Insurance for MSME workers key to sector’s growth: report

FICCI, KPMG analyse 219 enterprises across sectors

Updated - December 20, 2017 02:48 pm IST

Published - December 20, 2017 01:36 am IST - New Delhi

In an effort to analyse workforce welfare in terms of healthcare coverage, Federation of Indian Chambers of Commerce and Industry (FICCI) and KPMG have conducted a joint study covering 219 Micro, Small & Medium Enterprises (MSMEs) across 15 manufacturing and services sectors.

Financial aid

The report titled ‘MSME group health insurance penetration in India’ was released on Monday by T. S. Vijayan, chairman, Insurance Regulatory and Development Authority (IRDAI). Among the major findings of the report is that “approximately 90% of MSMEs do not offer any financial aid for medical purposes to the families of employees and that most micro and medium enterprises offer no financial support to their employees and their families”.

It also said that MSMEs preferred a basic cover of personal accident and critical illness with a focus on a reduction in premiums and coverage of employees and that they primarily prefer to purchase insurance through broking channels and bancassurance, with group health insurance penetration through online channels at a minimal level of about 6%.

‘Great opportunity’

Speaking after the report was released, G. Srinivasan, chairman, FICCI Health Insurance Committee and chairman and managing director, New India Assurance, said: “The MSME sector in the country is highly under penetrated in terms of healthcare cover. Hence, this segment offers a great opportunity for the health insurance industry to expand its outreach and increase accessibility to affordable healthcare.”

Shashwat Sharma, partner and head, insurance, KPMG, said: “The Indian economy is one of the fastest growing in the world and the success of MSMEs is critical for maintaining India’s growth story. A key aspect of this story would be providing access to quality healthcare and social security coverage to the largely informal or unorganised workforce employed in this sector. This could result in significant productivity improvement in this sector. The goal of improving healthcare coverage to the MSME workforce can be fulfilled through both development of infrastructure and delivering effective and affordable healthcare.”

He added: “The government, the insurance regulator [IRDAI] and the insurance industry can together play a critical role in achieving this objective.”

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