As of September 2009
A partnership was finalized with one insurance company, Bharati Axa General Insurance Co (BAGI). A preliminary needs analysis was carried out with BAGI amongst the community to support product development. This created a feeling of involvement for the community. The analysis indicated a need for an inpatient hospitalization cover to cover the cost of illnesses that could not be managed at home. Two options of the product, one with full payment of the claim with a higher premium and the other with a 20 per cent co-payment from the insured with a lower premium were developed. Surprisingly, prospective clients in focus group discussions preferred the co-payment option. This option was perceived as being less prone to false and excessive claims since a portion of the cost had to be borne by the claimant.
The project envisages one more insurance company covering members in two other federations to enable a comparison of insurance buying behavior and assess the demand for insurance products that offer different covers. Two companies backed out of the project during the search for the second insurer.
Recruitment and training of IPs and ICs started. Processes for collection of premium from the members and passing them to the insurance company were developed. Mechanism of payment of service charges by the insurance company to PWDS was worked out.
To mitigate adverse selection a Self Help Group is allowed to join only if 75 per cent of the members agree to enroll in the product. Though restrictive, this requirement should prevent only unhealthy members from enrolling.
As of February 2010
One health product was launched with BAGI in five federations. Close to 4,500 families and 12,000 members were insured.
Insurance is sold by the IPs and ICs who were assisted by the Federations and their staff in convincing the members to enroll. The trust built by the Federation over the years helped this process. The insurer’s field teams assisted and resolved queries as the enrollment process rolled out.
One unique feature of the enrollments till now has been that four of the five federations and SHGs are opting for the co-pay option.
HDFC Ergo General Insurance Company (HEGI) was selected as the second insurer. A project was developed for two additional federations. The product and processes have been finalized and will be implemented starting July 2010.
As of July 2010
Enrollment has continued in the five Federations and 6,592 families with 16,501 members have been enrolled. A total of 40 hospitals in three districts have been networked to provide cashless facility to the insured members.
Claims processes have been refined but number of claims has been high putting pressure on the premium for renewals.
A qualitative survey has been conducted amongst the households to test their understanding of insurance and identify any product or process features that might require modification.
The second insurer HEGI is yet to start operations due to internal constraints within the insurer related to the readiness of the technology for enrolment, resulting in two Federations remaining unserved.
As of December 2010
The second insurer, HEGI,started operating in two Federations in November using a mobile phone-based enrollment process; this was a unique experiment in the country. The enrollment form is programmed onto the IC’s mobile phone and the details of the client are fed directly into the phone. These are uploaded onto a computer and transmitted to the central server of the organization for issue of cards and policy. Post initial hitches, the system is working fine and has helped in policy issuance time being reduced to ten days from the earlier 21-30 days.
Since the federation staff members are actively involved in the customer awareness and education programmes, and have strong relationships with the community members, the federations are trying a modified process of using their staff for enrollments and premium collections, instead of IPs. Results of this process vis-à-vis IP based enrollments remain to be seen.
Unlike in the case of BAGI, HEGI did not have a clause of a minimum of 75 percent of SHG members joining the programme; BAGI had included this clause to mitigate adverse selection. A comparison of the claims ratios will be done at the completion of one year to evaluate the impact of the difference in processes.
The first insurer, BAGI wanted to reevaluate the product, price and processes as the claims ratio reached 130 per cent. Pending approval of the revised parameters and pricing, BAGI stopped renewals of policies in September but continued to provide efficient service for the claims that were being reported. The Federations and the communities were very satisfied with the service being offered and wanted to continue with BAGI. They were open to a “reasonable” increase in premium despite options of other insurance companies being available. BAGI is actively involved in discussions on a modified product and pricing, and hopes to start renewals and fresh enrollments once a mutually acceptable solution is reached.
One federation dropped out since there was a state government sponsored health insurance programme available and members availing of loans from nationalised banks were being enrolled into it, thereby reducing the appeal of the PWDS programme.
As of June 2011
HEGI continued enrollments in the two federations and has enrolled 1050 families. In contrast to the experience with BAGI, nearly all members of one federation opted for the co-payment option whereas nearly all members of the other federation did not opt for the co-payment option. The process of mobile phone based enrollments has helped further reduce the policy issuance time to six days. Only two new hospitals were added to the network, in an effort to direct customers to specific hospitals to get better volumes and rates from them.
The Federations, PWDS and BAGI reached an agreement for a modified product with a premium increase of about 30 per cent. An enrollment plan along with renewal plan is now being worked out.
Since enrolments are delayed due to elections in Tamil Nadu, PWDS wants to conduct more workshops for the insurance sales staff and potential clients. PWDS, in collaboration with the Federations and the insurance companies is working on a plan for these workshops and training programmes.
Date of last Learning Journey update: June 2011