The pandemic accelerated topline growth in health insurance, and it is now seen as a significant financial tool
The general insurance council (GI Council) released segment-wise gross direct premium income (GDPI) data of the Indian general insurance (GI) industry for the month of September 2021 and YTD FY22. The health segment continued to deliver strong growth (29% year-on-year for YTD FY22; 17% y-o-y in September 21) on a relatively stronger base, offsetting sluggish growth in the motor segment (4% y-o-y) for YTD FY22; 1% y-o-y in September 21). Overall GDPI grew 12% y-o-y for YTD FY22 but declined by 2.8% y-o-y in September 21.
Overall GDPI for the industry stood at Rs 1,087 billion for YTD FY22 vs. Rs 968 bn in the previous year.
Health and personal accident
For YTD FY22, the Indian GI industry posted impressive 12.3% y-o-y GDPI growth, aided by 28.8% growth in the health segment and a strong growth of 84.7% in a relatively smaller segment, personal accident. The motor segment remained a drag on overall GDPI growth, registering a sluggish 4.4% y-o-y growth for YTD FY22, despite having a favourable low base advantage. This diverging growth in motor and health segments led to strong 37.6% y-o-y growth for standalone health insurers (SAHIs), while muted 12.3% growth for private multi line insurers and 8.1% growth for the PSU multiline insurers in overall GDPI for YTD FY22.
Strong growth in the health segment and muted growth in motor mean that health-focused stand alone health insurers (SAHIs) are delivering strong growth and increasing their market share, whereas multiline insurers (private and PSU) continue to face challenges.
Health segment pricing
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. In India, structural growth has been the key driver for the health insurance business for a long time, with an exceptionally high share of out-of-pocket expenditure, poor state of government health facilities and rising affluence among the masses. The pandemic accelerated the topline growth in health insurance, driven by a combination of factors and it is now seen as a significant financial tool.
An increase in the number of people (retail and group) opting for health insurance, demand for better coverage among existing policyholders, demand for short-term Covid-19 health cover and increased claims costs driving price hikes have resulted in very strong growth in premiums. For YTD FY22, the group health segment saw 36.7% y-o-y growth, whereas retail health saw 17.9% y-o-y growth. For September 21, retail health premiums grew at 2% y-o-y.
Edited extracts from Emkay insurance sector report
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