India’s insurance sector is witnessing significant changes in claims patterns across health, motor, and term insurance segments. These trends highlight the evolving dynamics of consumer behavior, regional disparities, and the growing impact of economic and environmental factors on insurance claims.
Rising Healthcare Costs Reflected in Higher Health Insurance Claims
The average claim payouts in health insurance have grown substantially, from ₹62,014 in FY23 to a projected ₹81,025 by FY25—a rise of about 30%.
Key Factors:
- Healthcare Costs: Medical inflation, outpacing overall inflation, is a primary driver of increased payouts.
- Greater Reliance on Insurance: Policyholders are relying more on insurance to manage escalating healthcare expenses.
Regional Disparities in Health Insurance Claims
Significant regional variations in health insurance claims are evident:
- Maharashtra: Contributed 14.5% of claims, with an average payout of ₹86,402.
- Delhi: Represented 10.2% of claims, with a higher average payout of ₹100,600.
These differences are influenced by the availability of advanced healthcare infrastructure and the higher cost of services in urban areas.
Changing Utilization and Demographics
1. Increased Claim Utilization:
- The frequency of health claims has risen from 4.9% in FY23 to 6.39% in FY25, driven by greater awareness, improved healthcare access, and proactive health management.
2. Younger Adults Driving Claims:
- Policyholders aged 18 to 35 accounted for 38.2% of health claims, influenced by seasonal illnesses and early diagnoses of chronic conditions.
3. Gender Distribution:
- Men made 86% of claims, reflecting higher insurance penetration among males.
Trends in Motor Insurance Claims
Factors Influencing Motor Claims:
1. Accidents and Weather Events:
- Accidents and total loss claims dominate, with a 40% spike during the rainy season.
- Heavy monsoons in cities lead to higher rates of accidents and flood-related vehicle damage.
2. Segmentation:
Hatchbacks: Account for 54% of claims, with average payouts ranging from ₹20,000 to ₹25,000.
SUVs: Represent 26% of claims, with higher repair costs of ₹30,000 to ₹35,000.
3. Regional Variations:
- Tamil Nadu and Andhra Pradesh report higher claims linked to cyclonic activity.
- Delhi NCR and Maharashtra see more accident-related claims.
4. Rising Demand for Add-Ons:
- Increasing policyholders are opting for zero depreciation and engine protection add-ons, even for vehicles older than five years, reflecting a shift toward comprehensive coverage.
Shifts in Term Insurance Claims
Leading Causes of Claims:
- Heart Diseases: Account for 25% to 30% of claims.
- Natural Causes: Represent 30% to 35%.
- Accidents: Contribute 15% to 20% of claims.
The residual impact of the COVID-19 pandemic remains visible in claim patterns, emphasizing the importance of health-focused term insurance.
Demographic Trends:
1. Male Dominance in Claims:
Male policyholders make up 90% to 92% of claims due to higher term insurance penetration and mortality rates.
2. Urban Concentration:
Claims are concentrated in urban areas, with Maharashtra, Uttar Pradesh, and Delhi reporting the highest volumes due to greater awareness and access to insurance.
3. Popularity of Policy Riders:
Around 35% to 40% of term policyholders include riders like critical illness and accidental death benefits, reflecting a growing preference for enhanced financial protection.
Conclusion
The key trends shaping India’s insurance claims underscore the growing role of insurance in addressing rising healthcare costs, weather-related risks, and mortality concerns. While regional disparities and demographic factors remain prominent, the increasing adoption of add-ons and riders points to a shift toward comprehensive and tailored insurance solutions.
As these trends unfold, insurers must continue innovating to meet evolving customer needs, ensuring robust financial protection in an ever-changing landscape.
