Mumbai: In a country where insurance compliance of cars and bikes owes a huge debt to the apex court, pure-play health insurers had a surprisingly pleasing end to FY20. Sure, health covers did qualify for tax rebates for decades, but Section 80D exemptions were not on the priority list of most Indians.
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The corona scare has changed that — perhaps for good. Six operational standalone private health insurers underwrote Rs 1,807-crore worth of premiums in March, an increase of more than 4% year-on-year in a month when much of the country was already under lockdown.
At the same time, general insurers reported a fall of 15% in gross underwritten premiums (GWP). The combined GWP of all non-life insurers, including general, standalone and state-owned players, declined 11% in March, although business rose for the full financial year.
“High medical inflation and increased awareness of health risks among the youth have been the drivers for health insurance,” said Amit Chabbra, business head- health, Policybazaar. “This was reflected during the Covid-19 period as well for insurers.”
To be sure, the segment mix for most general insurers largely comprises of motor, health and travel businesses while standalone health insurers specialise in selling only health products. GWP signifies the topline growth of insurers for a specific time period through fresh policies underwritten.
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Motor policies can’t be sold because dealerships are shut. Travel policies will likely take even longer to be back in currency, while bancassurance products also didn’t sell since physical distribution channels were shut.
The story for health covers, however, is different.
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“The pandemic surely has increased the awareness of having adequate health insurance, which will likely have a positive impact on business volumes as well,” said Sandeep Ghosh, financial services advisory lead, EY.
