Life insurance companies may soon be able to offer health insurance policies: report
The Insurance Regulatory and Development Authority of India (Irdai) plans to allow life insurance companies to offer health insurance policies and is expected to release draft guidelines soon, according to a media report. The move is expected to reduce premiums and increase access to affordable health coverage.
“Life insurance companies inherently get more customers than health insurers in the retail space, which will help them cover more people with medical insurance at more affordable premiums,” according to the livemint report. citing a source. The report adds that Irdai’s internal committee has been discussing the proposal for the past few weeks.
Life insurance companies posted an 84% growth in their cumulative new business premium to Rs 17,940 crore in April 2022, mainly helped by LIC, according to data from Irdai. The 24 life insurers had collected Rs 9,739 crore as new business premium in the same month a year ago.
The largest insurer, the state-owned LIC first year premium or new business premium more than doubled (with an increase of 141%) to Rs 11,716 crore from Rs 4,856.76 crore rupees in April 2021, said the Insurance Regulatory and Development Authority of India (Irdai). .
Five private sector standalone health insurance companies recorded a growth of 29.14% in their collective gross premium income during the month to Rs 1,550.14 crore, from Rs 1,200.34 crore a year ago .
Out of the total of 31 non-life insurance companies, 24 general insurers recorded a growth of 23.57% in their gross direct written premium in April to Rs 19,705.86 crore, according to data from Insurance Regulatory and Development Authority of India (IRDAI).
Will this benefit the LIC?
This decision should also benefit LIC, whose shares are currently experiencing a continuous decline. Its shares were trading on Tuesday at Rs 666 apiece, against the IPO issue price of Rs 949 per share last month.
LIC held a 44% market share in FY22, but has lost market share to peers over the past five years, JP Morgan points out in its report. LIC’s retail premium is growing faster than the industry and surpasses the 2019 level. LIC is focused on addressing portfolio white spaces. It is also pushing distribution into agencies and other channels, opening up upside risk, JP Morgan said in its report.
With 30 million policyholders and the highest market share – 61% in new business premiums and 71% in number of policies – LIC is the oldest and most trusted brand in insurance products . From insurance plans to reimbursement plans to endowment policies, it offers a wide range of products for different age groups and types of customers.
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