Page 23 - Insurance Times November 2022

India operated under a public sector insurance regime from upon customers getting hospitalized for treatment. Then
1956 in Life and 1972 in non-life to 1999/ 2000, when the non-life public sector companies manufactured such
insurance sector was again liberalized. products.

As of 2022, there are 23 Life insurance companies and 30 Around 1993-94, LIC of India, the sole public sector life
GI & Standalone Health insurance companies, while one insurance company then, introduced first-time benefit-based
Indian reinsurance company. cover where a sum assured was paid to customers on
detection of certain critical illnesses such as cancer, etc. The
Government Health Care Expenditure product features were endowment type where the
customer gets the sum assured either at the time of
Government expenditure on health care reflects the care
contracting a disease or till the survival at the end of the
taken by the government on the nation's health that
policy term.
contributes towards productivity.
Many developed countries like the
Most of the health insurance in India
US, EU, etc., have around 10% of Health insurance in India started
was limited to medical claims till the
GDP as expenditure on health relatively late in the mid-1980s with
opening of the insurance sector in the
care, as can be seen from the the introduction of "Mediclaim"
year 2000. At the time of
below chart, while the US has
policies (indemnity type), where the liberalization, there were few
close to 16% of the GDP. On the
cover was limited to reimbursing the international standalone health
other hand, developing nations
cost of treatment through insurance companies lined up, like
and south Asian countries,
hospitalization. Aetna, Cigna, and others, for
including India and Malaysia, have
operation in India; however, they
expenditures of less than 4%. A
were looking for the lower capital
nation with low government expenditure on health care
requirement for health companies compared to life and non-
largely relies on the insurance sector to provide funding by
life companies, which regulators did not allow. Star Health
customers paying a premium for themselves.
was the first standalone health insurance provider in India
to begin its operations in the year
2006.
Spread of Insurance in
India

According to the report by Niti Aayog
published in October 2021 focusing
on "Health Insurance for India's
Missing Middle," below mentioned
table on the spread of health
insurance by the government sector,
social health insurance scheme,

Source: World Bank
Background of Health Insurance in India Online Insurance News Desk
Traditionally, health insurance in India started in 1986 with Get latest updates on Insurance Industry in India
the introduction of "Mediclaim" policies (indemnity type at our Online Insurance Youtube channel
cover), where the cost of cover is used to get reimbursed
www.youtube.com/bimabazaar

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