Tier I cities still top focus for health insurers for branch presence

At a time when the health insurance is slowly becoming a pull product, offices of standalone health firms are still concentrated in Tier I regions. Data from Insurance Regulatory and Development Authority of India (IRDAI) showed that of the 883 offices there was not a single one in rural areas.

Of the 883 offices of health insurers, a whopping 793 offices are in Tier I locations. During FY19, a total of 108 new offices were opened by standalone health insurers.

Not having any office in smaller regions means that the public has to either rely on online portals or third-party distributors for sales.

As per the geographical distribution of these offices, 50 percent of the offices are located in metro areas, while 40 percent are located in urban and 10 percent in semi-urban areas. There are no offices located in rural areas.

When it comes to tier-wise classification, Tier I cities have 90 percent of the offices. Tier II, III and IV cities had 4 percent, 5 percent and 1 percent offices, respectively. There were no offices in Tier V and VI cities.

IRDAI data also showed that only 15 states and Union Territories (UTs) have 91 percent of branches of standalone health insurers. There are seven states and UTs that have no branches of these insurers.

There are a host of districts that have no presence of these standalone health insurers. District-level analysis by IRDAI showed that health insurers have offices only in 245 districts out of the country’s 718 districts. This means that health insurers’ offices cover only 34 percent of the country’s districts.

Some states/UTs have a large proportion of health insurers’ offices. For instance, there were health insurers’ offices in Kerala’s 13 out of 14 districts. In Andhra Pradesh, 11 out 13 districts had standalone health insurers’ offices.

On the other hand, several regions like Andaman & Nicobar, Arunachal Pradesh, Dadra & Nagar Haveli, Daman & Diu, Lakshadweep, Mizoram and Sikkim had no offices of standalone health insurers.