New India Assurance, the largest general insurer in India, will increase premiums on several health insurance products by 10% in November 2024.
The general insurer has revised its premiums to align with the recent changes introduced by the IRDAI in the health insurance sector, according to a communication to distributors seen by Business Standard.
“This adjustment is primarily due to the additional exposure resulting from the IRDAI circular, which expanded coverage to benefit policyholders, leading to higher anticipated claims and necessitating a premium hike,” said a person aware of the development.
IRDAI's master circular, issued on 29 May 2024, introduced several changes, including the reduction in the waiting period for pre-existing diseases to 36 months from 48 months and the reduction in the moratorium period to five years from eight years, among others.
According to the General Insurance Council’s data, New India accounts for nearly 18.8% of the industry’s health portfolio. The company’s health portfolio accounted for approximately 53%, worth INR56.50bn ($674.5m) in June 2024. The proposed premium increases will apply to 25% of New India’s health portfolio, reported CNBC-TV18.
Amid the surge in medical inflation, other insurers are also said to have increased their health insurance premiums.
“Other health insurance companies have also increased their premiums recently. This trend is driven by factors such as medical inflation, which can be two to three times the normal inflation rate, and the need to reset premiums to ensure the sustainability of insurance products,” an insurance distributor said.
The premium increases as a result of the IRDAI circular are expected, according to insurance industry sources. In May, the expectation was that health premiums would be hiked by another 10-15% following the issuance of the circular. These hikes follow sharp increases in medical insurance premiums in the past two years. In the 12 months to May, health insurance premiums were pushed by 25-50%.