The average health insurance claim in India has surged by more than 30% in the past three years, primarily due to rising hospital treatment costs and enhanced health cover options sought by policyholders. Data from PB Fintech’s Policybazaar, a Gurugram-based insurance distributor, highlights these trends, with the company processing around 15,000-20,000 claims annually.
Key Findings from Policybazaar Data
1. Increase in Average Claim Amount:
- The average health insurance claim amount in fiscal year 2025 stands at Rs 81,000, reflecting a significant rise over three years.
- Tamil Nadu reported the highest average claim amount at Rs 1.13 lakh, indicating regional disparities in treatment costs and insurance utilization.
2. Medical Inflation and Enhanced Coverage:
- Post-Covid, medical inflation has driven up healthcare expenses, contributing to higher claims.
- Customers are increasingly opting for add-on covers, such as coverage for consumables like gloves, syringes, and PPE kits, which are not traditionally included in basic health insurance.
3. Increased Frequency of Claims:
- The average claim frequency rose to 6.4 claims per year in FY 2025, compared to 4.9 claims per year in FY 2023.
- This uptick is attributed to greater awareness of health insurance and seasonal illnesses like dengue, requiring multiple hospitalizations within a year.
Expert Insights
Siddharth Singhal, head of health insurance at Policybazaar, noted
Post-Covid, the cost of health treatment has gone up significantly, accounting for medical inflation. Also, we are seeing more customers opting for add-on covers to include the cost of consumables within their health cover as well, which has pushed up the claim amounts.”
Trends Driving Higher Claims
1. Rising Healthcare Costs:
Increased medical costs, including advanced treatments and inflation, have pushed average claim values higher.
2. Broader Insurance Awareness:
Greater understanding of the importance of health insurance has led more people to purchase policies and utilize their benefits.
3. Impact of Seasonal Illnesses:
Seasonal diseases like dengue have led to multiple hospital visits, increasing the volume of claims and overall claim amounts.
Implications for Policyholders
- Premium Adjustments: The surge in claims may lead insurers to reassess premium rates to balance rising payouts.
- Importance of Add-On Covers: Policyholders are advised to consider comprehensive policies with add-ons to ensure adequate coverage for consumables and other hospital expenses.
Conclusion
The significant rise in average claim amounts and frequency indicates a shift in healthcare dynamics in India. While this highlights the increasing reliance on health insurance, it also underscores the growing burden of medical costs. Insurers and policyholders alike must adapt to this evolving landscape by focusing on affordability, accessibility, and comprehensive health coverage.
