Agents sell 70% of health insurance policies

Agents sell seven out of ten health insurance policies, says IRDAI’s annual report.

The share of agents in health insurance business both individual and group stands at 68%. In fact, these agents have contributed close to 33% of overall health insurance premium in FY 2015-16. A rough calculation shows that the agents have brought in premium of over Rs.8100 crore last fiscal.

The IRDAI report says, “Among the various channels of distribution, individual agents continue to contribute a major share of total health insurance premium. Their share in individual health insurance premium was still higher at 70%.”

This was followed by banks having a share of 14% in the health insurance business.

Direct sales, in house distribution channel of non-life insurance companies has emerged as the third major channel for distribution of individual health insurance business.

However, in terms of premium contribution in overall health insurance business that includes individual and group policies, this channel stood at second position. IRDAI said, “Direct sales contributed 28 percent in total health insurance premium. The share of this channel was very high at 43 percent in group health insurance premium.”

Another important channel for distribution of health insurance business is brokers, who contributed 4% share in individual health insurance. However, since most of their businesses comprises distribution of large ticket group health insurance policies, the share of brokers in overall health insurance premium remains high at 24%.

Share of various channels of distribution in health insurance policies (individual and group)

Source: IRDAI

During the year 2015-16, the health insurance premium grew by over Rs.4000 crore. The gross premium increased to Rs.24, 448 crore in FY 2015-16 from Rs.20, 096 crore in the preceding fiscal. This growth rate was the highest in the past 5 years.  Experts believe that the agency force has played a key role in achieving it.