General insurance council (GIC), a trade body for non-life and health insurance companies has released data that shows that the health insurance industry has witnessed a growth of 10.7% in business premium collection in April 2020.
The premium collection has increased to Rs. 5,380 crore in April 2020 compared to Rs.4,859 crore in March 2020.
The growth has come largely due to sales of new health policies. MN Sarma, Secretary General, GIC estimates that the growth number could have been more than 20% in April 2020 if one were to factor in renewal premium. Since IRDAI has given two months extension to policyholders to renew health insurance policies, many people are yet to renew their existing health policies.
Sarma expects the health insurance business to grow further with the launch of Aarogya Sanjeevani Policy.
Another factor that has contributed to this growth is ease in premium payment. In its recent report, CARE Ratings said that the growth in health insurance premium collection may have been a result of IRDAI allowing the payment of health insurance premium in instalments.
A CEO requesting anonymity said that coronavirus pandemic has made people realize the importance of health insurance.
Overall, the non-life industry has seen a decline in all categories barring fire insurance. “The insurance business is expected to witness muted growth in the first quarter of FY21 due to the extended lockdown. However, the pandemic could cause an increased interest in the health segment,” CARE ratings said in its recent report.