Health Insurance to witness double-digit growth in medium term

According to a report, the health insurance segment that has seen a strong growth inr the last five years will continue to witness a higher double-digit growth in the medium term helped by low penetration. During FY15-FY20, the segment rose by a compound annual growth rate (CAGR) of 20 per cent.

“We expect the sector to grow at higher double digits in the medium term, with private players growing even faster as they have been gaining market share over public sector firms and also because of the increase in premium prices due to medical inflation,” wrote India Ratings and Research in a report.

The agency said that it was essential for insurers to maintain adequate buffers over the regulatory minimum so as to be prepared for any unforeseen risk events.With the increasing standardisation of policies with an incremental reduction in exclusion, there could be upward pressure on premium pricing, it said.

Also, the COVID-19 outbreak has led to an increase in claim severity across insurers as the lack of standard rates between hospitals has led to higher outflows, it said.