Standalone health insurance firms gain market share

In the health insurance market, standalone health insurers have gained ground while private general insurance companies have seen their share dip over the past few years.

This segment is dominated by public sector general insurance companies, with about two-thirds of the market share.

Private general insurers, which offer products such as fire, motor and others along with health, accounted for much of the remaining part of the market five years ago.

But standalone private sector health insurance companies have been growing faster than other general insurance players.

In 2015-16, gross health insurance premium collected by all companies stood at ₹24,448 crore, a a 22 per cent increase over the ₹20,096 crore collected in the previous fiscal. This was the highest growth in the past five years.

But the share of private sector general insurers in total health premium declined to 20 per cent (₹4,911 crore) in 2015-16 from 27 per cent (₹3,445 crore) in 2011-12, while the share of standalone health insurers moved up to 16 per cent (₹3,946 crore) from 12 per cent (₹1,609 crore) during this period.

The share of public sector general insurers increased to 64 per cent (₹15,591 crore) from 61 per cent (₹8,015 crore). Standalone firms were successful in penetrating the individual segment (individuals and families) with their differentiated and innovative health policies, say industry players.

“Standalone players are focussing only in one line of business, and hence they are constantly innovating to attract customers’ attention and ring-fence existing customers,” according to Irvinder Singh Lail, Director – Financial Services, Advisory, at EY India.

V Jagannathan, Chairman and Managing Director of Star Health Insurance and Allied Insurance, felt that creating need-based products and providing cover for ongoing treatment for life-threatening diseases were some of the key differentiators of standalone firms like Star.

On the back of strong growth, underwriting losses of standalone health firms have decreased to ₹273 crore in 2015-16 from ₹611 crore in 2014-15.

Responding to private general insurance firms’ declining market share in health, Sanjay Datta, Chief – Underwriting & Claims, ICICI Lombard General Insurance Company, top player in the private category, said: “For a non-life insurer like us, we have different product segments and growth patterns are also different. So, it is a question of balancing the portfolios based on growth potential. We have to manage a mix, but standalones don’t have to.”

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