Group covers lead 22% growth in Q1FY23 medical health insurance premium

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Retail health, which led to the uptick in medical health insurance premia over the past two years through the pandemic, witnessed subdued growth within the April-June quarter (Q1) of FY23. Despite that, medical health insurance premia registered 22 per cent growth in Q1FY23 to over Rs 21,000 crore, primarily driven by group medical health insurance premia.

Motor insurance premia rose 27.5 per cent year-on-year (YoY) to Rs 15,765.95 crore, albeit on a low base, indicating a revival of growth within the segment buoyed by a pick-up in vehicle sales.

In keeping with the info released by the overall insurance council, retail health premia witnessed 11 per cent YoY growth in Q1FY23, while group health premia grew by 27 per cent. General insurers, which deal in multiple lines of business, witnessed only 2 per cent YoY growth in retail medical health insurance premia but managed to post 21 per cent YoY growth in overall health premia in Q1, owing to group health premia, which grew 25 per cent YoY.

Standalone medical health insurance corporations reported 21 per cent rise in retail health premia and over 46 per cent growth in group health premia. Their overall health premia were up 28 per cent YoY.

The group medical health insurance segment has witnessed a rise in premium rates attributable to medical inflation and antagonistic claims ratio in the sooner periods.

“The medical health insurance segment is growing on a big base, hence growth is now normalising. Within the June quarter, group health drove the expansion in medical health insurance however the dampener was retail medical health insurance. Even standalone health insurers are growing group business despite their forte being retail health. The pandemic-induced growth that we were seeing is now normalising. Going forward, growth within the health segment shall be driven by innovation, awareness, and further build-up in distribution channels,” said the CEO of a personal sector general insurer.

The primary quarter has typically been group health-heavy because in Q1, most corporates renew their group medical health insurance policies. “Also, group medical health insurance has been witnessing growth and that is reflected in premium growth. On the retail side, there was some normalisation. It is just too early to say but my sense is growth within the retail health segment will come back in the following quarters,” said a senior executive at a personal insurer.

Non-life insurers netted health premia to the tune of Rs 73,582.13 crore in FY22, in comparison with Rs 58,684.22 crore in FY21, an uptick of 25.39 per cent.

Experts view growth within the motor insurance segment as an encouraging sign for the industry, especially after muted growth on this segment following the Covid-19 pandemic.

“Growth in motor insurance was due to the low base of last 12 months. The subsequent two quarters are crucial for the motor segment. Overall, the motor industry is now bouncing back, so growth in motor insurance must be seen from that perspective, too. Motor sales, except two-wheelers, have come to pre-Covid levels. So, motor insurance growth is in tandem with the pick-up in vehicle sales,” said the person quoted above. Motor insurance premia grew only 4 per cent YoY to Rs 70,432.59 crore in FY22.

The third-party premium hike has kicked in and vehicle sales have gone up, leading to motor insurance premia witnessing growth, said the second person quoted above.

In Q1FY23, the non-life industry netted premia to the tune of Rs 54,492 crore, up 23 per cent YoY. While general insurers posted 22.73 per cent growth of their premia over the identical period last 12 months, the standalone health insurers reported 28.63 per cent growth.

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