The COVID-19 pandemic has had a profound impact on various aspects of our lives, including our healthcare needs and priorities. One area that has witnessed significant changes is the insurance sector, particularly health insurance. According to recent data from the Insurance Regulatory and Development Authority of India (IRDAI), health insurance has been growing faster than motor policies since the pandemic began.
In September, the share of health covers in non-life insurance premium rose to 38%, up from 33% in March. This growth can be attributed to group policies, which have become increasingly popular. Before the pandemic, motor insurance held a larger share at 37%, while health insurance accounted for 27%. However, motor insurance’s share has dipped to 28% in September, indicating a shift in priorities.
Industry executives have pointed out that health insurance is now considered an irreversible employee benefit, despite the rising premiums. The cost of healthcare has been steadily increasing, necessitating higher coverage for individuals. As a result, employers are being compelled to offer more comprehensive health insurance policies to their employees.
The first half of FY24 (April-September 2023) saw a 14.9% increase in premium collected by the non-life insurance industry, totaling over Rs 1.4 lakh crore. This growth was primarily driven by health insurance, which saw a 24.4% increase in premium to Rs 54,713 crore compared to the previous year. Industry sources predict that the premium from health insurance will cross Rs 1 lakh crore this financial year, surpassing the Rs 90,667 crore recorded in FY23.
Group health insurance has seen a significant increase of 26.7% in premium to Rs 29,537 crore. This segment contributed to nearly 54% of health insurance premiums during the first half of 2023-24. On the other hand, premiums from individual policies grew at a slower rate of 18.4% to Rs 18,784 crore, accounting for 34% of health insurance premiums during April-September 2023.
Another noteworthy trend is the growth of the insurance-backed universal health insurance scheme offered by some state governments. This segment experienced a 35% increase, with the total premium rising to Rs 5,687 crore. This indicates that individuals are increasingly recognizing the importance of having adequate health coverage and seeking out government-supported options.
The COVID-19 pandemic has undoubtedly been a wake-up call for individuals and businesses alike. The need for comprehensive health insurance coverage has become more apparent, and this is reflected in the shifting trends within the insurance industry. As we navigate the post-pandemic world, health insurance is likely to remain a priority, both for individuals seeking financial protection against rising healthcare costs and for employers looking to attract and retain talent through attractive employee benefits packages.