When the Insurance Laws (Amendment) Act was passed, it paved the way to carve out health insurance as a separate entity
The year 2017 saw a big jump in growth for the standalone health insurers. With an 43.38 percent growth in the April to November period, this segment outpaced the industry growth which stood at 17.55 percent. This segment which now has six players is all set to see two more new entrants.
In the last board meeting of Insurance Regulatory and Development Authority of India (IRDAI), O Care and Jiva Health were granted their R1 or initial licenses as reported by Moneycontrol. This will take up the total tally to eight by end of next year.
"Health insurance is a hot sector with newer players from abroad expressing interest to enter the Indian market. A handful of entities from Asia and Europe have also been doing a recce of the market," said an investment banker specialising in insurance.
The minimum capital requirement for setting up a health insurance company. However, Indian laws stipulate Indian management control which interested parties have been studying to understand the consequences.
"Companies who want to invest in this segment want a greater hold over the entity and its board. Hence, they are taking time to formalise plans," said the official quoted above.
When the Insurance Laws (Amendment) Act was passed, it paved the way to carve out health insurance as a separate entity. Reliance Capital has also carved out its health insurance business into a separate entity from Reliance General Insurance. They received the R2 approval from IRDAI for this recently.In the last few months, existing insurers have also deepened their product focus by covering maternity, dental procedures, cosmetic surgeries as well as mental health ailments. AYUSH and alternative medical therapies are also being mandatorily covered by health insurance companies.