Health Insurance Sector of India set to cross Rs 1 lakh crore mark in FY24
Introduction
India’s non-life insurance segment is predicted to have a growth of 13-14% for the year 2024 in medium terms. The Health Sector is on track to cross the mark of Rs 1 lakh crore this year where the motor sector has already crossed Rs 80,000 Crores threshold in 2024.
A report by Care Edge says “The industry’s growth will be primarily driven by health and motor insurance segments, supported by increasing disposable income levels and a rise across other segments. The overall business growth is also being aided by a favourable regulatory environment, stabilization of loss ratios, and a focus on containing expenses.”
We can see-
Rise in Competition
Competition is expected to rise with new companies entering the market, while others are preparing to join. Tensions in the Red Sea might affect the marine insurance sector. Despite these challenges, the future looks steady for non-life insurance. However, increased competition, global uncertainties, and high inflation could harm economic growth and impact the non-life insurance industry.
February Growth
In February 2024, non-life insurance companies saw a 12.6% increase in premiums, reaching Rs 22,378.4 crore. This growth, although slower than the 20.0% seen in February 2023, was mainly driven by the Health and Motor OD segments.
For the year 2024, the industry is continuing to show strong growth, following the trend of recent years. By February, the industry had surpassed the total amount from the previous year. This growth is mainly driven by health and motor insurance.
However, compared to last year, there is a slight decrease in growth for liability, crop insurance, and marine cargo. Although, the fire and credit guarantee segments have not shown as much growth as they did last year.
Public Sector Unit Insures’
In February 2024, public sector insurance companies grew by 10.3%, which was higher than the 7.8% growth in February 2023. Private sector insurers, on the other hand, saw a growth of 12.3% in February 2024 compared to 20.3% in February 2023. The growth for the year so far has been positive, the YTD numbers too demonstrated robust growth with a focus on group health and motor insurance.
Specialized insurers saw a 6.7% decrease in February 2024 compared to a significant 111.1% increase in February 2023. Similarly, the year-to-date figures for FY24 continued to decrease by 29.3% compared to a growth of 4.4% in FY23.
This decline was mainly due to a 32.3% reduction in crop insurance premiums by the Agriculture Insurance Company, while some public sector and private general insurers took on more crop insurance premiums.
Standalone Private Health Insurers (SAHI) maintained their growth, reaching Rs 3,000.2 crore in February 2024. This amount was 9.0% lower than January 2024 but 29.3% higher than February 2023. SAHI is expanding its presence in retail health compared to Public General Insurers and increasing its share of the group health insurance market.
Conclusion
The Health Insurance Sector in India is on a trajectory of substantial growth, with the industry set to cross the Rs 1 lakh crore mark in FY24. Despite challenges and fluctuations in growth rates across different segments, the overall outlook remains positive, driven by factors like increasing disposable income, regulatory support, and a focus on cost management. This growth trend underscores the sector's resilience and potential for further expansion in the coming years.
