The health insurance business in India saw its best year ever in the last fiscal year ended 31 March 2017 when premiums surged by 24% year-on-year to INR307.65 billion (US$4.8 billion) for 2016-17, according to data from IRDAI.
In the last three years, the sector — which contributes 24% of the general insurance industry — has been on a high-growth curve. Growth rates were 22.4% in 2015-16 and 15.6% in 2014-15.
Industry players say that the main reason that people are buying more insurance is medical inflation. The cost of medical treatment is growing 10-15% year-on-year in India, reported Times of India.
Mr Puneet Sahni, Head (Product development) at SBI General Insurance, said: "Another reason for growth is that salaried employees find that their corporate group health cover does not cover all ailments. To cope with rising medical expenses, working class individuals are going for individual health covers or top-ups on existing corporate group mediclaim policies."
Where the different categories of players are concerned, standalone health insurers are witnessing rapid growth of around 20%-50%, ahead of private insurers growing at just over 15% and the four state-owned general insurers at 23%. Star Health Insurance, which has the largest portfolio among standalone insurers of INR28.7 billion in terms of GWP in 2016-17, saw 47% growth year-on-year in FY2016-17.
The combined premiums of the four standalone insurers are almost equivalent to the total premiums of the 18 privately held general insurers. For 2016-17, the four standalone companies booked premiums of INR55.94 billion, just short of the combined health insurance premium INR61.06 billion of the 18 private sector nonlife insurers. The public sector insurers retained their lead with INR190.64 billion in health insurance premiums.