In 2014, LeapFrog Labs and Mahindra Insurance Brokers ran a pan-India study to examine access to, and demand for, critical health services, including health insurance.
The study interviewed nearly 1,700 individuals across rural India, including customers and non-customers of LeapFrog portfolio company Mahindra Insurance Brokers Limited. This study was conducted in collaboration with Neilsen, India.
A whistle-stop tour of findings
- Quality care is in short supply, and health shocks are a significant financial burden
Nearly 40% of clients interviewed fall sick at least once a month but are on average 11 kilometers from any hospital. Approximately 45% say health shocks always lead to financial problems, probably because 82% fund healthcare costs from their savings. These trends persist at all income levels, though are more prevalent, and shocks felt more strongly, at lower income levels.
- There are sizeable unmet needs for health insurance in existing channels
Penetration of health insurance is overwhelmingly low in India, and this study finds exclusion exists regardless of income or occupation. At Mahindra Finance, 95% of customers are low income and 83% have no health insurance. Access is even lower for non-customers, where 92% have no health insurance.
- Price point and customisation important
Existing Mahindra customers are willing to pay $2 per month for coverage. With over 1 million customers this is a sizeable immediate market, though customisation of product is important.
- Low understanding of public cover creates an opportunity to build trust
Most rural non-customers were not familiar with public cover options. Consequently, they rely on self medication. Mahindra used this finding as an opportunity to educate customers on public cover, and design a top-up product to provide additional risk cover.
Delivering health security across India
The insights gained from this survey helped Mahindra develop a successful Hospital Cover product from $2 a month, 40% cheaper than its competition. The range of cover – from $1,000 to $10,000 – provides for cashless treatment in 4,000 hospitals across rural India, provision of drugs and medical care, instant activation of coverage and no medical underwriting.