In a thumbs-up to the government’s ambitious health insurance scheme, global ratings agency Moody’s on Thursday said it will be credit positive for insurers as it will help grow health premiums and provide insurers with cross-selling and servicing opportunities.

However, since 23 of 29 states have chosen to run the scheme as a trust model, prospects of insurers’ growth is lower, it added.

“We still expect that insurers with scale advantages and track records of managing large insurance schemes will benefit from the health programme. Additionally, the programme will provide these insurers with opportunities to cross-sell other products and services to this new customer base,” it said in a release.

Due to the trust model, the agency expects that health insurance premiums will increase but only by about Rs 10,000 crore for the additional coverage to 10 crore families. “This is much lower than the current Rs 30,400 crore of coverage for 44 crore,” it added.

Health insurance contributes around 23 per cent of general insurance premiums and is one of insurers’ main growth drivers. Health premiums have grown at a compound annual growth rate of 18 per cent during fiscal 2012-17 (fiscal years end 31 March).

During his Independence Day speech on August 15, Prime Minister Narendra Modi had announced Pradhan Mantri Jan Arogya Abhiyaan, also known as Ayushman Bharat or the National Health Protection Mission (AB-NHPM), which will be launched on September 25 to provide Rs 5 lakh health insurance cover to families every year.

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