The growth of health insurance premium has become significantly dull after Kovid reaches a record high level during the year of Kovid. Demand from retail customers has become sluggish due to decrease in the capacity of purchasing insurance policy. Also, there has been a sharp decline in premiums of government -backed schemes. The change in accounting criteria by the regulator since October last year has also huge impact on the premium increase in the health sector.
The CEO of a General Insurance, a private sector General Insurance, said, “Health insurance demand has decreased. After Kovid-19, people were selling health insurance policies significantly for the last 2-3 years. Now we feel that the growth will be normal because the capacity to buy policy and the growing economic situation has affected the region. Health insurance rates are low in corporate terms. The increase in health insurance sector is dependent on new ideas, new policies, innovation. ‘
According to the data of the General Insurance Council, the health insurance premium has increased by 10.44 percent in FY 2025 compared to the same period last year during the April-January period. The same period last year recorded a 20.79 percent increase on an annual basis.
Similarly, the increase in premium of health segment in the same period of FY 2023 was around 23.57 percent, while the growth rate during April-January 2022 was 25.89 percent.
According to a private sector insurance officer, the increased demand for health insurance after Kovid-19 has now started decreasing. He said, ‘Earlier new people were coming to buy insurance policies, due to which the premium increased. Now its growth has been affected due to lack of ability to buy policies. The premium was increasing due to retail health insurance sector. The premium has increased due to the increased expenditure of the hospital and due to this we are not able to reduce the premium.
Retail health insurance premium growth rate has decreased, which is important in the health segment. During April-January in FY 2025, the retail health insurance premium has increased by 13.51 percent on an annual basis, compared to 19.04 percent during the April 2024 during April-January. Similarly, in April-January 2024, health insurance premiums increased by 15.07 percent, while during April-January 2022, there was a 17.28 percent increase.
Siddharth Singhal, a health insurance head of the policy market, said, ‘Retail health insurance growth has been better like the years after Kovid epidemic. The average sum insured including the top-up was around Rs 17 to 18 lakhs in FY 2024, which was about 6 to 7 lakh rupees before the epidemic. However, in terms of traditional policies, the average insured amount has increased from Rs 4 lakh to Rs 10 lakh.
Anil Gupta, a group head and senior vice president of Financial Sector Ratings in Ecra, said that the new audit standards have affected the insurance segment. 15 percent of policies in health insurance policies are several years of policies, which have been affected.
First Published – March 2, 2025 | 10:21 pm IST