Growth of Health Insurance in India

With increasing awareness of this protective role of health insurance and with renewed focus on marketing of health insurance products, the health insurance portfolio is now the fastest growing market segment for the non-life insurance industry

Health insurance is currently being offered by non - life insurance companies, specialized
health insurance companies and life assurance companies in India.

Despite the impressive growth of health insurance, it still remains a small percentage of the overall insurance business of non-life insurer the share of public financing in total health care is just about 1% of GDP compared to 2.8% in

After independence, life insurance companies were nationalized in the year 1956 and then the General Insurance business was nationalized in 1972. The history of health insurance in India traces back to 1923 when the workmen’s Compensation Act was passed.

In the year 1948 the ESI Act was introduced. Since then, die health insurance market has being on a leading edge with rules constantly changing. The insurance sector was opened up to new players in August 2000. Private insurance companies are allowed into the business of insurance with a maximum of 26% of foreign holding.

In order to further encourage foreign insurers to enter the Indian market the government has recently proposed to raise die Foreign Direct Investment (FDI) limit in insurance from 26% to 49%. Overall, the Insurance Regulatory and Development Authority (IRDA), has been able to script a smooth opening up process Health insurance has experienced dramatic growth over the past two decades.

The insurance industry of India consists of 57 insurance companies of which 24 are in life assurance business and 33 are non-life insurers. Among the life insurers, life assurance Corporation (LIC) is that the sole public sector company. In addition to those, there's sole national re-insurer, namely, General Insurance Corporation of India (GIC Re). Indian insurance industry is predicted to continue growing at a robust clip, reaching a market size of Rs 19,56,920 crore ($280 billion) by FY2020. The insurance industry is critical to the economic development and growth of a rustic.

the insurance industry in India is that the fastest growing segment within the non-life insurance sector. The market witnessed a strong double-digit growth of 24% in FY 17, with a market share of 24%, within the entire non-life insurance sector. It has been the fastest growing market segment, registering a CAGR of 23%, for the past 10 years. This phenomenal growth may be attributed to the liberalization of the economy and growing general awareness among the public on healthcare.

The launch of National Health Protection Scheme under Ayushman Bharat, in September 2018, in order to provide coverage of up to INR 500,000 (USD 7,723) to more than 100 million vulnerable families, holds heavy expectations, which increases penetration of insurance in India, from nearly 34% to 50%. Also, about 47.9 million farmers benefitted under Pradhan Mantri Fasal Bima Yojana (PMFBY) in 2017-2018.

Market potential. In addition to growth prospects for the overall economy that are far
higher than for many developed markets, India has enormous unmet needs for health care and
a huge population of uninsured residents. Even among emerging markets, India is one among the
least insured countries, with a insurance penetration rate of only about 20%.

Demography. The increase in life expectancy and growing prosperity mean that not only
are Indians living longer, but also the cohort of Indians over the age of 65 is projected to
increase markedly. By 2021, Oxford Economics estimates that 95m Indian citizens are going to be over the age of 65.

Rising incomes. The Indian bourgeoisie is additionally growing rapidly — estimated to extend by a
CAGR of nearly 7% for the five-year period 2016 to 2021 — and therefore the rising prosperity of the many Indian households is prompting demand for high-quality medical aid and increasing private sector participation.

As India has grown wealthier, its birth rate has markedly declined, from 25 live births per 1,000 population in 2000 to 20 live births in 2014. Even more importantly, the proportion of the population aged 65 and above is expected to grow significantly. From 4.3% of the population in 2000, Oxford Economics forecasts the share of population over 65 to rise to six .7% in 2021. This means that in four years, 95m Indian citizens will be over 65


Private health insurance spending has been growing rapidly in the past couple of decades, with a sharp rise to almost US$2.5b in 2010 (which, we surmise, reflects fears spread
by the swine flu epidemic). The Oxford Economics forecast, supported their view of macroeconomic drivers and therefore the increase in government and out-of-pocket spending, is for a
resumption of fast growth in the industry from 2017 onward, rising to US$3.7b by 2021.


As the amount of government spending on health care and health insurance is so limited,
the natural focus of the private sector is on developing innovative solutions that encourage more Indians to get insurance and to acknowledge the worth of preventive instead of emergency care. Notable innovations also are occurring in terms of both digital distribution and creating simpler underwriting pools.

Insurance is an emerging important financial tool in meeting health care needs of the people of INDIA.