Page 66 - India Insurance Report 2023- BIMTECH

54 India Insurance Report - Series II

premium of Rs. 81,000 crores to become the largest portfolio in General Insurance.

The regulator (IRDAI) also introduced specialized Covid-19 related covers like Corona Rakshak,
Corona Cavach, and also standard health insurance product – Arogya Sanjeevani, which helped the society
to benefit and also emphasized the need to improve their health coverage. As a result, many customers
have bought additional health covers and super top-up covers to enhance their health coverage significantly.

Another primary reason for the increased business growth is the increased coverage of people under
government-sponsored health insurance schemes. Particularly, Ayushman Bharat Pradhan Mantri Jan
Arogya Yojana (AB-PMJAY), which was introduced in 2018, has become one of the largest government-
subsidized health insurance schemes in the world, covering nearly 50 crore individuals (40% of the
population) in the country.

Figure 6: Projection of Property Insurance Premium - 2030

As we discussed, the Health Insurance segment will continue to grow exponentially in the coming
years; as predicted by the model, this segment will procure a minimum premium volume of Rs.1,66,000
crore (as indicated in the above chart- Figure 6) and a maximum premium volume of Rs.2,90000 crore in
2030 considering the increase in the medical inflation and increasing cost of health care. Since this
segment has become the most critical and extensive portfolio in the general insurance market, the industry
needs to address the following issues impacting the sector to make this portfolio highly profitable and
sustainable in the long run.

 A rapid increase in Health Care Costs, coupled with claims leakages, have contributed to increased
ICR; the ICR of the portfolio is over 100%. However, the ICR of Standalone Health Insurance
providers is less than 60% as per the IRDAI Annual Report of 2021, suggesting that better management
of Hospitals and TPAs could help the insurers contain the claim cost.

 Industry experts opine that the claims leakage of this portfolio could range from 25% to 30%. The main
reason for the higher leakage is the frequency of fraudulent claims and exaggerated claims amounts.
 To have better management of the hospitals and the TPAs than at present and also to plug the fraudulent