Health insurance premiums drive non-life industry growth, shows data

Group premiums grew 30% against 17% growth in retail segment

Health insurance premiums reported a growth of 26 per cent in the first 10 months of FY22. This is nearly double the growth witnessed in the same period a year ago. Health premiums continued the trend of driving growth of the non-life industry ever since the pandemic began.

However, within the health segment, the growth dynamics has changed with group health premiums growing faster than retail health premiums, data of the General Insurance Council showed. 

In FY22 so far, group health premiums witnessed a growth of 30 per cent as against 17.28 per cent growth in retail health. 

Also, the share of group health in the health business of the non-life industry stood at 51 per cent against 39 per cent in the case of retail health.

The monoline standalone health insurers witnessed a 36 per cent growth in health premiums in FY22 so far. Retail health premiums grew by 30 per cent and group health premiums saw 60 per cent growth, albeit on a low base in FY22. 

On the other hand, general insurers, who have other lines of business apart from health, witnessed a 22 per cent growth in health premiums upto January 2022, driven mainly by group health premiums.

Sanjay Datta, chief — underwriting, claims, reinsurance & actuarial — ICICI Lombard General Insurance, said, “Group health premiums have been growing, given hiring has picked up across the board, especially in the IT sector. Corporates are increasing the limits on their policy and some price correction has also happened. Group health growth is a function of the economy. On the other hand, retail health growth is organic and depends on the awareness and needs of individuals. While the demand for retail health products has always been there, it spiked during the pandemic and is expected to normalise, going forward.”

The demand for health insurance products spiked during the pandemic because of heightened awareness among the people.

In FY21, health insurance premiums grew by 13.3 per cent with retail health premiums witnessing a growth of 22 per cent. But group health had contracted by 3 per cent in the same period.

Health, as a segment, has become the biggest business for insurers in the non-life insurance space. In FY22 (so far), the health segment constituted 33.34 per cent of the non-life insurers business while motor business constituted 30.89 per cent. In FY21, the health segment constituted almost 30 per cent of the non-life insurers business while the motor segment constituted 34.1 per cent.

The non-life insurance industry reported a five-month high growth rate of 15.9 per cent in January 2022 and was nearly 2.5 times the rate reported in January 2021. And, in FY22 so far, the non-life insurers reported a 11.6 per cent growth to Rs 1.82 trillion.

Motor insurance premiums grew by 3.47 per cent in FY22 so far. Among other large segments, while crop insurance premiums have contracted by 2.3 per cent, fire insurance premiums have grown by 7.6 per cent in the same period.

“Non-life premiums are expected to be driven by continued uptick in the health segment even on a higher base (given that Covid is continuing), and enhanced digital solutions complemented by offline offerings,” said Care Edge, in its research report.