Indian Health Insurance Market- 2012-2013

Health Insurance Market continues to be loss making portfolio during 2012-2013

Estimates of Indian Health Insurance Market for the year ending March 31, 2013 are now available and according to it this market has touched figure of Rs.15341 Crores.

Overall loss during the year is Rs.1533 crores.

Corporate portfolio and Group Government portfolio (Schemes like RSBY,) continue to be a loss making portfolio. Retail portfolio continues to be the segment where insurance companies have been successful in reducing the claims figures by following rigid norms. May be the decision of PSU’s to go in for strictness i.e. July 1, 2010 and strengthening of PPN has resulted in good results.

Indications are that State Governments will not increase ( as it was happening 2 years back ) their budget for schemes / subsidy. As on now we are aware of that 4 PSU’s are increasing the premium in Retail segment by 30% (during 2^nd half of 2013). Will it result in increase in Revenue or it can result in some of the clients not renewing their policies.

Health Insurance Portfolio – An Analysis

Few years back we were very enthusiastic about the growth of Health Insurance portfolio. This was especially true during 2007-08, when this portfolio grew from Rs 3210 Cr to Rs 5110 Cr. i.e by 59.20%. Let us look at the growth figures from 2006 to 2013:

% Growth of Health Insurance over the Years

Year	Amount (Rs Crores)	% Growth
2006-2007	3210	14.45
2007-2008	5110	59.20
2008-2009	6634	29.82
2009-2010	8305	25.68
2010-2011	11480	38.22
2011-2012	13184	14.84
2012-2013	15341	16.36

We have drawn graph showing the % growth YOY and, it shows that figure is fluctuating and is becoming less and less attractive as the years have passed by.

Let us try to make projections for next 6 years.

We have done this with growth rate of 12%, 20%, 30% & 60%.

If we achieve figure of 30% then the portfolio will be Rs 56960 Cr. in 2017-2018.

If some one asks me- What should be the growth with which you I will be happy?- I will say it should not be 30% gross but it should be 30% net (as we have to discount for inflation of 10% per annum in normal costs and 20% per annum in health care costs). Let us not be satisfied with meager growth of 16%- let us aim for 60%.

It means we should have growth of 60% year over year and then the figure will reach Rs 160862 crores in 2017-18