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Standalone Health Insurance Market to touch Rs 20000 Crore by Year 2020

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Source: The New Indian Express
Dated: Oct 3rd, 2017

Standalone health insurers companies that focus on only one line of business are set to grow on the back of rising medical costs and heavy dependence on private medical care.


According to industry estimates, the sector would grow at the rate of 25% year-on- year over the next five years, with the market size growing up to Rs 20,000 crore.


Data available with the Insurance Regulatory and Development Authority of India (Irdai) show that the gross direct premium of all firms in the sector swelled from Rs 2,940 crore in 2014-15 to Rs 4,151 crore in 2015-16.


Of India’s 53-odd insurance companies, five are standalone health insurance players. These are Star Health and Allied Insurance, Apollo Munich Health Insurance, Max Bupa Health Insurance, Religare Health Insurance, and Cigna TTK.


“By 2020, the health insurance industry is expected to grow by 2x and exceed Rs 50,000 crore,” observed Ashish Mehrotra, MD and CEO, Max Bupa Health Insurance. He said he is hopeful that Max Bupa will cross Rs 1,299 crore, and double the current customer base of 2.4 million, by 2020.


Even with growing awareness, only around 27% of the population has some kind of health insurance. So, standalone health insurance players have the opportunity to serve the unsecured health market. Health insurance firms are working towards developing more innovative products that cater to the primary and tertiary healthcare financing needs of people, Mehrotra added.


A recent report by Mumbai-based finance and banking service advisory firm Fintelekt Advisory Services has found that the standalone health insurance market is likely to grow at a CAGR of 30% a year for the next five years; in the moderate growth scenario, the market is likely to grow at a CAGR of 16% a year for the next five years. In the former case, the size of the market will increase from Rs 5,859.7 crore in 2016-17 to Rs 21,904 crore by 2021-22. In the latter, it will grow to Rs 12,175 crore by 2021-22, the report states.


Arpita Bedekar, research director at Fintelekt, pointed out that standalone health insurance companies were allowed to operate (with the first licence given in 2007) in order to fill the huge gap specifically in health insurance awareness and supply in the country.


“Several operating requirements were relaxed (capital, solvency margins) to encourage more companies to start and for the sector to reach out to the under/un-insured population. The leaner and more focused structure of the specialised health insurance companies was expected to lead to more product innovation, better tie-ups with healthcare providers and overall, a more efficient healthcare system.”