Abstract
Purpose Health insurance is one of the major contributors of growth of general insurance industry in India. It alone accounts for around 29% of total general insurance premium income earned in India. The growth of this sector is important from the perspective of overall growth of general insurance Industry. At the same time, problems in this sector are also many which are affecting its performance. Design/methodology/approach The paper provides an understanding on performance of health insurance sector in India. This study attempts to find out how much claims and commission and management expenses it has to incur to earn certain amount of premium. Methodology used for the study is regression analysis to establish relationship between dependent variable (Profit/Loss) and independent variable (Health Insurance Premium earned). Findings Findings of the study indicate that there is significant relationship between earned premium and underwriting loss. There has been increase of premium earnings which instead of increasing profit for the sector in fact has increased underwriting loss over the years. The earnings of the sector is growing at compounded annual growth rate of 27% still it is unable to earn underwriting profit. Originality/value This study is self-driven based on secondary data obtained from insurance regulatory and development authority site.
Highlights
1.1 Meaning of insurance Insurance is a contract between two parties where by one party agrees to undertake the risk of the other in exchange for consideration known as premium and promises to indemnify the party on happening of an uncertain event
Research methodology The study is based on secondary data sourced from the annual reports of Insurance Regulatory Development Authority (IRDA), various journals, research articles and websites
6.1 Findings The finding from the analysis is listed below: The average growth of net premium for the health insurance has been around 135% per annum even this sector is unable to earn underwriting profit
Summary
1.1 Meaning of insurance Insurance is a contract between two parties where by one party agrees to undertake the risk of the other in exchange for consideration known as premium and promises to indemnify the party on happening of an uncertain event. An insured needs two types of protection life and non-life. India India’s tryst with health insurance programme goes back to the late 1940s and early 1950s when the civil servants (Central Government Health Scheme) and formal sector workers (Employees’ State Insurance Scheme) were enrolled into a contributory but heavily subsidized health insurance programmes. As a consequence of liberalization of the economy since the early 1990s, the government opened up private sector (including health insurance) in 1999. This development threw open the possibility for higher income groups to access quality care from private tertiary care facilities. India in the past five years (since 2007) has witnessed a plethora of new initiatives, both by the central government and a host of state governments entering the bandwagon of health insurance. Little exercise, disregard for a healthy balanced diet and a consequent dependence on junk food have weakened our immune systems and put us at an increased risk of contracting illnesses
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