Deepak Parekh, HDFC Chairman, said health insurance sector is likely to emerge as the largest segment in the insurance segment, overtaking motor insurance, which is presently the largest portfolio for non-life insurers.
“In the general insurance space, it is expected that the share of accident and health insurance will rise from 30% currently to 39% in the next five years. This growth means that accident and health will have a larger share and overtake motor insurance which currently accounts for the largest component in general insurance,” Parekh said while announcing the HDFC’s takeover of Apollo Munich Health Insurance.
“Accident and health is currently the fastest growing segment in the non-life insurance sector. The share of accident and health has increased from 9% in FY 2001 to 30% in FY 2019,” Parekh said. He added, “Fortunately, there is a changing mindset where people are beginning to recognise that health insurance should not be construed as an expense, but as a necessity and as an investment to safeguard their future.”
According to Parekh, an estimated 42 crore individuals have health insurance, which includes government and corporate schemes. But when these schemes are stripped out, only 3.3 crore individuals have a retail health policy. “Not surprisingly, India’s health expenditure which is the sum of public and private expenditure is under 4% of GDP compared to a global average of 10%. If one looks at many western countries, the expenditure on healthcare is predominantly by the public sector or through insurance,” he said.
He further said that public health and insurance expenditure accounts for one-third in India, while an overwhelming two-thirds is met by out-of-pocket expenditure, where the individual consumer bears the cost of his or her own healthcare. “Against backdrop of rising life expectancy and high out-of-pocket expenses, it is clear that the potential for growth in health insurance is immense,” he added.
