"MSMEs form the larger part of India's unorganized sector, which leaves a majority of the sector's workforce without any social security. This section of the society along with their families need to be brought in the fold of healthcare protection not only as a part of a social initiative but also as a lever for improving workforce productivity," FICCI and KPMG said in its report titled, "MSME group health insurance penetration in India".
"Providing healthcare coverage is also an important aspect of employee welfare and this remains underpenetrated among MSMEs," it added.
The survey said that approximately 90 per cent MSMEs do not offer any financial aid for medical purposes to the families of employees and almost no micro and medium enterprises offer financial support to their employees and their families.
MSMEs preferred a basic cover of personal accident and critical illness with a focus on a reduction in premiums and coverage of employees only and they primarily prefer to purchase insurance through broking channels and bancassurance, with group health insurance penetration through online channels at minimal level of about 6 per cent.
Reaching out to MSME for health insurance has remained a massive challenge for the industry owing to lack of data, diversity and unstructured framework of organisation, it explained.
Customisation of group health insurance products, standard advisories and putting up a distributions channel has been some of the many challenges that one has to face.
"The goal of improving healthcare coverage to the MSME workforce can be fulfilled through both development of infrastructure and as well as delivering effective and affordable healthcare," KPMG in India partner and head - insurance sector Shashwat Sharma said.
"The Government, the insurance regulator IRDAI and the insurance industry can together play a critical role in achieving this objective," Sharma added.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.