New Delhi: Health insurance is a young sector which is predominately dominated by the public sector general insurance companies. It is also one of the fastest growing businesses for them.
As on March 31, 2007 these companies accounted for nearly 63 per cent of the health business and the segment grew by about 44 per cent that is almost double the growth witnessed by the entire non-life business in the same period.
To cash in on this boom, life insurance companies are looking at entering the segment.
Though the public sector players have enjoyed the dominant role in the segment, they are receiving stiff competition from private players. ICICI Lombard General Insurance was the most aggressive in the segment and recorded a 168.1 per cent growth at Rs 735.85 crore compared with Rs 274.46 crore in 2005-06.
On the other hand, New India Assurance grew only by 14.34 per cent in 2006-07 fiscal to Rs 765.29 crore from Rs 669.28 crore in the previous fiscal.
Private players
According to Rahul Aggarwal, Chief Executive Officer, Optima Risk Insurance Services, 'Both private and public sector insurers are growing their health insurance portfolios at a healthy pace. Reliance General Insurance, ICICI Lombard and Bajaj Allianz are looking at this segment seriously among the private insurers.'
Aggarwal said general private insurers were able to show better results because retail financial distribution required strong and well-defined processes to minimise human intervention and discretion.
'It is in this area that the PSU insurers lag behind and are ceding ground to private insurers in metros and large cities. However, they are growing because of their distribution spread in many small towns and villages where private insurers do not have a presence,' he said.
Big push
The current fiscal is likely to see a major push from both the private as well as public sector companies. PAGE_BREAK'On the other hand, general insurance companies might face some stiff competition from life insurance companies who are also eyeing this segment. From last year, life insurance companies too have started providing health insurance.
ICICI Prudential has launched its standalone product and has more schemes lined up. Bajaj Allianz Life Insurance has recently launched `Care First' which is modelled along the lines of health insurance products sold by general insurance companies.
ING Vysya Life Insurance has also been among the first few to offer a plan that protects against critical illnesses.
'Due to increasing health awareness and escalating medical costs, there seems to be a growing demand for products that cater to health related expenses,' YV DV Prasad, Head of Products, ING Vysya Life Insurance, told Business Line. He also added that the company is in the process of expanding its portfolio in this category of products.
Max New York Life is also looking at tapping this segment and is evaluating its prospects. 'We are mapping the landscape very carefully. And once the IRDA comes out with the rules and regulations on the issue, we will plan our next move and decide if it is a viable option for us to foray into the health segment or not,' B Ananthraman, Joint Managing Director, Max India Ltd, said.
The icing on the cake, however, would be when Life Insurance Corporation (LIC) enters the segment. LIC has a health division in place and with a strong distribution network, it will be a force to reckon with.
Source: Business Line, Moneycontrol.com
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