Group, Government business drive health premiums

Health reported high growth at 28%, largely from group and government business; retail health was up only 7% yoy. Health insurance premiums were up 28% yoy, up from 16% in April 2019. Private sector was up 28% yoy and specialized health insurance companies were up 61% yoy. PSUs up 11% yoy lost 600 bps market share to 40%. Higher growth during the month was largely from two players viz. Birla (up 108% yoy) and Religare (215% yoy). Excluding these two players, overall health segment growth was 21% in May (15% in April) i.e. in line with FY2019. Birla has reported 71% growth in retail health and 176% growth in group health. Religare

has delivered 34% growth in retail health and 30% growth in group health which has high driven its growth.

Overall retail health premium was up just 7% yoy. Chola MS reported 5% decline in retail health after 80% growth in April; this is the segment it is focusing on in FY2020E and hence a decline during the month is surprising. As for ICICI Lombard, some of the B2C business was reclassified under B2B, resulting in an 80% decline in retail business and 111% growth in group health. SBI continued to grow aggressively and reported 165% growth in retail health (98% growth in FY2019, 230% in April 2019).

Overall group health business was up 42% yoy. Bajaj was up 40% and Chola up 77% yoy; according to Bajaj, higher volumes in this business will improve its negotiating power with partners which will eventually benefit its retail business. SBI Life was muted with 11% growth (10% decline in FY2019, 43% in April 2019).

Government business was up 94% yoy (up 85% in FY2019, 16% decline in April). This was largely driven by Religare and Bajaj. Bajaj has tied up with 3 states - J&K, Chhattisgarh and Mizoram; the latter two are profitable and will continue to drive volumes in FY2020E as well.