The insurance regulator has expressed concern over the skewed penetration of health insurance in India with four states accounting for 62% of premium. The regulator is also worried about the sustainability of the business given the high ratio of claims to premium.
“While four states of Maharashtra, Tamil Nadu, Karnataka and Delhi UT contributed 62% of total health insurance premium, the rest 32 statesUTs contributed only 38% of total premium. In fact, the health insurance premium from 8 sister states of north-eastern India is only Rs 118 crore (0.6% for 2013-14,“ the Insurance Regulatory and Development Authority said in its annual report for 2013-14.
One of the reasons for the skew in premium is that 46% of health insurance premium comes from group policies sold to corporates.As a result, the coverage is highest in states with high level of industrialization.Individual policies account for only 42% of total premium while the remaining 12% comes from the govern ment schemes such as Rashtriya Swasth Bima Yojana.
The insurance regulator said that although premium from health insurance has grown from Rs 15,453 crore in 2012-13 to Rs 17,495 crore in 2013-14, the incurred claims ratio (ratio of outstanding and paid claims to premium received was highest for health insurance at 100.7% and motor at 79.5%, respectively. While in motor insurance there has been an improvement in the net incurred claims ratio, in the case of health insurance the ratio has progressively deteriorated from 94% in 2011-12 and 2012-13.