Page 22 - Insurance Times November 2022

Cover Story

A Critical Analysis

of Health

Insurance

Sonjai Kumar
CFIRM, SIRM
Business in India of Risk Management, London
Certified Fellow of Institute

This article critically analyses the development of health insurance in India where on the one hand,
61% of India's population is covered by government health insurance schemes; however, in the
premium term, their contribution is only 11%.

Introduction 1980s with the introduction of "Mediclaim" policies
(indemnity type), where the cover was limited to reimbursing
This article critically analyses the development of health
the cost of treatment through hospitalization. However, the
insurance in India where on the one hand, 61% of India's
history of India's insurance sector goes back around 200
population is covered by government health insurance schemes;
years.
however, in the premium term, their contribution is only 11%.
Further, public sector general insurance companies are doing
The Life Insurance sector was born in India with the
the bulk of the health insurance business, including group
foundation of Oriental Life Insurance Company in 1818. The
insurance and government health insurance schemes. On the
Madras Equitable Company came next in 1829. It was
other hand, the individual health insurance premium is 20% of
followed by the Bombay Mutual in 1871, Oriental in 1874,
the total premium; out of this, 73% is contributed by standalone
and Empire of India in 1897. The Nationalization of Indian
health insurance companies.
Life Insurance Companies led to the establishment of the Life
The government expenditure towards health care is low at Insurance Corporation of India in 1956, which acquired 254
3% of GDP, which means the health care financing is through life Companies operating at that time.
the insurance system.
The General Insurance Sector began with Triton Insurance
Initially, the article covers the background of insurance and Company in 1850. Indian Mercantile Insurance succeeded
health insurance in India before analysing data. in the year 1907. The General Insurance Sector underwent
Nationalization in 1972, where 107 companies were merged
under four companies, National Insurance Company, New
Background of the Insurance Sector in
India Assurance Company, Oriental Insurance Company, and
India United India Insurance Company. As a result, the General
Health insurance in India started relatively late in the mid- Insurance Corporation (GIC) was born in 1971.

18 November 2022 The Insurance Times