Analysis and Insights from Pricing of Health Insurance
from leading insurance companies in India.
The Health Insurance Price Index has increased by 2.8% in Quarter 2, 2022. The price index increased by 2% in the last quarter (i.e Q1 2022). Before that the prices had remained constant for the previous 5 quarters. The percentage change Y-O-Y (Q2-2022 Over Q2-2021) has been 5%.
There were expectations of health insurance price increase when the country grappled with covid claims, but surprisingly the prices remained constant during that period. The increase in prices has come with a lag effect and has seen back to back 2 quarters of rising prices.
Generally one should expect increasing prices for health insurance correlating with inflation rate in the country due to increase in medical costs.
Here are the premium prices from the leading 5 health insurance companies for all categories of age groups recorded in Q2, 2022. An average person of 26 years paid INR 8,749 premium annually for INR 5 Lakh sum insured and INR 10,841 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 17,556 for INR 10 Lakh sum insured amount and INR 14,048 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 25% 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, 807, by an age group of the 36-year-old category was INR 17945, by an age group of the 46-year-old category was INR 27,775 and by an age group of the 56-year-old category was INR 44,020
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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 2, 2022 report, a premium paid for 2 Adults of 36-years old was INR 14,769 and the premium paid for 2 Adults and 1 Child of the same age category was INR 17,758 against the sum insured of 5 lakhs.
The family floater plans generally cost less as there is an increase of premium of 51% on an average on adding 1 more adult of the same age or lower age in the same policy. The increase is meager (13.1% and 13.9% on adding 1st child and 2nd child respectively) on adding children to the policy.
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 Q2, 2022 (April 22 - June 22). The Insurer's individual rate may vary depending on age, coverage type, health profile, sum insured & add-on riders.
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