Covid effect: Health insurance share in non-life pool hits 40%

The fast spread of the pandemic in the past two years has helped the health insurance segment grab more than 40 per cent share in the overall nonlife insurance premiums.

Health insurance premiums have been the main drivers of the non-life insurance industry since the commencement of the Covid-19 pandemic. The health segment has grown by 27.4 per cent in April 2022, which is higher than the growth of 25.8 per cent witnessed in April 2021.

In April 2022, health insurance premiums stood at Rs 8,695.2 crore, having grown from Rs 5,423.6 crore in FY20, as per a report by Care Ratings.

This has resulted in the segment increasing its market share from 38.4 per cent in April 2020 to 40.9 per cent in April 2022. Within health, group health continues to hold the largest share at 63 per cent, followed by retail at 24.8 per cent, government at 11.3 per cent and overseas medical at 0.9 per cent.

Standalone health insurers registered a higher growth than the industry. Standalone insurers have increased their market share from 14.9 per cent in April 2020 to 17.8 per cent in April 2022. The share of general insurance companies has come down from 85.1 per cent to 82.2 per cent.

Meanwhile, crop insurance premiums declined to Rs 52 crore in April 2022, falling by 38.6 per cent against April 2021 and 60.4 per cent decline in April 2020. Issues such as delay in claims settlement, release of subsidy, and voluntary nature of the Pradhan Mantri Fasal Bima Yojana (PMFBY) scheme continue to hamper the scheme. The share of crop insurance in the non-life basket has reduced to 0.2 per cent in April 2022 from 1.5 per cent in April 2020.

The motor insurance segment has grown in April 2022 at 29.3 per cent. The Motor third party rate has been increased after two years and is expected to account for some growth in the premiums. However, the shortterm auto sentiment continues to be hampered by the chip shortage, lockdown in China, the Ukraine-Russia conflict, high fuel prices and increased interest rates by the Reserve Bank.