Increasing consumer awareness on health, rising healthcare costs, drop in sales of new business for life insurance companies and the recent lifting of price controls in the non-life insurance industry have resulted in insurers focusing aggressively on health insurance to drive growth.
A look at the weighted received premium (WRP) that takes into account 10 per cent of single premium and 100 per cent of regular premium shows that the new business premium for health insurance has grown by 290 per cent to Rs 217.2 crore from April to December 2008, compared to a new business of Rs 55.6 crore in April to December 2007.
LIC that entered the health insurance space 13 months ago has sold 2 lakh policies and has collected Rs 200 crore of new business premium and is planning to launch some more products this year.
ICICI Prudential Life Insurance has seen 20 per cent of its total incremental number of policies coming from health insurance. “The two strategies our company has used to beat the impact of market volatility on our business are offering Return Guarantees on our products and to offer health insurance products,” said Binay Agarwala, head, health business at ICICI Prudential Life.
Non-life insurance companies too are focusing on health insurance and motor business to beat the impact of detariffing. “Health portfolio has grown fastest by 30 per cent for us at Rs 900 crore which is 21 per cent of our gross premium for 2008-09,” said G Srinivasan, CMD, United India Insurance.
For the non-life insurance industry, the health premium income during April to December 2008 has grown the fastest compared to other segments such as motor, fire and marine insurance. The gross premium underwritten during April to December 2008 grew by 28 per cent to Rs 4,558.9 crore compared to Rs 3,558.8 crore during April to December 2007. During the last six years, the premium from health insurance products has grown from Rs 675 crore in 2001-02 to Rs 5,100 crore in 2007-08.