Life insurance eyeing health care

INSURANCE COVER: ICICI Prudential has launched some health insurance schemes.

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New Delhi: Health insurance is a young sector which is predominately dominated by the public sector general insurance companies. It is also one of the fastest growing businesses for them.

As on March 31, 2007 these companies accounted for nearly 63 per cent of the health business and the segment grew by about 44 per cent that is almost double the growth witnessed by the entire non-life business in the same period.

To cash in on this boom, life insurance companies are looking at entering the segment.

Though the public sector players have enjoyed the dominant role in the segment, they are receiving stiff competition from private players. ICICI Lombard General Insurance was the most aggressive in the segment and recorded a 168.1 per cent growth at Rs 735.85 crore compared with Rs 274.46 crore in 2005-06.

On the other hand, New India Assurance grew only by 14.34 per cent in 2006-07 fiscal to Rs 765.29 crore from Rs 669.28 crore in the previous fiscal.

Private players

According to Rahul Aggarwal, Chief Executive Officer, Optima Risk Insurance Services, 'Both private and public sector insurers are growing their health insurance portfolios at a healthy pace. Reliance General Insurance, ICICI Lombard and Bajaj Allianz are looking at this segment seriously among the private insurers.'

Aggarwal said general private insurers were able to show better results because retail financial distribution required strong and well-defined processes to minimise human intervention and discretion.

'It is in this area that the PSU insurers lag behind and are ceding ground to private insurers in metros and large cities. However, they are growing because of their distribution spread in many small towns and villages where private insurers do not have a presence,' he said.

Big push

The current fiscal is likely to see a major push from both the private as well as public sector companies.