a Pro-Rata basis.

This leads to fewer choices available to a customer in terms of the rooms, or even a big setback if the customer is unable to understand the real deal.

Let’s see what’s NAVI takes on each of the concerns a General customer of Health Insurance has-

1- Navi has 10,000 hospitals as their partners right now which offers cashless facilities at this point in time, and this number is continuously growing. which solves the major problem of a consumer of Health Insurance, who lives in a tier 2 or 3 city.

2- It makes it clear in the terms of the contract whether a pre-existing disease is considered or not and the waiting period is clearly shown to the customers for each pre-existing disease.

3- No cap on room rent and hence there is no deduction on claim amount on a Pro-Rata basis.

4- NAVI claims to have the highest claim settlement ratio of 97% which is the highest in the industry. But here is the catch, NAVO is very new In this industry and most of its customers are not yet 60 years old and the sample size is very small, the real claim settlement ratio will only come out when it shows this consistency with the passage of time.

5- Navi claims to have the least claim settlement time which is 30 mins, and this is possible with increased use of technology and decreased human interference. in the process of claim settlement, and if the delay in claim settlement happens due to any reason the customer is notified for the reason of delay.

6- Biggest advantage which Navi offers is it accepts OPD bills and yearly checkups in the medical claim.

7- It has clearly mentioned the terms of the contract for top-up and super top-up in the existing insurance plan.

8- It also offers a monthly premium for the consumers which decreases the burden of cost on the pocket of the middle class which is the majority of the Indian population.

I hope you enjoyed reading this article, and please write in the comment section if you have also gone through any similar experiences or have any suggestions for the insurance companies.