The country’s health insurance segment is perhaps one of the biggest gainers of the Covid-19 pandemic with both awareness and demand on a steady rise. However, a hike in premium and easing concerns about the pandemic could impact sales going ahead.
Starting October, a number of insurers have hiked health insurance premium rates by around 20 per cent, citing wider coverage and benefits. Higher claims due to Covid as well as rising medical costs are also reasons for the higher premium.
“A few companies have increased rates by at least 10 to 15 per cent. It will definitely make people rethink about purchasing a Mediclaim policy, but eventually, they will have to buy at the prices prevailing in the market,” said Rakesh Goyal, Director, Probus Insurance.
A bigger challenge to sales, according to him, is that people are now getting used to living with Covid-19, which has to some extent made them less fearful.
“Since fear of the pandemic is low, the health insurance numbers for October may not be as high. The month-on-month momentum may go down,” he noted but said compared to February, there has been a huge rise in sales of health insurance policies.
“During the pandemic, there is a growing fear among the public resulting in accelerated growth of health insurance. People are in real need of financial support for health in the current scenario. Hence, we have decided not to increase premium for this fiscal,” said Dr S Prakash, Managing Director, Star Health Insurance.
Doube-digit growth
IRDAI data revealed health insurance continued to see double-digit growth in September even as overall non-life insurance figures remained in contraction at 4.4 per cent.
Standalone health insurers saw even more robust growth of 37.9 per cent growth in gross direct premium income(GDPI) in September 2020 with ₹1,542 crore as against ₹1,118.25 crore a year ago.
For the industry as a whole, the GDPI for health insurance grew 15.8 per cent to ₹28,804.58 crore between April and September this year from ₹24,864.41 crore a year ago, according to data compiled by the General Insurance Council.
It now commands the largest market share in the non-life insurance business at 29.7 per cent, pushing motor insurance to the second spot.
Insurers say those who can afford to prefer to buy comprehensive health insurance covers, while those in the lower income categories are going in for the cheaper Corona Rakshak and Corona Kavach products. But for higher sum assured, getting a medical test is still challenging, as people avoid visiting hospitals and labs.
In the health portfolio, GDPI for retail health products grew at the fastest pace in the first six months of the fiscal at 34.32 per cent and has a market share of 41.41 per cent.
Group health insurance products continued to enjoy the dominant market share at 51.83 per cent but they grew 15.66 per cent between April and September this fiscal.