June 20, 2019 3:50:45 am
HDFC Chairman Deepak Parekh on Wednesday said health insurance is expected to emerge as the largest segment in the insurance segment, overtaking motor insurance, which is currently the largest portfolio for non-life insurers.
“In the general insurance space, it is expected that the share of accident and health insurance will rise from 30 per cent currently to 39 per cent in the next five years. This growth means that accident and health will have a larger share and overtake motor insurance which currently accounts for the largest component in general insurance,” Parekh said while announcing the HDFC takeover of Apollo Munich Health Insurance. “Accident and health is currently the fastest growing segment in the non-life insurance sector. The share of accident and health has increased from 9 per cent in FY 2001 to 30 per cent in FY 2019,” Parekh said.
According to Parekh, there is a huge opportunity to reach out to more individuals to get them a health insurance policy. “Fortunately, there is a changing mindset where people are beginning to recognise that health insurance should not be construed as an expense, but as a necessity and as an investment to safeguard their future,” he said. An estimated 42 crore individuals have health insurance, which includes government and corporate schemes. But when these schemes are stripped out, only 3.3 crore individuals have a retail health policy, Parekh said.
“Not surprisingly, India’s health expenditure which is the sum of public and private expenditure is under 4 per cent of GDP compared to a global average of 10 per cent. If one looks at many western countries,the spend on healthcare is predominantly by the public sector or through insurance,” he said.
In India, public health & insurance expenditure accounts for one-third, while an overwhelming two-thirds is met by out-of-pocket expenditure, where the individual consumer bears the cost of his or her own healthcare. In the global context, out- of -pocket expenditure stands at only 18 per cent, he said. “Against backdrop of rising life expectancy and high out-of-pocket expenses, it is clear that the potential for growth in health insurance is immense,” he said.
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