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 International Journal of Economic Research

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Volume 14 • Number 16 (Part 3) • 2017

Factors Influencing the Purchase Intention of Health Insurance Policy-

An Empirical Study in Malaysia
K. Jayaraman1, Naseem Alesa2 and Noor Azeema2
1
Associate Professor, Taylor’s Business School, Taylor’s University, 47500, Subang Jaya, Selangor, Malaysia.
Email: Jayaraman.Krishnaswamy@taylors.edu.my
2
Post Graduate Research Scholars, Graduate School of Business (GSB), Universiti Sains Malaysia (USM), 11800, USM, Penang.
Email: naseem_aliza@yahoo.com, noorazeema@gmail.com

ABSTRACT
People around the globe realized the importance of health insurance since uncertainty becomes the order of the
day. The purpose of this empirical study is to give the customers’ perceptions on the products and services of
health insurance policies and the factors influencing the purchase intention or continuance of health insurance.
The conceptual research framework has been developed to the purchase intention of health insurance policy
and the framework is supported by stimulus-response model (SR), an important marketing theory. A cross
sectional study using the primary survey method has been adopted, about 105 Malaysian citizens who are the
head of the family have been selected for this study. Of this, 45 (42.9%) of the respondents were discontinued
from holding Health Insurance policies over the last 2 years and the remaining have one or more policies at
present. The respondents are more concerned on the reputation of the health insurance service providers.
On the whole, customers are attracted on the health insurance products and services offered by the service
providers. Interestingly, females are favouring more health insurance products and services than males. The
professionals who earn more than RM 6000 per month extract information on health insurance policy from
their colleagues and friends and derive the fullest benefits of health insurance policy. The findings of this
study will help health insurance companies, particularly health insurance agents, to influence customers who
have intention to purchase health insurance policy. Further, the present study provides marketing tips to
health insurance service providers to design more effective programs to promote health insurance market in
developing countries like Malaysia.
Keywords: Health insurance products and services; Purchase Intention; non-linear canonical correlation;
Market Decision Making

1 International Journal of Economic Research

 K. Jayaraman, Naseem Alesa and Noor Azeema

1. INTRODUCTION
Griffin (1992) stated that health insurance protects the unforeseen risk and in turn assure individual’s well–
being with the fixed premium. The health expenditure in Malaysia was 3.0 % of GDP in the year 1995 and
it rose up to 4.2% in 2014 as reported by the World Bank (2016). The rapid healthcare expenditure makes
some caution to the people to look for health financing arrangements to protect themselves towards any
emergency medical care. It is estimated that 40% or about 10.8 millions of Malaysians are covered by health
insurance while the remaining 16.2 million people are without health insurance policies. Majority of the
insurances are covered by the employers through group or individual insurances and the rest have their
own (IHCE, 2011). Malaysia is in need of more health care services and health care funding (Yu, Whynes
& Sach, 2011). Gumber and Kulkarni (2000) pointed out that health insurance are valued effectively for
catastrophic illnesses but not in the case of small financial losses due to common illnesses. The growing
increase in medical costs demand for health insurance policies to have more safety and family protection
(Chen & Jin, 2012). The health insurance increases the health system performance and reduces the financial
burden on individuals. The potential scope for health insurance market is quite big as less proportion of
Malaysians was covered under Malaysian Health Insurance (MHI) policies. Private health insurance plays
an important role in health care financing system in developing countries (Bradley Herring, et al., 2006).
Several studies have found that health insurance is able to increase health system performance and
provides less burden to individual responsibilities. The financial protection is essential for low and middle
class group people as everyone is vulnerable to any health disorder (Chankova, Sulzbach, & Diop, 2008;
Namibia, 2008; Sepehri, Sarma,& Simpson, 2006; Wagstaff & Yu, 2006; Wang, Yip, Zhang, Wang, & Hsiao,
2005; Yip & Berman, 2001). Basically, insurance companies are implementing the concept called risk sharing.
Risk sharing is a contract between pair of individuals or groups of people that share the same interest. For
example, if a person is suffering from illness or injury and hospitalised at least a night, the medical bill is
covered by the insurance provider based on the eligibility of the health policy (Genicot and Ray, 2006).
Wagstaff and Doorslaer, (2003); Gertler, Levine and Moretti, (2003); Gertler and Gruber, (2002) mentioned
that when a person experiences health problems, their medical expenses typically rise and at the same time
their contribution to household expenditure will go down. The health insurance premium price also has an
effect on individuals in the purchase intention of health insurance policy. Hence, it is important to know
from the customers, the factors that drive the intention and or continuance to purchase health insurance
policy. Towards this, an attempt is made in the present article to investigate the influencing predictors
of purchase intention towards health insurance policy. The identification of these predictors will assist
the marketers of the insurance companies and health insurance agents to nurture the correct segment of
customers who will go for health insurance policy.

2. RESEARCH FRAMEWORK
The present study applies the management theory of stimulus–response model (Bagozzi, 1986) as a base
for conceptualization and covers three independent variables namely Health Insurance products, Services
extended by the insurance providers and Individual perception on Health Insurance, four moderating
variables (gender, age, education and income) and one dependent variable namely the purchase intention/
continuance of Health Insurance policy. The measurements scale for the identified variables are borrowed
from the extensive literature review. The proposed conceptual research framework is displayed in Figure 1.1.

International Journal of Economic Research 2

 Factors Influencing the Purchase Intention of Health Insurance Policy-An Empirical Study in Malaysia

Independent Variables Moderating Variables Dependent Variables

Gender, Age
Education,
Health Insurance Income
products
Purchase Intention or
Services extended by continuance of
the insurance providers Health Insurance
policy

Individual perception
on health insurance

Figure 1.1: Conceptual Research Framework

2.1. Hypothesis Development

The services offered through health insurance is clearly tangible when the insurance agents can portray the
reality on grounds. The past studies found that the intention to purchase health insurance policy depends
on premium amount and the innovative features of the insurance plans (Chen et al., 2002; Lofgren et al.,
2008; Ying et al., 2007). Wolfe et al., (2004) have suggested that by increasing the number of hospitals
covered under health insurance will promote more people to go for the purchase of health insurance policy.
Hence, the study hypothesized that:
H1: Health Insurance products have significant and positive influence on the Purchase Intention or
continuance of Health Insurance policy.
According to Bala (2011), consumers who intend to purchase health Insurance policies expect
better service quality. Kiumarsi et al. (2015) and Seyedeh Khadijeh Taghizadeh et al. (2016) have studied
the importance of service innovation in offering service quality to attract customers in post office and
telecommunication sectors respectively. On the other hand, Zeithaml (2000) stated that to retain the
customers in the Insurance Market and to have win–win solution, an exceptional services place an important
marketing strategy. Shariff, et al. (2016) have obtained the service quality determinants of retaining container
haulage service providers in the maritime shipping context. The intention to purchase health insurance
policy is significantly and positively related to quality involved in the health services (Asgary et al., 2004) and
also connected to the standard of the referral hospitals. Health Insurance Company can sustain business in
the Malaysian market, when there is a continuous monitoring and improvement in their offered services.
Accordingly, the study hypothesizes that:
H2: Services extended by the Health Insurance providers are positively influencing the Purchase
Intention or continuance of Health Insurance policy.
Consumer perception is operationally defined as consumers’ beliefs on the received or experienced
services (Azeema et al., 2016; Brown & Swartz, 1989). The satisfied consumer perception matters a lot,
since it directly influences the customer’s confidence towards the purchase of health insurance policy. The
health insurance company’s performance in the past and its reputation among public can boost customer
perception. Blodgett et al. (1997) stated that customers prefer to purchase health insurance policy based
on the recommendations from their friend and relatives through word of mouth. Therefore, the study
hypothesizes that:

3 International Journal of Economic Research

 K. Jayaraman, Naseem Alesa and Noor Azeema

H3: Individual perception on health insurance has positive influence on the purchase intention/
continuance of health insurance policy.
Many research studies have stated that income and education have an effect on the purchase
intentions (Dong et al., 2003; Lofgren et al., 2008; Zhang et al., 2006). Carson et al., (2009) claimed that
socio– demographic factors have an impact on the purchase decision of insurance policy. Brown and Kim
(1993) found that health insurance becomes more available in family with higher income group. Case and
Paxson (2005) stated that there are much variations among gender on health considerations and morality
rates. Leveille (2000) concluded that women remain in a disabled state for a longer period of time than
men. According to Kaplan and Kronich (2006), age is an important variable in health insurance purchase
decision. The elderly person will face certain health risk and definitely the health insurance is required for
their self–protection. Hoffman (2008) opinioned that educated persons have higher purchase power on
health insurance. Accordingly, the study hypothesizes that:
H4: The Socio–Demographic and Economic variables namely Gender, Age, Education and Income
moderate the cause and effect relationship of the variables identified in the conceptual framework.

2.2. Significant Findings and Results

The survey questionnaire has three sections. Section A includes seven socio–demographic and economic
variables to find the background of the respondents. Section B includes 17 structured questions borrowed
from the literature that designed to generate responses on five point Likert scale (1–5). Section C has
6 questions measuring the attitude of individual towards purchase intention or continuance of health
insurance policy and is the dependent variable, measured on a five point Likert Scale. A total of 200 survey
questionnaires were distributed through hardcopy in the insurance companies of both public and private
sectors. About 138 (69%) filled–in questionnaires were collected of which 33 were excluded for the study
since these respondents were sponsored for health insurance from their respective employers. Thus, 105
respondents were included for the study (Table 1.1). Out of 105, 63 (60%) were females and 42 (40%) were
males. Majority of the respondents belong to married category (63.8%). About 95.2% of the respondents
have completed schooling (SPM/STPM and above). The age of the majority of the respondents is between
30 and 39 years which constitutes 41% of the sample. Majority of the respondents 61 (58.1%) prefer to seek
health care in private hospitals, followed by 22 (21.0%) respondents who prefer to seek medical treatment
in community hospitals due to low cost. As many as 95 (90.5%) out of 105 respondents have agreed that
health insurance reduces their financial burden during emergencies. Out of 105 respondents, 60 (57.1%)
were holding one or more health insurance policies currently and the remaining were discontinued health
insurance scheme over the last 2–3 years.

Table 1.1
Profile of the Respondents (n = 105)

Demographic Profile Description No. of Respondents %

Male 42 40.0
Gender
Female 63 60.0

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 Factors Influencing the Purchase Intention of Health Insurance Policy-An Empirical Study in Malaysia

Demographic Profile Description No. of Respondents %

Single 38 36.2
Marital Status
Married 67 63.8
Less than SPM 5 4.8

SPM/STPM 42 40.0
Education
Degree 42 40.0
Professional 16 15.2
20–29 30 28.6
30–39 41 39.0
Age (in years) 40–49 23 21.9
50–59 10 9.5
60–69 1 1.0
< RM2000 13 12.4
RM2001–RM4000 28 36.7
Total Household Income
RM4001– RM6000 26 24.8
> RM6000 38 36.2
Health centre 18 17.1
Community Hospital 22 21.0
Convenient place to access health care
Private Hospital 61 58.1
Others 4 3.8
0 (last 2–3 years) 45 42.9
1 41 39.0
No. of Health Insurance polices 2 17 16.2
3 2 1.9

Table 1.2 provides the descriptive statistics which helps to describe a series of observations in a more
understandable way. Descriptive statistics for the means and standard deviations were obtained for the
interval scaled independent and dependent variables and all the variables show the mean value above 3.5
on a 5–point scale. Since, the standard deviation (SD) lies between 0.49 and 0.68, the respondents have
good personal agreement and the measurement variation in the questionnaire items among the respondents
is low. All the independent variables are positively and significant correlated with the dependent variable
namely the purchase intention or continuance of health insurance. In the multiple regression, the beta
coefficients might be biased if the estimation involves significant levels of collinearity among the independent
variables. When collinear variables are identified, it would be helpful for further study, whether there is a
contributory (casual) link between these variables. Multicollinearity exists when Variation Inflation Factor
(VIF) value is greater than five (Hair et al., 2010). Since, the VIF for all independent variables are less than
five, collinearity among the independent variables is not an issue in the present study.

5 International Journal of Economic Research

 K. Jayaraman, Naseem Alesa and Noor Azeema

Table 1.2
Descriptive Statistics of study constructs (n = 105)
Purchase Services by HI Perception on
Construct Mean SD HI products VIF
Intention on HI agents HI policy
Purchase Intention on HI 3.82 0.49 1.00 – – – –
HI products 3.86 0.61 0.56** 1.00 – – 1.68
Services by HI agents 3.79 0.67 0.48** 0.60 1.00 – 2.05
Perception on HI policy 3.60 0.68 0.32* 0.26 0.51 1.00 1.36
h*p < 0.05; ** p < 0.01; HI–Health Insurance

2.3. Factor Analysis and Reliability Analysis

Table 1.3
Factor Loadings for independent variables (n = 105)

Constructs Items Factor loadings

Range of coverage 0.808
No. of hospital covered 0.760
Health Insurance Fringe benefit/bonus 0.748
(HI) products Reduce financial burden 0.724
Premium Amount 0.700
Policy process formalities 0.524
Understand the facet of the programme 0.818
Claim procedures 0.810
Services extended Service provided by insurance company 0.719
by health Insurance
(HI) providers Accessibility of hospital covered 0.690
Service provided by agent 0.676
Service quality from private hospital 0.639
Recommendation by colleagues 0.825

Individual Multinational company 0.777

perception on health Local company 0.752
insurance(HI) Recommendation by friends/ relatives 0.746
Company reputation 0.658
KMO sampling of adequacy 0.801 0.808 0.761
χ2 = 192.3, χ2 = 217.9, χ2 = 174.6,
Barlett’s Test of Sphericity
p = 0.00 p = 0.00 p = 0.00
Variance explained (%) 51.3 53.1 56.8
Reliability ( Cronbach’s Alpha) 0.805 0.820 0.807

International Journal of Economic Research 6

 Factors Influencing the Purchase Intention of Health Insurance Policy-An Empirical Study in Malaysia

The question items in the three constructs of the independent variables namely health insurance products,
Services extended by health Insurance providers and individual perception on health insurance are considered
for the confirmatory factor analysis to determine the subjective measurement error and to evaluate the
convergent validity. The main factor loadings for all the question items are above 0.5 which establishes
the fact that the question items measure their respective constructs. The sample size for the present study
is sufficient since the KMO measure is above 0.7 in all cases (Hair et al., 2010). The Cronbach’s alpha to
measure consistency was observed using reliability analysis. The Cronbach’s alpha values of above 0.70
(Hair et al., 2010) for the constructs indicate that the data is consistent and the results in Table 3 indicates
that the Cronbach’s alpha lies between 0.805 and 0.820. The summary of the factor analysis and reliability
analysis for each construct of the study variables are shown in Table 1.3 above.
Table 1.4 illustrates that the multiple regression model fits well to the data (R2 = 0.35, F = 18.3,
p < 0.001). The assumptions of multiple regression analysis are fully satisfied and mainly there is no
multicollinearity among the independent variables as Variation Inflation Factor (VIF) is less than 5.0 for
all independent variables and the Durbin Watson test statistic value of 2.163, establishes the independence
of the error term in the regression model. The analysis reveals that all the three independent variables, the
health insurance products and services extended by health insurance providers and perceptions on health
insurance are found to be statistically significant and positively influencing on the purchase intention or
continuance of health insurance policy. In fact, health insurance products influence purchase intention /
continuance of health insurance policy at 1% level of significance (t = 2.91, p = 0.004), whereas services
extended by health insurance providers influence purchase intention/continuance at 5% level (t = 2.17,
p = 0.032). Also, individual perceptions on health insurance influences purchase intention at 5% level.
Hence, all the three hypotheses H1 and H2 and H3 are supported.

Table 1.4
Results of Multiple Regression Analysis without moderator variables

Independent Variables Std β t–value Decision VIF

HI products 0.30 2.91** H1 is supported 1.68

Services extended by HI providers 0.25 2.17* H2 is supported 2.05

Individual perception on HI 0.17 1.82* H3 is supported 1.36

R2 0.35

F –value 18.30

p-value 0.00

Durbin Watson 2.163

*
p < 0.05, **p < 0.01

7 International Journal of Economic Research

 K. Jayaraman, Naseem Alesa and Noor Azeema

3. DISCUSSIONS ON THE FINDINGS

The Malaysian respondents are highly satisfied with the health insurance (HI) products as HI is considered
to be affordable compared to the high medical treatment cost. The insurance premium amount payment
can be made either half yearly or annually. The health insurance products include wide range of hospitals
which ensure the policy holders to choose the right hospital of their choice when emergency arise. Also,
the process of admission in the hospital has been simplified considerably and the policyholders have to get
approval in the form of guarantee letter from the health insurance providers. Generally, 5% to 10%fringe
benefits on the premium will be given to the HI policyholders if they continue to participate in the following
year. However, the policy holders are expected to do the renewal before the expiry date of the HI policy.
The HI policy process formalities are made simpler to the convenience of the policyholders so that they
can pay premium amount either by cash or by credit/ debit cards. In additions, unlike earlier days, the
claim formalities have been made much easier and paperwork has been minimized to the extent possible
with automation and computerization. Most of the respondents agree that by having a health insurance it
can reduces the financial burden as the medical treatment and medicine expenses are costly now a days.
In general, insurance agents are the drivers of health insurance provider’s performance. They provide
information and advice to customers so that customers can aware on the health insurance programs. The
quality services and comfort that have been provided by the private hospitals attract customers to go for
health insurance policies. According to the respondents, insurance provider’s reputation brings the primary
effect on the purchase intention or continuance of health insurance policy. Word of mouth from friends
and relatives can also bring good perceptions to customers since they might have experienced benefits
earlier using the medical card. Recommendations from colleagues is another perception that encourages
respondents to have positive sentiment towards the purchase intentions.
In addition to the multiple regression model in Table 1.4, the hierarchical regression model has been
fitted, found to be statistical significant with R2 improves from 0.35 to 0.452 an increase of 10% when the four
moderator variables (gender, age, education and income) are included in the analysis. The gender moderates
the relationship between HI products on the purchase intention/continuance of health insurance policy
(t = 2.36, p = 0.02). Individual perceptions on HI was also significantly influencing the purchase intention/
continuance of HI policy (t = 4.46, p = 0.00). With respect to moderator variable gender, females are highly
influenced on the salient features of HI products than males. It could be due to the fact that females feel
less secured and needed more protection compared to males in society. However, the services rendered
by HI providers is not found to be significant with purchase intention or continuance of health insurance
policy when moderated by gender. The respondent’s age is divided into dummy categories but has no
moderation effect on the purchase intention of health insurance policy. Similarly, education and Income did
not play a moderating role in influencing the purchase intention / continuance of health insurance policy.

3.1. Variables influencing Purchase Intention /Continuance of health insurance policy

Alternatively, the nonlinear canonical correlation technique has been used to determine how similar sets
of categorical variables are related to one another when it comes to determine the purchase intention of

International Journal of Economic Research 8

 Factors Influencing the Purchase Intention of Health Insurance Policy-An Empirical Study in Malaysia

health insurance policy. The canonical correlation analysis is an extension of multiple regression analysis,
where the second set (dependent variable) does not contain a single response variable, but multiple
variables. From the study variables of health insurance, six sets are compared in the present study
by taking socio demographic variables in set–1, illness history in set–2, HI products items in set–3, HI
services items in set–4, HI perception items in set–5 and the intention/continuance to purchase HI policy
items in set–6. The variables in set–1 to set–6 are either nominal or ordinal (rated on a 5–point Likert
scale) and the variable descriptions together with the goodness of fit for non–linear canonical correlation
of these six sets are provided in Appendix–I. The fit provides discrimination measures for each variable
through two dimensions. Larger discrimination measures indicate that the categories of the variable are
better separated. For instance, discrimination measure for educational level is more in dimension–1 than
in dimension–2 irrespective of multiple or single fits. On the other hand, the discrimination measure for
age is more in dimension–2 than in dimension–1. On the whole, there is no difference between multiple
and single fits and the fitted loss is zero. It indicates that the non–linear canonical correlation model fits
well to the considered six sets of items for the analysis. Table 1.5 reveals the overall findings of non–linear
canonical correlation analysis using the quantification of centroids by two dimensions, where centroids are
the representation of the locations of the categories in the object space. Based on the original and projected
centroids, four corners were identified and the ultimate outcome of the purchase intention/continuance of
HI policy is specified. Within each corner, those variables which are highly correlated are displayed. Thus,
the non–liner canonical correlation analysis provides four corners namely highly favorable respondents
in Corner–I, satisfied respondents in Corner–II, enjoying the benefits of HI policy in Corner–III and
non–favorable respondents in Corner–IV. Out of these four corners, the respondents in Corner–III
derive the fullest benefits of HI policy as they realize the importance of HI. These respondents belong
to professional category earning more than RM 6000 per month and gather details on HI policy through
their colleagues and friends. Corner–I contains those variables which are highly favorable to the purchase
intention/continuance of HI policy. The females who are single with some economic problems and have
some illness are dominated in this corner. The educated respondents with under–graduate degree, earning
less than RM 6000 dominate in Corner–II. These respondents have HI policy of multinational companies
(MNCs) and are highly satisfied with the accessibility of hospitals covered by the health insurance providers.
Meanwhile, respondents in Corner–IV were totally disagreeing with the operational and functional activities
of HI providers and agents. The respondents in this corner belong to married males with less economic
problems. This group of respondents needs to be convinced by HI providers by highlighting the significance
of HI policies to capture the market further.
Economic Problems (EP), Range of coverage (ROC), No. of hospital covered (NHC), Fringe
benefit/bonus (FB), Reduce financial burden (RFB), Policy process formalities (PPF), Understand the
facet of the programme (UFP), Claim procedures (CP), Service provided by insurance company (SPI),
Accessibility of hospital covered (AHC), Service provided by agent (SPA), Service quality from private
hospital (SQPH), Recommendation by colleagues (RC), Multinational company (MNC), Local company
(LC), Recommendation by friends/ relatives (RFR), Company reputation (CR)
9 International Journal of Economic Research
 K. Jayaraman, Naseem Alesa and Noor Azeema

Table 1.5
Findings of Non–Linear Canonical Correlation Analysis
Corner–I Corner–II
Highly Favourable Group Satisfied Group

Marital Status: Single Education: Degree

Gender : Female Household Income: < RM 6,000
Presence of Illness: Yes Health care: Yes
Economic Problem: Yes AHC ↑
Resort to Private hospital RC ↑
ROC ↟ MNC ↑
RFB ↑
SPA ↟ Focused Less
Group canvas
UFP ↑
CP ↟

Corner–III Corner–IV
Enjoying Group Non–Favourable Group

Education: Professional Marital Status: Married

Household Income: > RM 6,000 Gender: Male
Health Care: No Economic Problem No
PPF ↟ CPAHC: Others
CP ↟ ROC ↓
AHC ↟ FB ↓
RC ↓ RFB ↓
MNC ↟ NHC ↓
No
SPA ↓
need
SPI ↓
to
UFP ↓ Canvassing
canvas
SQPH ↓ is must

CP ↓
RFR ↓
LC ↓

↓ Disagree ↑ Agree ↟ Strongly Agree

4. CONCLUSIONS
The average life expectancy of human being increases due to technology improvements and sophistication
in public health, nutrition and medicine. The present article identifies key factors that influence the
purchase intention (or) continuance of health insurance policy. The three variables which are chosen for
the present study namely health insurance products, services rendered by health insurance providers and
the perceptions on health insurance were positively and significantly influencing the purchase intention
(or) continuance of health insurance policy. Out of the four moderator variables (gender, age, income,
education) selected for the present study, only the gender moderates the relationship between health
insurance products, perception and the purchase intention of health insurance policy. Female respondents

International Journal of Economic Research 10

 Factors Influencing the Purchase Intention of Health Insurance Policy-An Empirical Study in Malaysia

in Malaysia have given high preference on the purchase intention of health insurance policy. The present
articles identifies four important groups of respondents using non–linear canonical correlation analysis
and are classified as highly favorable group, satisfied group, enjoying group and non–favorable group. The
employed females in the salary range of RM2000–RM6000, favor health insurance due to self–protection
to avoid catastrophic health expenditure and to overcome insecurity feelings on their family welfare. Unlike
life insurance, health insurance policy is a short time investment and therefore socio–demographic factors
such as income, education and age are not found to be significant on the purchase intention of health
insurance policy. The customers take the purchase decision on their own and they are not influenced by
family members, friends, relatives and colleagues. There are many complaints from customers on the
notice of renewal date that they did not receive on time and simultaneously they discontinue the policy.
This will cause inconvenience to the customers because with the expired policy, customers are not able
to use the medical card and need to reinstate the policy which takes 30 days in queue. Customers express
their concerns on the high premium of the health insurance and no returns they receive at the end if they
are not hospitalized during the stipulated time of the policy. In order to sustain health insurance business
and to make customers remain in the scheme, insurance companies must enhance the fringe benefits /
bonus from the existing 10% to 20% if no hospital claims are made in the previous year. The insurance
providers may think of developing a rural health scheme to cater to the needs of poor and rural mass. The
health insurance agencies may focus on new product innovation like micro–insurance or pro–active loss
control services and analytical decision–making techniques to make more effective marketing. Further,
they have to expand their product segment by widening their capabilities such as understanding customer
needs and wants, broadening product portfolio, capital, diverse talents, and more interesting products to
attract customers.

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