New India Assurance increases premiums on health insurance by 10%

New India Assurance, the country's largest general insurer, has increased premiums on certain health insurance products by 10 per cent, according to a communication by the insurer to the distributors. The increase will be effective from November 11, 2024.

The general insurer has revised its premiums to align with the recent changes introduced by the Insurance Regulatory and Development Authority of India (Irdai) in the health insurance sector, the communication reviewed by Business Standard said.

“This adjustment is primarily due to the additional exposure resulting from the Irdai circular, which expanded coverage to benefit policyholders, leading to higher anticipated claims and necessitating a premium hike,” said a person aware of the development.

Irdai's master circular introduced several changes, including the reduction in the waiting period for pre-existing diseases to 36 months from 48 months and the reduction in the moratorium period to 5 years from 8 years, among others.

According to the General Insurance Council’s data, New India accounts for nearly 18.8 per cent of the industry’s health portfolio. The company’s health portfolio accounted for approximately 53 per cent, worth Rs 5649.86 crore, as of June 2024.

Further, amid the surge in medical inflation, other insurance companies are also believed to have increased their health insurance premiums.

“Other health insurance companies have also increased their premiums recently. This trend is driven by factors such as medical inflation, which can be two to three times the normal inflation rate, and the need to reset premiums to ensure the sustainability of insurance products,” an insurance distributor said.

An email sent to New India seeking comments remained unanswered till press time.

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