The health insurance industry in the country experienced 40 per cent growth and covered 10 million people in 2002-03, with the total premium being collected by companies in the sector in the same period being Rs 1,045 crore. The premium figure was Rs 750 in the previous year.
The Rs 100 crore entry capital plus risk-based solvency norms means that the business has to grow at 5 per cent for 15 years to break even.
These calculations were based on the assumption that the sector would see doubling of existing premia and a starting claim ratio of 90 per cent reducing to 85 per cent in 5 years.
A typical viable health insurer will have 3 per cent operating margin after claims settlement, marketing and administrative expenses.
In India the picture is a little different with 120 per cent to 130 per cent claim ratio making the business less attractive.
