Insurance premiums surpass health budget
NEW DELHI: In a stark indicator of India's shifting healthcare landscape, individual health insurance premiums have now exceeded the combined central government allocation for the Department of Health and Family Welfare and the Department of Health Research.
An analysis of annual reports from the Insurance Regulatory and Development Authority of India and corresponding Union Budget documents shows that while insurance premium collections briefly dipped in the immediate post-pandemic years (2021–22 and 2022–23), they have since surged past the national health budget.
Even when related spending by other ministries—such as Defence and Labour—is taken into account, India's total public health expenditure remains low: just around 2% of the Union Budget and 1.5% of GDP, falling short of the 2.5% target set by the National Health Policy.
This trend signals more than a budgetary shift—it reflects a structural transformation in how healthcare is accessed and funded in India. Increasing reliance on private insurance points toward a market-driven model where care is increasingly linked to ability to pay, raising serious equity concerns, particularly for the uninsured and underinsured.
Critics argue that insurance-based healthcare, especially when not backed by strong public infrastructure, can exacerbate inequalities. A large share of India's workforce remains in the informal sector and lacks access to comprehensive insurance. Public health facilities, meanwhile, continue to be underfunded and overstretched.
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Time of India
3 days ago
- Time of India
Cap on management expenses leading to recalibration of business: Future Generali CEO
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We've grown at twice the pace of the industry and will continue to invest in that,' he said. The company has also reined in its exposure to crop insurance, which previously accounted for a quarter of its business. That line is now under 10%. 'We've reduced crop as a precaution. The model does not leave enough room to manage risks effectively,' he explained, referring to the so-called 'cup-and-cap' framework, where profits are clawed back and losses subsidised which distorts pricing incentives. According to Rau, while there is a proposal to allow composite insurance companies, there are strong benefits in being a specialised insurance company. 'My personal view is that if you want to grow your business and be a player of consequence and size, you are better off having two separate companies'. Rau provided the example of standalone health companies that have grown faster than industry. 'Most of the market is dominated by standalone health companies,' Rau said. 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He pointed to the unregulated nature of private healthcare pricing as a problem. 'Hospitals don't have a regulator. There's still a vast difference in the claimed amount between a person who has insurance and someone who doesn't. A unified platform can solve a lot of these issues.' According to Rau there would still be differentiated products and specialised agents. 'Agents may use the platform, but they'll also pick and choose companies they are comfortable with. They want access to management, confidence in claims processes, and a good understanding of the products.' He argues that the real transformation lies not at the customer interface, but in the infrastructure beneath it. 'The front end gives the customer more options, but customers still want advice and handholding,' he said. 'The real diamond is a solid backend that gets the entire ecosystem to engage better. That's the game changer.' Rau offered a practical vision of how this might work. 'An agent can sell a product on the Bima Sugam portal, register a claim, access the network and bills—all through the same system. It would significantly improve the customer experience. Historically, shared backends have been more successful than front ends—look at mutual fund platforms or Vahan.' Such platforms could include features like real-time updates, hospital networks, procedure tracking, agent locators, and surveyor rankings. 'People talk a lot about the front end, but if we can get the backend right, it can really improve the experience for all stakeholders,' he said. Future Generali is investing accordingly. 'We are changing our core system and building capabilities around it,' Rau said. But he pushed back against the notion that technology brings cost savings. 'People think tech leads to savings—whether manpower or other costs. It doesn't. Technology costs money. It costs even more to keep it running. Skilled people are costly and constantly in flux.' Despite this, he sees value in what digitalisation enables. 'Volumes, complexity, better decision-making—that's all real,' he said. 'But even things like AI-generated suggestions can be annoying. I keep clicking 'no' to co-pilot prompts.' New models in the health ecosystem like managed healthcare being tried by newcomers are welcome, Rau added. 'These experiments are good. The industry needs to test hypotheses and see how they play out. If successful, they could move the needle not just for the company but for the entire sector.' Future Generali is running AI and chatbot pilots across all personal lines. 'This is not just for health, but across the board,' he said. The company's operational metrics back its strategy. With a solvency margin of 196% and one of the best combined ratios in the sector, it has sustained profitability despite limited capital infusions since 2019. 'The combined ratio is one of the best in the industry, despite our smaller scale. 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New Indian Express
5 days ago
- New Indian Express
Insurance premiums surpass health budget
NEW DELHI: In a stark indicator of India's shifting healthcare landscape, individual health insurance premiums have now exceeded the combined central government allocation for the Department of Health and Family Welfare and the Department of Health Research. An analysis of annual reports from the Insurance Regulatory and Development Authority of India and corresponding Union Budget documents shows that while insurance premium collections briefly dipped in the immediate post-pandemic years (2021–22 and 2022–23), they have since surged past the national health budget. Even when related spending by other ministries—such as Defence and Labour—is taken into account, India's total public health expenditure remains low: just around 2% of the Union Budget and 1.5% of GDP, falling short of the 2.5% target set by the National Health Policy. This trend signals more than a budgetary shift—it reflects a structural transformation in how healthcare is accessed and funded in India. Increasing reliance on private insurance points toward a market-driven model where care is increasingly linked to ability to pay, raising serious equity concerns, particularly for the uninsured and underinsured. Critics argue that insurance-based healthcare, especially when not backed by strong public infrastructure, can exacerbate inequalities. A large share of India's workforce remains in the informal sector and lacks access to comprehensive insurance. Public health facilities, meanwhile, continue to be underfunded and overstretched.
Mint
6 days ago
- Mint
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