PSU insurers lose money on govt health schemes

Government-sponsored health insurance schemes account for three-fourths of the number of lives insured by the sector, though they have just 13 per cent share in the total health premiums. Higher claims ratio of government-sponsored schemes is a matter of concern for insurance companies.

The government-sponsored health insurance schemes, dominated by Ayushman Bharat, cover

35.71 crore lives, which is

76 per cent of the total lives covered by health insurance. However, the schemes account for just

13 per cent of the total health premiums. Of the total health premium of Rs 44,873 crore, their share is Rs 5,672 crore, as per the data from regulator Irdai.

Group business, excluding government schemes, accounted for 48 per cent of the premium or Rs

21,676 crore. However, they cover 15 per cent, or 7.29 crore lives. Individual or retail health business covers just 4.21 crore lives, or

9 per cent of the total lives. But they account for 39 per cent of the premiums at Rs 17,525 crore.

The claims ratio, or the the claims costs in relation to premiums earned, has been going up with the higher number of insured lives. In individual business, the incurred claims ratio was a comfortable 72 per cent while it is 102 per cent in group business and 113 per cent in government-sponsored business.

“The per-life premium is low in government schemes. The risk is high from a pricing deficiency perspective. The government had increased the sum assured for the Ayushman Bharat scheme. In government schemes we cannot underwrite the risk,” said Sanjay Datta, chief- underwriting, claims and reinsurance, ICICI Lombard General Insurance Company.