Niva Bupa likely to hike health insurance premium by 8-9% in FY26

Medical inflation forces Niva Bupa to revise pricing; expects 25% growth in FY26

Standalone health insurer Niva Bupa is likely to increase premiums on its health insurance products by 8–9 per cent in FY26 to account for rising medical inflation, said a senior executive of the company. 

“Price revisions depend on the product cycle. Last quarter, we increased premiums for our Reassure 2.0 product by 7 per cent. More revisions around 8-9 per cent are planned at portfolio level. Products have different revision cycles. It is important to price annually for medical inflation, rather than making large jumps every year,” Vishwanath Mahendra, chief financial officer (CFO) of the company, told Business Standard. 

Medical inflation refers to the rising cost of healthcare services and treatment. Medical inflation in the country has been hovering over 10 per cent and was projected to be around 13 per cent in FY25. In FY24, it was 12 per cent. 

With affordability of health insurance continuing to be a concern, Niva Bupa has segmented its portfolio based on affordability, with zonal pricing, and using various other levers reducing the impact on premiums, without affecting the business. 

Niva Bupa’s gross written premium (GWP) income increased by 28 per cent year-on-year (Y-o-Y) to ₹1,875 crore (without 1/N) accounting norms and 11 per cent Y-o-Y to ₹1,632 crore (with 1/N) accounting norms in April-June quarter (Q1FY26). Out of the total product mix, the retail health market share of the company stood at nearly 67 per cent, group health insurance stood at 31.3 per cent.

 

The standalone health insurer which grew at around 28 per cent in FY25 is targeting a mid-20 per cent growth in FY26 with a similar product mix. The GWP contribution of new retail health indemnity policies with sum insured greater than ₹1 million increased to 81.7 per cent in Q1FY26 from 73.7 per cent in Q1FY25.

 

According to I-GAAP, the insurer widened their loss in the quarter to ₹91.4 crore from ₹18.8 crore in Q1FY25. While, according to the international financial reporting standards (IFRS) accounting norms, the profit of the company expanded to ₹70.1 crore in Q1FY26 Y-o-Y from ₹35.5 crore.

 

According to IFRS, the combined ratio of the insurer dropped 70 basis points (bps) to 103.2 per cent in Q1FY26 from 103.9 per cent in Q1FY25.

 

According to accounting norms and Mahendra’s expectations, the company is likely to end FY26 70 bps lower than 103 per cent posted in FY25.

 

Meanwhile, Star Health and Allied Insurance, India's largest standalone health insurer, also plans to increase premiums on its health insurance products, but will shift to a discount-based pricing model. This means while base prices may rise, customers could receive discounts based on factors like healthy behaviour, no-claim history, or policy type, making pricing more personalised and potentially offsetting the premium hike for many.