Growth in health cover moderates Group Buyers Go Slow On Renewals

Mumbai: The share of health insurance in the non-life business has shrunk marginally with the group health segment seeing some pullback from buyers and retail not replicating the 30% plus growth in earlier years. 

    Data released by the insurance regulator shows that motor insurance has the highest growth of 31.3% with premium collection of Rs 24,176 crore. As aresult the share of auto insurance in the non-life business has risen from 38.8% last year to 41.1% as on March 2012. 

    According to Sanjay Datta, head of underwriting and claims at ICICI Lombard, there was some pullback from buyers of group policies. This includes state level health insurance schemes bought by states, including Andhra Pradesh and Tamil Nadu. 

    "Corporates are reluctant to pay more for health insurance. They typically shop for the best rates and in many cases because they have may have a fixed budget for employee costs, they cut back benefits rather than pay more," said Shreeraj Deshpande, head of health insurance at Future Generali Insurance. 

    He added that reduction in benefits were usually in the nature of curtailing coverage for parents by making this a voluntary cover where there employees pays on his own. According to Deshpande, although companies have been taking measures to bring down losses, most insurers continued to bleed on their health portfolio. 

    One reason for this was medical inflation which was higher than general inflation. "We are seeing some hospitals revise their charges twice a year as against only once in the past," he said. 

    Health insurance—the second biggest segment—has grown by 18.6% to Rs 13,345 crore which is slower than the overall growth in the non-life business. As a result its share has shrunk from 23.7% in FY11 to 22.8% in FY12. Overall the non-life industry has grown 23.2% to Rs 58,357 crore. 

    Meanwhile, the Insurance Regulatory and Development Authority (IRDA) has formed a panel which will recommend the way forward to provide health cover to those infected with the HIV virus.