9% of Aditya Birla Health Insurance customers got 6–100% premium refunds for staying active, says Mayank Bathwal

Mayank Bathwal

Health insurance in India stands at a critical juncture. From the possible GST exemption on premiums to rising claim ratios and the debate over hospital overcharging, the industry is grappling with challenges that directly affect millions of policyholders. Mayank Bathwal , CEO of Aditya Birla Health Insurance in an interview with Teena Jain Kaushal unpacks what these changes mean and how the future of health insurance is being redefined in 2025 with focus on customised and wellness products.

Health insurance premiums are exempted from GST. How much of a cut will be passed onto policyholders?

From 22nd September, customers can expect an 18% benefit on premiums with the GST exemption. There may be some moderation of this benefit over time, as the impact of input tax credit adjustment becomes clearer. However, this step ensures that health insurance becomes more affordable and within reach for many more families.

With more taxpayers shifting to the new tax regime next year, could that slow down health insurance purchases since tax-saving incentives will reduce?

Honestly, I don’t think so. Our data shows that very few people buy health insurance only for tax benefits. A large proportion of taxpayers have already moved to the new regime, and we haven’t seen any negative impact on health insurance growth. There are other, stronger growth drivers at play.

Recently, the tussle between insurers and hospitals over overcharging made headlines. How big is this problem?

Let me put it this way: both insurers and hospitals ultimately serve the consumer. Medical inflation in India is running at 12–14%, and yes, at times insurers feel costs are inflated. Hospitals, of course, have their own challenges. The solution is dialogue and predictability. We are simply asking for transparency so that we can price products fairly. Not all hospitals overcharge, but a small section does, and about 15–20% of claims we receive are flagged due to fraud, waste, or abuse. Unless we address this, premiums will keep rising.

Medical inflation has already led to premium hikes. What’s the outlook for 2025?

The industry will likely grow 15–20% this year, and we at Aditya Birla Health are growing faster around 40%. But yes, if costs continue to rise at 12–14%, it will reflect in premiums. For older products, an 8–10% hike is normal. Newer products, however, already factor in inflation, so hikes there are unlikely in the next two to three years.

Claims settlement is the real test of an insurance company. How do you see Aditya Birla Health Insurance performing on claim settlement, both in terms of speed and ratio?

We are very focused on making claim settlement simple and transparent for our customers. Today, our claims ratio in the retail segment is around 55–60%, and in the corporate segment, it is higher at 80–85%, which is natural because of lower acquisition costs. What’s important is predictability and fairness customers need to know what is covered and how quickly it will be paid. We aim to keep retail claims ratio around 60–65%, which is healthy for both customers and the insurer, ensuring sustainability of premiums. And yes, our endeavour is always to settle claims as fast as possible because that’s the true moment of truth for policyholders.

Your flagship product offers up to 100% premium discount on renewal if wellness targets are met. How successful has this been?

Very successful. About 9% of our retail indemnity customers earned some wellness-linked benefit last year ranging from 6% to a full 100% refund. Thousands of customers actually got their entire premium back because they actively maintained their health. It could be walking, yoga, gym, or any form of physical activity. This creates a win-win: healthier consumers and lower claims for us.

We’re focused on making policies inflation-proof. For example, your sum insured can automatically multiply up to six times over the years. A Rs 25 lakh cover can grow to Rs 1.5 crore in five years. We’re also integrating digital health scans for instant discounts, and even covering mental health. The idea is to make health insurance more holistic.

How about customization especially for tier-2 and tier-3 customers who may not need access to high-end metro hospitals?

Absolutely. Consumers want flexibility. That’s why we have introduced zonal pricing, defined hospital networks, and modular products. Customers can start with a base policy and add optional benefits depending on their needs and budgets. This trend of personalization will only grow stronger.

Finally, with so many options in the market, what should one look for when buying a health insurance policy?

I would flip the question. Instead of only asking what’s covered, ask what’s not covered. Check exclusions, waiting periods, and room rent caps. If something isn’t covered, see if you’re comfortable bearing that cost—or if there’s a rider to reduce the gap. That way, you’ll know exactly where you stand when a claim arises.