India: COVID fears fan health insurance business
Source: Asia Insurance Review | Jun 2022
While health insurance premiums totalling INR585.72bn ($7.56bn) were collected by insurers in the financial year ended 31 March 2021 (FY2021), the figure jumped by 25% to INR73.33bn in FY2022, according to a paper prepared by the National Insurance Academy under the finance ministry.
The paper titled Health Insurance in 2042: Challenges and Opportunities, was released on 10 May at a conference on digital health and insurance organised by the Progress, Harmony and Development Chamber of Commerce and Industry. The paper notes that the health insurance market in India had been growing steadily at around a compound annual growth rate of 24% but grew at nearly 34% in the COVID-19 pandemic period.
This is attributed to the rush by people to protect themselves and their families from catastrophic out-of-pocket medical expenses arising from the pandemic as well as increases in premium rates.
Another reason for the growth is the increased coverage of people under government-sponsored health insurance schemes. For instance, Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), launched in 2018, covers nearly 500m individuals (40% of the population) in the country, the paper points out.
In addition, nearly 20% of the population is covered by state or social insurance schemes. The Employee State Insurance Scheme covers nearly 136m employees, followed by various state insurance schemes that cover nearly 124m individuals who are mostly from the economically weaker bracket (below the poverty line and unorganised sector). A