India:Insurers to recalibrate health insurance premiums on higher medical inflation

Medical inflation in India is projected to hover around 10% to 15% in 2025, according to a report released by WTW, a leading global advisory, broking and solutions company.

WTW, in its Global Medical Trends Survey report, says that this reflects the continuation of trends observed in previous years.

This growth rate is influenced by various factors, including increasing healthcare demand, rising costs of pharmaceuticals and medical technology, and the overall economic environment. The anticipated rise in medical inflation is expected to have significant repercussions for healthcare pricing in India, likely causing insurers to recalibrate premium rates to maintain profitability.

In addition to the high prevalence of diabetes and cardiovascular disease, India also faces a rising incidence of cancers over the past few years. The market is seeing significant changes in cancer-related coverage and healthcare utilisation in 2024. There is greater focus on early detection and screening, innovative treatments and expanded coverage.

An emerging trend is the inclusion of genetic testing for cancer risk assessment in insurance plans, particularly for high-risk individuals, which helps with early detection and personalised treatment planning.

Employers are altering their coverage options, implementing cost-sharing arrangements (imposing higher deductibles and copayments) or excluding certain high-cost treatments to mitigate the impact of rising costs. Yet, at the same time, they are seeking even more tailored insurance products that align with their employees’ specific healthcare needs and that offer customizable coverage options, thus allowing individuals to choose plans that fit their financial and health needs — and in the process making their health benefits more flexible and attractive.

India - Medical cost trend with growth rates in %