Life insurers' health portfolio might see slump

IRDAI has said that a life insurer cannot offer indemnity-based products in either individual or group segment

With the Insurance Regulatory and Development Authority (Irdai) asking life insurers to withdraw indemnity-based health products, the overall health business is expected see a drop.

Irdai had said a life insurer could not offer indemnity-based products in individual or group segments.

The chief executive of a mid-size life insurance company said the sector was in the process of withdrawing plans. "Until new plans are launched in the health segment, premium collections from this will see a drop," the official said.

Insurers will have to give a prospective date of closure for indemnity-based products not later than three months from the date of notification of the regulation. For existing policyholders, the policy shall continue until the expiry of the term.

Further, Irdai said no single premium health insurance product can be offered under unit-linked platform.

Earlier, life insurers used to offer mediclaim policies, while non-life and stand-alone health insurers offered specialised policies.

But, this trend underwent a change in 2015, when life insurers became aggressive and launched a host of products to cater to rising demand. Overall, health plans contribute about 10 per cent of life insurers' portfolio.