Individual agents dominate the retail health insurance space in India with 75% share, as per FY 2020 numbers. Their share in retail premium went up substantially between FY 2015 and FY 2020 as banks lost ground in retail distribution, according to a CRISIL Research report.
"Retail policies are often purchased with the guidance of an insurance agent or broker to help navigate plan choices and premium costs," the report said." The dominance can be attributed to the fact that health is still largely an assisted product, wherein customers often require help in choosing the right policy in line with their needs," it added.
In the case of group health insurance, individual agents have a much lower share at 8%. With 42% share, brokers occupy the lead spot. Non-online direct sales and banks are the other major distributors in group business.
The report is part of Star Health and Allied Insurance Company's draft IPO prospectus.
Individual agents have highest aggregate share
Individual agents account for 34% of the health insurance premium garnered by standalone health insurance companies (SAHI) and general insurance companies. Their share went up 3 percentage points between FY 2019 and FY 2020. Along with brokers, they command over 50% share in total health insurance premium.
Data excludes data for personal accident and travel insurance; Figures in bracket represents health insurance premium (excluding PA and travel) | Source: IRDAI, CRISIL Research
"The share of individual agents has been fairly stable in last 5 years in the range of 30-35%. The share of business through direct channel has also remained stable at approximately 29%. Broker channel has lost market share to banks and their market share has reduced from 26% in FY 2015 to 23% in FY 2020," the report stated.
'Premium growth has strong co-relation with agent count'
According to the report, companies witnessed strong co-relation between retail business growth and increase in number of agents.
For example in FY 2020, the number of individual agents for SAHI companies saw a year-on-year growth of 31% from 5.2 lakh to 6.8 lakh. In the same period, retail business premium of SAHI companies went up by 26%.
In case of private sector insurers, premium and agent count both witnessed an 8% growth in FY 2020.
