Covid pandemic has proved to be a boon for insurance companies. With people increasingly taking health cover to meet medical expenses, general insurance companies have reported a 29.81 per cent rise in premium income from the health segment to Rs 42,571 crore during the seven-month period ended October 2021.
This is almost double the growth of 14.3 per cent at Rs 32,796 crore witnessed in the same period of last year, when people spent most of the time indoors under a nationwide lockdown. Health premium income shot up by a record 34 per cent to Rs 5,463 crore in the month of October alone, according to figures released by insurance regulator IRDAI.
Industry sources say that demand from the retail segment is rising at a faster pace as demand for individual health policies is rising rapidly. The premium growth of standalone health insurers continues to be higher than industry average, indicating that retail premiums are growing faster than the group business as the standalone health insurers derive most of their premiums from the retail segment. Standalone health players reported a 37.85 per cent rise in premium income at Rs 10,500 crore during the 7-month period.
The rapid rise in health policies is being led by public sector New India Assurance which reported a 53.23 per cent rise in premium income to Rs 9,176 crore in seven months as against Rs 5,988 crore a year ago. The company reported a 135 per cent jump in premium income to Rs 1,327 crore in October alone, according to Irdai.
Overtaking motor insurance segment which was the top premium earning sector till last year, health insurance has been the main drivers of the non-life insurance industry since the commencement of the Covid-19 pandemic in early 2020. The health segment has increased its market share from 25.8 per cent last year to 33.7 per cent in the first seven months of FY22.
Simultaneously, health claims by customers have also shot up with all insurers reporting higher claims in the wake of Covid pandemic. ICICI Lombard General Insurance, for example, reported that the impact of Covid claims on health book in the first half of FY2022 was Rs 561 crore as against Rs 115 crore in the same period of last year. While Covid infections have declined in the country in the last a few weeks, insurance companies have reported 25.64 lakh claims for Rs 31,624 crore from people hit by Covid till September 2021. Maharashtra registered the maximum number of claims at 8.47 lakh for Rs 8,650 crore followed by Gujarat with 3.24 lakh claims for Rs 3,793 crore, Karnataka 2.53 lakh claims for Rs 2,712 crore and Tamil Nadu 2.41 lakh claims for Rs 3,447 crore. Although the average claim amount per person across the country was Rs 1.23 lakh, the average claim settled per person was Rs 91,287.
Although Covid-19, especially the second wave, was very damaging to the health insurance segment in terms of a big spike in claims, it accelerated growth for the segment. Insurers have also hiked the premium on health policies and started demanding even vaccination certificates and stringent medical check-ups before issuing new policies. “With Covid pandemic under control, claims are expected to come down in the near future. The segment will then become a profitable area for insurance firms. It remains to be seen how long the high growth in this segment will continue,” said an industry source.
The overall growth in the general insurance segment was 12.54 per cent at Rs 1.26 lakh crore during the seven months ended October 2021.