Health insurers mop up Rs 1 lakh crore in FY25 as premium costs rise

MUMBAI: Health insurance coverage premiums crossed the Rs 1-lakh-crore mark in the primary 10 months of the present monetary yr, marking a ten% improve from Rs 90,785 crore mopped up in the identical interval final yr. However, progress has slowed in comparison with the earlier fiscal yr when premiums grew 20%.
Total medical health insurance premiums for FY24 stood at Rs 1.07 lakh crore. In FY25, the premiums reached Rs 1 lakh crore in Jan 2025, knowledge reported by non-life insurers confirmed. Individual well being phase recorded the quickest progress, increasing by 13.5% to Rs 37,068 crore, accounting for 38% of the overall. Group medical health insurance, primarily bought by firms for workers, remained the dominant class with a 53% share. Premiums in this phase rose by 12.4% to Rs 47,312 crore.
In distinction, premiums from govt-backed schemes, together with Ayushman Bharat Yojana, declined by 9.7% to Rs 8,828 crore. Under the scheme, state govts both buy insurance coverage or set up trusts to settle claims.
In FY24, all three segments – govt schemes, group insurance coverage, and particular person insurance policies – had registered double-digit progress. This yr, complete premium progress has moderated to 10.4%, with some policyholders seeing will increase exceeding 10% following price revisions by insurers.
The rising price of medical health insurance has additionally raised issues about attain. Last yr, regardless of a 20% improve in premiums, the variety of people lined beneath private well being insurance policies grew by simply 5%, broadly monitoring workforce enlargement. Affordability stays a key concern.
The sharp leap in premiums beneath particular person insurance policies have elevated requires waiver of 18% GST on medical health insurance premium. In addition to the rise in charges, insurers have been pushing people to take increased sum assured on the grounds of medical inflation. While a decade in the past, the usual mediclaim was a Rs 3-lakh-cover, most insurers now counsel Rs 5 lakh.

Besides excessive claims ratio in group insurance policies, one more reason for the rise in the price of cowl is the enlargement in its scope. Many insurance policies now cowl maternity costs. The regulator has additionally made it obligatory to incorporate some covers that had been earlier excluded.
Data from Star Health and Allied Insurance, which accounts for a 3rd of particular person well being insurance policies in India, present a decline in the retail well being renewal ratio from 98.2% in Dec 2023 to 94% in Dec 2024. The firm additionally reported a ten% rise in the general sum insured in retail well being.
Among insurers, New India Assurance stays the market chief, holding a 17% share of complete medical health insurance premiums, adopted by Star Health (13%) and Bajaj Allianz (7%). Standalone well being insurers collectively account for almost 30% of complete premiums.