How is the Health Insurance Sector Performing in India?

Health is as vital as it is unpredictable. Years of disciplined lifestyle may get undone in a matter of few seconds due to some unforeseen health crisis. To make things worse, medical expenses have sky-rocketed and keep on increasing every other day. The best way to secure yourself and your family from such situations is important to have invested in a suitable health insurance plan. A prospective client, especially one who is about to invest in their first health insurance plan could be curious about the sector’s performance in India. Let us take a look at how the health insurance sector is performing in India.

• Growth and the factors aiding it:

The Union Finance Ministry had revealed that although in 2020-21, Rs 58,572 crore was collected as health insurance premiums by insurance companies, in 2021-22 this figure jumped to Rs 73,330 crore. A whopping 25% growth is a hallmark of great performance. The health insurance market in India is driven by a lot of factors. The cost of treatment is on the rise; shifting lifestyles and added stress from our jobs are contributors to many illnesses among Indians; salary from jobs has also increased comparatively. All of these are driving the health insurance market in India. India’s growing old population is another factor which is boosting the market.

• Government initiatives driving the performance:

The health insurance market is receiving a sufficient boost from the Government of India. Through its introduction of schemes like the Pradhan Mantri Jan Aarogya Yojana (PM-JAY), Ayushma Bharat Yojana, Pradhan Mantri Suraksha Bima Yojana, and Aam Aadmi Bima Yojana (AABY) it is providing health insurance to the economically weaker sections. Further, central government pensioners and officials are being provided with robust healthcare facilities under the Central Government Health Scheme (CGHS); boosting the performance of the health insurance sector in India. Strikingly, in November 2021, the Indian government signed an agreement with the World Bank for a project worth value US$ 40 million to transform Meghalaya’s healthcare facility, including the state’s health insurance programme.

• Private sector-induced performances:

Likewise, the private sector is further aiding the performance of the health insurance market in India. This can be seen in the fact that the private non-life insurance segment has a growth forecast of 16% in FY22 and 14% in FY23. Standalone health insurers are expecting a growth of over 25% in FY22 due to the increased focus on healthcare. The insurance regulatory body of India has eased the product approval norms for health insurance, thereby boosting the sector’s performance further.

• Scope of improvement:

One such aspect surrounding the performance of the health insurance market that needs improvement is the youth. The health insurance market has not yet been able to attract the younger people as it would have liked to. An entry age-based pricing could help the sector attract customers from this demography.

All these hints at a positive scenario within which prospective insurance policyholders will feel safe and secure to go ahead and get a robust health insurance plan. The performance of the health insurance sector is generally healthy and should inject confidence in prospective customers.