HEALTH INSURANCE OUTPACES MOTOR INSURANCE IN INDIA
Propelling
growth at a faster pace, the Health Insurance Line of Business, has created
history by acquiring largest market share in Non-Life Insurance space in India.
The Pandemic while marred the business growth in Motor LOB by over 19% till
July in this fiscal year, the Health LOB maintained its growth at more than 10%
to acquire the top position with 32.7% market share leaving Motor LOB behind at
30.3% of General Insurance market in India.
Health Insurance gains largest market share in India |
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Particulars |
Health |
Motor |
Total Non-Life |
|||
Jul-20 |
Mar-20 |
Jul-20 |
Mar-20 |
Jul-20 |
Mar-20 |
|
Premium: Rs in Crore |
18415 |
51638 |
17049 |
69208 |
56542 |
189302 |
Growth |
10.4% |
13.4% |
-19.2% |
7.3% |
1.6% |
11.7% |
Market Share |
32.7% |
27.3% |
30.3% |
36.6% |
100.0% |
100.0% |
(Source:
G.I. Council of India)
Automobile
sector was witnessing a slowdown even before the COVID-19 outbreak and its
market share dropped from 38% to 36.6% in March 2020. Its revenue in ‘Own
Damage’ segment was virtually without any growth. Despite business continuity
efforts by most of the players of the industry the decline of more than 19%
impacted this LOB severely and it lost its position to Health Insurance LOB.
Disruption will stay for some time at least and demand revival will not be easy
for the general insurers. Domestic commercial vehicles may witness the
continued slump this year. The private car segment may pickup post lockdown as
people may avoid public transport and will follow social distancing norms.
On
the other hand, India’s Commercial Health Insurance Segment is experiencing
high growth owing to increased awareness in current pandemic situation and also
because of standardized products with customized health coverage launched this
year. Continued growth supported with awareness may help this LOB to
consolidate its leading position beyond any threat by Motor LOB by the end of
this fiscal.
HEALTH INSURANCE IN INDIA |
|||||
|
Retail |
Group |
Government |
OMP |
Total |
July 2020 Premium ( Rs in Cr) |
7421 |
10057 |
883 |
55 |
18415 |
Growth |
31% |
11% |
-43% |
-85% |
10% |
Market Share |
40% |
55% |
4.70% |
0.30% |
100% |
March 2020 Premium (
Rs in Cr) |
20514 |
25283 |
5027 |
814 |
51638 |
Growth |
12% |
23% |
-14.80% |
1.40% |
13.40% |
Market Share |
39.5% |
49.0% |
10.0% |
1.5% |
100.0% |
(Source:
G.I. Council of India)
COVID-19
posed challenges before general insurers and standalone health insurers but at
the same time it provided opportunities to them. The rising costs of medical
treatments and health catastrophes are now well recognized and a value is seen
in health insurance products. The Regulator has also responded to pandemic
situation in time and when it was observed that insurers are settling health
insurance claims within four corners of their contracts and observing the protection gap in available products the Regulator mandated Corona specific products to address these protection gaps. The corona product is mandatory for insurers, however it is for a shorter and limited period. The product is standardized and
insurers are allowed only to discover price as per their actuarial prudence. When
these products were launched the proposers were surprised with the wide gap in
prices of standard ‘Corona Kavach’ policies. The time will test the assumptions
of the actuarial wisdom of various insurers for such prices. Media reports
suggest that protection of Rs one lac for insured in age bracket of 25-30 years
is marketed at price range of Rs 215- 434 by Oriental Insurance whereas for
same sum insured and for the same age band the Star Health is charging
approximately 5 times higher premium in range of Rs 1000- Rs 1350/- For a five
lac cover for same age band the price discovered by Oriental is in range of Rs
636- 1286 whereas the Star Health’s product is available in range of Rs 3831-
Rs 5,172/-
Corona
Kavach is a standard product which every insurer has to sell as per the mandate
of the Regulator from July 10, 2020. Price is the only differential. The
product has perceived great value in no time after its launch and it is believed
that in a month up to 14th of August 2020 more than 7.5 lac policies
of Corona Kavach have been sold by stand alone health insurers and general
insurers covering more than 12.86 lives and the industry generated extra
premium of more than Rs 215 crore. The fear factor created value in the product
and its sale will continue to grow despite the fact that the product is limited
period single risk policy. However, this will propel exponent growth of this
LOB. The Health Insurance has acquired the top position in Non-Life space and
it is going to retain it for a longer period.
Vinay Verma
(The
writer is Deputy General Manager in Oriental Insurance but the views expressed
here are purely in his personal academic views)