Analysis and Insights from Pricing of Health Insurance
from leading insurance companies in India.
The Health Insurance Price Index has increased by 2% in Quarter 1, 2022 after a trend of constant price index for the previous 5 quarters. Health Insurance Price Index has been constant at INR 25,124 for the last 5 quarters.
There were huge media speculations involved in the matter of health insurance premium increases due to the constant strain of COVID-19 claims. Though insurance companies forming a part of this index have refrained from taking any such step in the last few quarters, there is a meager increment of 2% in Q1, 2022.
Here are the premium prices from the leading 5 health insurance companies for all categories of age groups recorded in Q1, 2022. An average person of 26 years paid INR 8,563 premium annually for INR 5 Lakh sum insured and INR 10,581 premium annually for INR 10 Lakh sum insured for 1 Adult category. Whereas, the average payable premium by a 26-year-old, across categories, was INR 17,004 for INR 10 Lakh sum insured amount and INR 13,623 for an INR 5 lac sum insured.
This highlights the fact that the premium does not increase proportionately with the sum insured. From INR 5 lakh to INR 10 lakh sum insured, there was a hike of only 26% in premium compared to a 100% increase in sum insured.
It showcases the average premiums paid for two different sum insured values, i.e. INR 5 Lakhs & INR 10 Lakhs, by a 26-year-old individual to a 56-year-old individual.
|Age||Sum Insured||1A||2A||2A+1C||2A+2C||Average Premium|
*Source: Average prices in the above tabular data are determined from the leading 5 health insurance companies in India. These prices are for illustration purposes only. Actual prices may vary from insurer to insurer.
The average premium for the age group of 56-year-old was the highest whereas the average premium for the age group of 26-year-old was the lowest.
The average premium payable by an age group of the 26-year-old category was INR 15, 314, by an age group of the 36-year-old category was INR 17,436, by an age group of the 46-year-old category was INR 26,940 and by an age group of the 56-year-old category was INR 42,909.
The health insurance premium prices are highly influenced by the number of people added to the health insurance plan. A family floater plan lets the policyholder add another member of the family without a major increment in the premium price. According to the Quarter 1, 2022 report, a premium paid for 2 Adults of 36-years old was INR 14,394 and the premium paid for 2 Adults and 1 Child of the same age category was INR 17,146 against the sum insured of 5 lakhs.
TThe family floater plans generally cost less as there is an increase of premium of 50% on an average on adding 1 more adult of the same age or lower age in the same policy. The increase is meager (11.9% and 13.7% on adding 1st child and 2nd child respectively) on adding children to the policy.
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Of the 5 companies, forming the index, the variance observed in premiums among the health companies is quite high as compared to the variance observed in term insurance companies. This is primarily because of the fact that coverages, features, and benefits differ significantly for health insurance whereas term insurance is usually simple with similar benefits in case of death.
Note: The New Insurance India company has been excluded from the comparison due to the unavailability of data. Due to this, the previous index values would have changed to account for an accurate comparison of pricing trends.
The prices & charts displayed above are based on the average premium prices of 5 health insurance companies in India. We have selected five private health insurance companies in terms of their GWP earned as per the IRDAI annual report 2020-21 (Star Health and Allied Insurance Co. Ltd, ICICI Lombard General Insurance Co. Ltd, Bajaj Allianz General Insurance Co. Ltd, HDFC ERGO General Insurance Co. Ltd & Religare Health Insurance Co. Ltd.)
The prices represent the annual premium for each sample customer pertaining to age, coverage type & sum insured in Q1, 2022 (January22 - March 22). The Insurer's individual rate may vary depending on age, coverage type, health profile, sum insured & add-on riders.
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