As healthcare costs escalate, retail health insurance premiums in India witness a notable uptick, driven by soaring medical inflation and heightened demand for comprehensive coverage among policyholders.
Data from online insurance broker PolicyBazaar reveals a significant surge in the average ticket size of retail health insurance, climbing by nearly 48% over six years to reach Rs 26,533 in FY24. Factors contributing to this surge include elevated medical inflation, which stands at around 14-15%, and increased awareness of health insurance post the Covid-19 pandemic.
Siddharth Singhal, Business Head of Health Insurance at PolicyBazaar, attributes the rise in average ticket size to both medical inflation and the growing preference for longer-term policies, providing extended coverage.
According to a recent report by insurtech Plum, India’s medical inflation has hit 14%, placing financial strain on individuals responsible for their healthcare expenses.
Bhaskar Nerurkar, Head of the Health Administration Team at Bajaj Allianz General, points out that factors such as rising healthcare service costs, introduction of new technologies, increased utilization of healthcare services, and an aging population contribute to higher insurance premiums.
Dhirendra Mahyavanshi, CEO and Co-Founder of Turtlemint, notes a trend of customers opting for health insurance plans with higher coverage post the Covid-19 pandemic, driven by increased awareness of the financial implications of unexpected health issues.
In response to growing awareness, health insurers are introducing offerings with higher sum insured, ranging from Rs 2 crore to Rs 5 crore, as well as unlimited sum insured plans, enabling individuals to access high-end medical treatments without financial constraints.
Rakesh Jain, CEO of Reliance General, highlights a significant increase in the average sum insured, indicating a shift towards higher coverage plans among consumers.
Health insurance has overtaken motor insurance in terms of market share, reflecting its dominance in the overall Gross Direct Premium Underwritten (GDPI) of non-life insurers. Insurers anticipate a moderation in premium rates with favorable regulations aimed at reducing fraud and increasing transparency.
Parthanil Ghosh, President Retail Business at HDFC ERGO General Insurance, emphasizes the potential for premium rate moderation through initiatives like Cashless Everywhere, contingent on sustained growth in the number of individual policyholders.
