Pent-up demand boosted retail health insurance segment in October

According to data released by the General Insurance Council, standalone health insurers (SAHI) reported 38.3 per cent Y-o-Y growth in premiums for October, reaching ₹3,738.34 crore

Even as non-life insurers reported muted premium growth in October, standalone health insurers saw a robust 38 per cent year-on-year (Y-o-Y) surge. This growth was driven by pent-up demand in the retail health insurance segment.

 

It was also supported by the normalisation of goods and services tax (GST) — which improved affordability — and the normalisation of 1/n accounting norms.

 

According to data released by the General Insurance Council, standalone health insurers reported a 38.3 per cent Y-o-Y growth in premiums for October, reaching ₹3,738.34 crore.

 

Among major players, Star Health and Allied Insurance recorded a 22.5 per cent growth in premiums, Care Health Insurance posted a 34.22 per cent increase, while Niva Bupa registered a strong 66.55 per cent surge during the month.

 

“Growth returned for standalone health insurers (at 38.4 per cent) as 1/n accounting is in the base and also likely due to pent-up demand on account of retail health plans being GST-exempt now,” analysts at Nuvama said in a report.

 

In September, the GST on individual health and life insurance premiums was reduced from 18 per cent to zero. The industry has passed on the entire benefit of this tax cut to consumers, enhancing affordability. This move is expected to drive higher sales and further increase insurance penetration in the coming months.

 

The Insurance Regulatory and Development Authority of India (Irdai) had revised the formats for reporting and had excluded reporting of premium from long-term policies with effect from October 1, 2024, which is expected to be normalised from October 1, 2025.

 

Meanwhile, the non-life insurers, which include general insurers, standalone health insurers, and specialised public sector undertaking (PSU) insurers recorded a 0.07 per cent uptick in premium at ₹29,617.60 crore.

 

Data indicated that general insurers collected ₹25,464 crore in premiums in October, marking a 1.72 per cent growth.

 

Multi-line general insurers were impacted by the revision in GST rates of vehicles which also resulted in lower sum assured and motor insurance premium for companies, experts said.

 

Among the insurers, public sector general insurers recorded a growth in their premium.

 

The largest insurer — New India Assurance reported a 17.65 per cent increase in premiums, state-owned United India Insurance experienced 4.32 per cent growth, National Insurance saw a 14.10 per cent rise, and Oriental Insurance's premiums inched up 0.92 per cent.

 

Among major private general insurers, ICICI Lombard experienced premium growth of 16.3 per cent, while Bajaj Allianz General reported a heavy 50.5 per cent decline, and HDFC Ergo saw a decrease of 14.97 per cent.

 

According to a Nuvama report, the industry gross direct premium income (GDPI) grew 0.2 per cent on a high base (+24.1 per cent in October 2024).

 

Public multi-line insurers logged GDPI growth of 11.4 per cent, outperforming private multi-line insurers, which reported a contraction of 3.4 per cent.

 

PSU aggression likely continued in the motor segment.

 

Meanwhile, in April–October, non-life insurers reported a 6.1 per cent growth in premiums, mainly driven by performance across segments, which reported premium growth of 11.46 per cent.

 

General insurers or multi-line insurers reported a 4.7 per cent growth in premiums during this period while specialised PSU insurer premiums saw 23.8 per cent growth during this time.