Health Insurance Premium collection is touching Rs. 129863 crores in 2024-2025

Few years back (2007-2011) we were very enthusiastic about the growth of Health Insurance portfolio. This was especially true during 2007-08, when this portfolio grew by 59.20%. Let us look at the growth figures in the recent year.

We have drawn graph showing the % growth YOY and, it shows that yearly growth figure in % terms is stagnating for last 4 years around 22%. Even at 20.60% for the current year (31 March 2025) we foresee this figure in money terms and will touch Rs 129863 Crores.

Graph Showing % Growth Year Over Year

Graph Showing Growth in Premium

Premium increase by insurers, increase in healthcare costs, stock market meltdown (February 2025) is guiding us towards customer resistance and experts have started talking about fall in percentage (%) growth of health insurance premium.

Let us try to make projections for next 6 years.

We have done this with growth rate of 12%, 20%, 30% & 60%.

Growth Chart if Premium Increases at Varying Rates

The survey of Research & Analysis Wing of Insurance Foundation of India revealed that top most wish of every individual is that- “He should have good health”. No one wishes to have materialistic prosperity of the world with ill health. This wish will support the growth of health insurance industry in the years to come.

If someone asks me- What should be the growth in health insurance premium with which I will be happy? - I will say it should not be 30 % gross but it should be 30 % net (as we have to discount for inflation of 7 % per annum in normal costs and 20 % per annum in health care costs). Let us not be satisfied with meager growth of 12 % or 20 % let us aim for growth of 30 %.

It means we should have growth of 30% year over year and then the figure will touch Rs. 519755 crores by 2029-30. Let us be clear that Health Insurance portfolio of Indian Non-Life Insurance will be No. 1 portfolio for years to come.

Market Share Wise 5 Big Insurers - Health Insurance for April - September, 2022 (6 Months)

Market Share Wise 5 Big Insurers - Health Insurance for April - September, 2022 (6 Months)

At the time of placing business corporates as well as individuals/ families are interested in knowing 5 big players for that portfolio.

We are giving list of 5 Big Insurers of Health Insurance.

Gross Premium booked by all companies is Rs. 43980 Crores.

Premium for Health Insurance – it will become possible to pay in instalments

Premium for Health Insurance - it will become  possible to pay in installments.

For last 6 years Insurance Foundation of India has been propagating that with a view to increase penetration of Health Insurance we should move away from compulsory yearly premium payment format to installments on the lines of Life Insurance premium which is :

1. Monthly
2. Quarterly
3. Half yearly
4. Yearly

IRDAI, the regulator has permitted general insurance companies or standalone health insurance companies to go ahead with installments format.

Implementation of the same will need few weeks of time as some changes in software are to be made. In near future we will see this being implemented and this will  bring relief to large number of policy holders, who might be feeling impact of reduced earnings due to Covid.

We are sure that penetration of Health Insurance will increase in the country. During 2020 21 we foresee health insurance premium to increase from Rs 50000 crores to Rs 70000 crores an increase of 40%

Health Insurance premium is going to be increased (may be 25%) in near future

Health Insurance premium is going to be increased (may be 25%) in near future

Due to various measures taken by IRDAI with respect to certain diseases, like mental disease being covered under Health Insurance policies there is need to increase the premium. We understand various insurance companies are submitting their updated products with higher premium rates. Indications are that increase may be as high as 25% Covid 19 has also added another dimension to this.

It is suggested to those who have to renew the policy - do it as soon as possible. Those who wish to buy health Insurance -buy it at the earliest. It will be a good idea to buy a policy for 2 years or may be 3 years so that you can have effective saving.

How to control Passive Smokers?

Should Health Insurance Premium be adjusted?

Sometimes you come across interesting facts in publications. Economics Times Wealth August 18-24, 2013 has carried the following information

56% is the difference between the premium of a smoker and a non-smoker for a life insurance policy. The question before us is:

 

If Life Insurance Industry penalizes a person by 56% then what is the figure for Health Insurance? Why not penalize family members / colleagues who are passive smokers and are being compelled to smoke? May be this will result in reduction of smokers in our country.

Few days are left for making Significant Savings in Health Insurance Premium

On April 1, 2012 the service tax on health insurance premium would increase to 12.36% from the existing rate of 10.30%. It means that you have to pay a higher premium. For example if you pay a premium of Rs. 20,000/- for the health insurance premium, this is how you will be impacted:

Let us take elaborate this example. Total premium payable during this 2 years period is Rs 44,532 (Rs. 22060 + Rs. 22472) assuming that you decide to buy it before April 1, 2012.

It will be much better for you to go in for 2 years policy being offered by certain Insurance companies by giving discount of 7.5%.

From the above example you can see that you will be able to save Rs 3,721 on the 2^nd year premium which is equal to 16.87% whereas banks FD for the same duration would not give you more than 6%-7% returns.

Portability of health insurance

As predicted by us vanilla product will be introduced by all general insurance / health insurance companies in near future as the product details are being sent to IRDA. New health insurance product to be sold by all companies will have following features:

•Max sum assured – Rs 2 Lakhs only

•Preexisting diseases will be covered after 4 years

•Max entry age will be 65 years

•No claim bonus – Reduced premium or increased sum assured will be given. Companies like Oriental will have to change their policy of not giving benefit to the customers as far as this policy is concerned.

•Indicative premium for Rs 1 Lakh – up to age 18 years will be Rs 1000, which means that we are sticking to existing rates. We can expect Rs 1400 for someone who is in the 18 -35 age bracket.

•To be introduced by all companies. We feel Max Bupa may not come out with this product. Let us see what will be the stand of Regulator (IRDA) with respect to this-will Max Bupa be asked to introduce this product ?

Let us see what is the ultimate outcome when the product is introduced?

Our suggestion :

Let all the companies come out with a joint advertising campaign –explain benefits of having health insurance. We should aim for 10 crores policies to be sold under this category. With an average policy size of Rs 2500 this should mean premium of Rs. 25000 crores.

Health Insurance is an important part of Indian Insurance market

Health Insurance is an important part of Indian Insurance market and it portfolio which growing at the highest rate. Therefore various proposals are under consideration at different levels with IRDA, Insurance Companies, Government Agencies & Corporate bodies. According to newspaper reports some of these are:-

17 General Insurance Companies and 3 Health Insurance companies are at present selling health insurance. During 2009-10 premium figure is estimated to have touched Rs. 8100 crores.

(1)- Number of stand alone Health Insurance companies is increasing at a slow pace. Star Health was the first health insurance co and it was followed by Apollo Munich which started operations in August 2007. Max Bupa has started operations in April 2010. Religare is planning to start operations in near future but without any foreign partner.

(2)- In view of increase in medication as well as health care costs the sum assured limit of Rs. 5,00,000 has been steadily increasing and now many companies are issuing policy of Rs, 10,00,000. Max Bupa has introduced a product where even a policy of Rs, 50, 00,000. can be issued and that too to a person of 80 years. It is a good charge.

(3)- More and more life Insurance Companies are now selling Health Plans –which is a combination of Health Insurance and Mutual fund. It is foreseen that SEBI view on Mutual fund will have impact on this product also.

(4)- Hospitals / Pharma Co’s may become promoters / investors in health insurance companies. It may result in better healthcare management as resources can be effectively utilized for the welfare of the society. But reach can be limited as India is a very large country. Contribution of 3 large corporates Max, Fortis & Apollo will be merely a symbolic thing.

(5)- Our projections are that by 2015 Health Insurance premium will touch Rs, 35,000 crores and by 2025 it will be Rs, 4,00,000 crore industry.

(6)- Concept of Co pay or co payment will get strengthened year by year and we foresee it will be introduced for all type of health insurance polices by 2013.

(7)- RSBY has become a success. More and more states will introduce this and coverage of those who are BOP (Below the poverty line) and are in unorganized sector will increase.

(8)- In 8 to 10 years most of the General Insurance companies in India will withdraw from Health Insurance scene as they will not be able to cope up with losses and we will see more and more stand alone Health Insurance Companies entering the field and they will become stronger year by year. Their number will also increase as Government may:

- Permit 100% foreign ownership in stand alone Health Insurance companies in near future.
- Reduce equity requirement for Health Insurance Companies at Rs 50 crores (instead of Rs 100 crores at present).

(9)- General Insurance Companies will consider setting up of 100% owned Health Insurance Companies as subsidiary companies. Reliance General may make the beginning by setting up Reliance Health Insurance.

(10)- Mergers & Acquisition will start in Indian Insurance industry and in 2011 (may be in 2010) we will see firms like Royal Sundaram getting merged with Reliance General Insurance.

At present (2009-10) Private insurance players are having market share of 40% in health insurance. Their market share has increased from 12 per cent in 2003-04 to 40.00% during this year. The market share of public sector companies has come down to 60%, which was expected by us as well as predicted on our website. We foresee 4 PSU’s may set up 1 strong Health Insurance Company as a stand alone company to face competition. They may also go in for 1 stand alone TPA fully owned by them.

Star Health has become No. 4 company as far as Health Insurance is concerned. They have beaten National Insurance.

(11)- Some of the small TPA’s may exit the scene as they will find business to be unviable as more and more insurance companies will go in for in house processing of claims.