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India’s insurance story is moving from coverage to care
This article is authored by Dr Ashish Panghal, partner, Enira Consulting.
Health insurance sector is widely seen as a growth engine — and the numbers support that view. Premiums crossed ₹90,000 crore in FY24, growing at over 18% CAGR over the past five years. Digital distribution is expanding, regulatory support is active, and consumer demand is rising, particularly after the Covid-19 pandemic.
But the model powering this growth is deeply flawed. Loss ratios in group and retail health insurance have breached 100%, indicating that insurers are paying out more in claims than they earn in premiums. Meanwhile, the system continues to overlook what consumers actually need: Affordable, accessible everyday care.
Over 65% of India’s out-of-pocket health spending is for outpatient visits, diagnostics, medication, and chronic condition management. Most health insurance products don’t cover these — they’re designed to respond only when a hospitalisation occurs. This mismatch between insurance design and real-world behaviour is not only a pain point for consumers — it’s also becoming a weak spot in the investment thesis.
What India needs isn’t more coverage — it’s continuity. And that’s exactly what a new generation of health care platforms is building.
Over the last 24 months, we’ve seen the rise of full-stack care orchestration models that begin with primary care and extend all the way through to claims support. These platforms operate physical or hybrid clinics, provide diagnostics and teleconsultations, and integrate tech-enabled follow-up with risk-pooling mechanisms.
This is a far cry from the old broker-led model. What’s evolving now are health ecosystems — service platforms that offer a combination of in-house care delivery, engagement tools, preventive health programmes, and embedded insurance. Rather than intervening only at the moment of crisis, they guide the user across the full health journey, intervening early and often.
The economic logic is strong: by managing care upstream, these platforms reduce hospitalisations, control costs, and generate longitudinal data that can power personalized, AI-led risk scoring.
his shift is mirrored in capital flows. There is a clear VC and growth equity pivot away from pure aggregators and transactional policy sellers toward platforms that blend care delivery, financing, and data under a single operating model.
Recent funding rounds in the $20–$35 million range are going to companies that control both sides of the equation — the care and the cover. These aren’t healthtech in the narrow sense; they’re integrated operating systems for primary, secondary, and preventive care.
Why? Because these models solve multiple pain points in one go:
- They offer predictable subscription revenues rather than low-margin, one-off commissions.
- They deliver user engagement throughout the year, not just at renewal.
- They gather clinical and behavioural data, enabling dynamic pricing and better actuarial accuracy.
- And they can scale into Tier 2–6 geographies, where traditional insurance penetration remains low.
Perhaps the most underappreciated shift is the growing demand for non-hospital health solutions. Consumers — especially younger and semi-urban segments — aren’t waiting for emergencies. They’re seeking proactive, convenient, and affordable care: Virtual consults, chronic condition monitoring, behavioural health support, and diagnostics.
Insurance-adjacent models that package OPD access, wellness services, and basic financial protection are gaining early traction. Some of these are delivered through employer channels, others directly to consumers. Either way, they reflect a new understanding: value lies not in the insurance paperwork, but in the user experience of staying healthy.
These solutions also align with the cost-control interests of insurers. If care is managed effectively upstream, catastrophic events downstream are fewer. For investors, this creates a new opportunity zone — one where capital can back both health outcomes and financial returns.
Perhaps the biggest unlock, however, lies in India’s “missing middle” — nearly 500 million Indians who are neither covered by government schemes like Ayushman Bharat nor by private, corporate health insurance.
This segment is underserved not only in insurance but also in access to regular, affordable care. For them, the challenge is not just affordability — it's continuity, context, and trust.
Innovative platforms are stepping in with models that combine village-level screening, vernacular digital interfaces, trained community health workers, and risk-stratified bundled plans. These offerings move the conversation away from high-cost hospitals and toward low-cost, high-frequency care — made more powerful by embedded financing that protects users without the friction of claims paperwork.
The total addressable market for these care-first models could cross ₹4 lakh crore by 2030 if scaled effectively. And with improving smartphone penetration, UPI integration, and policy digitization through ABDM, these platforms are no longer constrained by infrastructure alone.
The Emerging Playbook for Health Investors
For investors evaluating the next phase of India’s healthcare evolution, the winning playbook is becoming clearer. It’s not about underwriting hospitalization. It’s about orchestrating health.
This isn’t just a healthcare innovation — it’s a new infrastructure category emerging at the intersection of healthtech, fintech, and primary care.
A New Health Economy Is Emerging — One Visit at a Time
What India is building today is not just a more digitized insurance sector. It is a restructured health economy, where care is accessible, costs are predictable, and risk is shared long before hospitalization happens.
The most valuable health businesses of the next decade in India will not be those that simply sell coverage. They will be the ones that blend care delivery, real-time engagement, and risk protection into a seamless experience — particularly for those previously ignored by the system.
The next frontier in Indian health is not in selling more policies. It is in delivering better health — affordably, continuously, and everywhere.
This article is authored by Dr Ashish Panghal, partner, Enira Consulting.
