Volume 7, Issue 1, January – 2022 International Journal of Innovative Science and Research Technology

ISSN No:-2456-2165

Linkage between Premium Collection Intensity and

Performance Indicators – A Study on Selected Health
Insurance Companies of India
Sudipta Chakraborty1

Abstract:- In recent years, health insurance sector has overall growth of the industry. It regulates and monitors all
become one of the fastest growing sectors in India. India the insurance companies (including those involved in the
still offers a huge untapped market for health insurance. health insurance business) operating in India. Indian
Thus, not only increasing numbers of general insurers, insurance companies and banks were in the hands of public
but some standalone health insurance companies have sector until 2000. From the first decade of 21st century, health
also penetrated into the industry, challenging others with insurance started getting due importance. Initially health
better offers and wide array of services. The present study insurance was offered by general insurers. Later, several
is an endeavour to fill up the existing research gap by companies started coming up with various health insurance
testing the existence of linkage between the financial services as a separate product line. They started dealing solely
parameter (i.e.; dependent variable) ‘premium collection in health insurance products and hence are known as
intensity’ and selected performance indicators (i.e.; Standalone Health Insurance (SAHI) companies. Health
independent variables), namely; ‘Incurred Claim Ratio’, insurance premiums have been registering a significant
‘number of offices’, ‘market share’ and ‘number of Compound Annual Growth Rate (CAGR) of 24.6% in the
policies issued’ over the five years i.e., from 2013-14 to preceding ten F.Y. The Gross health insurance premium
2017-18 by the six Standalone Health Insurance (SAHI) underwritten which was Rs. 2221 crores in the year 2005-06,
companies operating in India at present using multiple has increased to Rs. 20,096 crores by 2014-15
correlation analysis. The study is based on secondary data (Bandyopadhyay et al., 2018). The premium collection in
and the findings show that there is strong correlation health segment continued to surge ahead at Rs. 41,981 crores
between the dependent and independent variables and in 2017-18 from Rs. 34,527 crores of 2016-17, registering
hence it can be concluded that premium collection growth of 21.59%. The six standalone health insurers together
intensity of the selected health insurance companies has registered a growth rate in premium collection of 41.93%
significant degree of linkage with the performance against 41.06% growth rate during the previous year. The
indicators considered in the study. market share of health segment has increased to 27.86% from
26.95% of the previous year. As a result, the standalone
Keywords:- Health Insurance; Premium Collection Intensity; health insurers taken together infused a total capital of Rs.
Performance Indicators; Linkage; SAHI Companies. 217 crores, which is almost 6.59% of the total capital, infused
by the general insurers and re-insurers to their equity capital
I. INTRODUCTION base. The number of lives covered under health insurance
policies during F.Y. 2014-15 was 28.80 crores (Lama et al.,
Before liberalization, when India was a closed economy, 2015). During 2017-18, the general and health insurance
financial institutions were facing decrease in their interest companies have issued around 1.47 crore health insurance
margin. This was due to the rise in competition, changes in covering a total of 48.20 crore lives and registered a growth
technology, and the deregulation of the financial sector as of 10% in number of lives covered over the previous year. In
well as globalization. The major source of income by banks terms of number of lives covered, three fourth of the lives
is interest income. The insurance companies were also facing were covered under Govt. Sponsored Health Insurance
many difficulties in selling their insurance products through schemes and the balance one fourth were covered by group &
insurance agents. As the economy was downsizing, financial individual policies issued by general & health Insurers during
performance of banks and insurance companies were also the F.Y. 2017-18 (IRDA Annual Report, 2018). Thus,
deteriorating. Banks and insurance companies were in need undoubtedly it can be said that health insurance plays a great
of alternate source to increase their income. Indian economy role in shaping Indian economy today.
went through several changes when the first set of reform was
announced by the government of India in the year 1991. After In recent years, health insurance sector has not only
liberalization in 1991, many changes in the government become one of the fastest growing sectors in the non-life
policy occur; among them, insurance sector is one which got insurance industry in India, but it is also emerging as a
a major boost. Insurance Regulatory and Development significant business for non-life insurance sector. Different
Authority of India (IRDA) was set up as an autonomous body reasons including increasing awareness of health insurance,
under the IRDA Act, 1999 to regulate the Indian insurance rising healthcare costs etc. have become the driving factors
market to protect the interests of the policyholders and for for more people to go for health insurance in the last few

1
Assistant Professor in Commerce and Professor-in-Charge; Xavier Law School; St. Xavier’s University, Kolkata; Email id:
chakrabortysudipta1993@gmail.com; Contact no.: 9836417323

IJISRT22JAN488 www.ijisrt.com 318

Volume 7, Issue 1, January – 2022 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
years. Costs of hospitalisation, treatment expenses etc. may pocket payment. Most of the people and especially the
be beyond the reach of many, while taking resort to any health poor in India are not covered by health insurance.
insurance policy is much more affordable option. Thus, the  Verma et al., (2013) explained that health insurance is the
increasing popularity of health insurance is very obvious in a reduction or elimination of the uncertain risk of loss for
country like India with low per capita income. India still the individual or household. The study analyzed that
offers a huge untapped market for health insurance. Thus, not financing on hospitalization shows a large proportion of
only increasing numbers of general health insurers, but some people either borrow money or sell assets to pay for
standalone health insurance companies have also penetrated hospitalization especially among below poverty line
into the market, challenging others with better offers and wide population.
array of services. Looking at the changing face of the society  Bandyopadhyay et al., (2018) in their article “Penetration
and the participation of increasing number of health insurance of Health Insurance Business in India: An Insight”
companies a need of in-depth analysis in this regard is published in the book titled Emerging Issues in
immensely felt. Accounting, Finance and Taxation had made a
comparative analysis among the health insurance players.
II. REVIEW OF LITERATURE The findings of the study show that private insurers excel
the public companies in terms of most of their
For this study the following literatures were considered– performance measurement indicators.
 Rama et al. (1994) emphasized their research on assessing
the structure of health care facilities in public sector; A. Research gap:
private sector; and voluntary sectors. They also examined From the literature studied, it was found that there is
the utilization patterns for both the inpatient and dearth of research works focusing on the linkage between
outpatients care in different states of India. Their study premium collection intensity and certain performance
revealed that there exist significant variations in the indicators of Standalone Health Insurance (SAHI) companies
accessibility of the non-government health services. They at recent times. Although certain works have been done
found that in majority of the states, public healthcare was focusing on Indian health sector industry, there is still lack of
the only solution. However, there have been significant proper insight towards research works focusing only on the
changes across the nation in last few decades, and hence SAHI companies. Most of the existing research works focus
exploring recent studies can be effective and significant. on the efficiency, penetration and performance of health
 Baltelsmit and Bouzouita (1998), in their paper, examined insurance sector in India either by providing an overview of
the relationship between profitability and market structure the sectoral growth or making a comparison of performance
in automobile insurance and tests for the existence of a among the existing health insurers by taking them
positive relationship between concentration and individually, or by classifying them into two groups; namely,
performance. The data for the study pertained to the public sector and private sector companies. Thus, the present
period 1984 to 1992. The results showed a significant study is an endeavour in this direction and tries to fill the
positive impact of concentration on profitability for existing gap up of research by analysing the relationship
combined liability and physical damage lines in private between premium collection intensity and performance
passenger automobile insurance. indicators and also by making a comparative analysis among
 Bishnoi and Saharan (2007) in their article ‘Health the six SAHI companies operating in India
Insurance in India: Introspects and Prospects’ published
in The ICFAI Journal of Risk & Insurance, Vol.4 (3), had B. Objectives of the study
shown that the market trend, penetration level of health
insurance business, the premium level and index of  General Research Objective:
growth of health insurance business is continuously rising The main objective of the study is to find out if the
up in India. The study further found that market share in selected performance indicators have any impact on the
health portfolio of private sector players will overrule that premium collection intensity of the SAHI companies under
of the public sector players and will grab the maximum study.
share by 2010.
 S. Desai (2009) in the article ‘Keeping the Health in  Specific Research Objectives:
Health insurance’, published in Economic and Political The specific research objectives of the study are as
Weekly, on September 19, Vol. 44(38), observed that under –
large majority of Indian population depends on the private  To analyse the performance of the SAHI companies
sector, mostly in the form of out of pocket spending that providing health insurance services in India in terms of
accounts for more than 70% of all health spending in premium collection intensity as well as certain
India. performance indicators.
 Devadasan et al., (2010) in the article ‘Performance of  To make a comparison among the six SAHI companies on
Community Health Insurance in India: Findings from the basis of the selected indicators.
Empirical Studies’, at First National Conference on  To understand whether the selected performance
Bringing Evidence into Public Health Policy, Bangalore, indicators have any relationship with premium collection
India stated that health insurance is considered as a intensity of these companies.
protective measure against the harmful effects of out-of-

IJISRT22JAN488 www.ijisrt.com 319

Volume 7, Issue 1, January – 2022 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
III. RESEARCH METHODOLOGY Company Limited, Religare Health Insurance Company
Limited and Star Health & Allied Health Insurance Company
This study is a work of quantitative & exploratory Limited. Thus, the full population of SAHI companies have
research. The study uses quantitative approach as data been taken into consideration for the study.
collected have been interpreted by using some basic statistical
tools and also the multiple correlation analysis has been used For the purpose of the study, the following hypotheses
to find out the relationship of dependant variables with the are made:
independent variable under study, if any. For the purpose of H0: There is no linkage between premium collection intensity
this study, secondary data have been used. It solely relies on and performance indicators
secondary information collected reviewing extent literatures H1: There is linkage between premium collection intensity
such as several working papers on health insurance, articles and performance indicators
published in reputed journals of reputed institutions, IRDA
Annual Reports etc. This study considers five variables, A. Trend in health insurance premium collection:
namely; premium collection intensity, Incurred Claim Ratio, The general insurance industry including SAHI
number of offices, market share and number of policies issued underwrote total direct premium of Rs. 1,50,662 crores in
for the selected companies over the five years i.e., from 2013- India for the F.Y. 2017-18 as against Rs. 1,28,128 crores in
14 to 2017-18, of which the former has been chosen as the F.Y. 2016-17, registering a growth rate of 17.59% as against
dependant variable and rest are considered as independent 32.94% growth rate recorded in the previous year. The public
variables. For comparing the performances of the SAHI sector insurers exhibited growth of 12.58% in F.Y. 2017-18,
companies, premium collection intensity over the said five over the previous year’s growth rate of 26.27%. The private
years have been used. Premium collection intensity refers to general insurers registered a growth rate of 21.59% as against
average premium collected from the insureds, i.e.; Gross 35.55% growth rate during the previous year. The standalone
Premium Collected / Number of persons insured. Incurred health insurers registered a growth rate of 41.93% against
Claim Ratio, number of offices, market share, number of 41.06% growth rate during the previous year. Data shows that
policies issued and number of lives covered for the selected there is an increase in premium collection of almost all the
companies over the said five years have been considered as SAHI companies over the five years. Aditya Birla, which
performance indicators. Further, the study aims to check started its operation in late 2016, has also managed to earn
whether there is any linkage between premium collection significant amount of premium during F.Y. 2017-18, within
intensity and the performance indicators of the selected just one year of its operations. Cigna TTK has witnessed a
companies with the help of multiple correlation analysis. The drop in premium collection during F.Y. 2015-16; however, in
present study aims to cover a total of six standalone insurance later years it managed to increase its amount of premium
companies whose core business is health insurance; namely, collection. Although all the companies performed well, Star
Aditya Birla Health Insurance Company Limited, HDFC Health continues to be the leader in the said parameter and
ERGO (formerly Apollo Munich Health Insurance Company has added a significant amount in its account in the F.Y. 2017-
Limited), ManipalCigna (formerly Cigna TTK) Health 18.
Insurance Company Limited, Max Bupa Health Insurance

Source: Compiled by researcher from IRDAI Annual Reports 2013-14 to 2017-18

IJISRT22JAN488 www.ijisrt.com 320

Volume 7, Issue 1, January – 2022 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
As seen from the diagram above, the gross health Incurred / Net Earned Premium. Incurred Claims Ratios are
insurance premium collected by all the companies show an generally calculated on an annual basis and the reports are
overall increasing trend for the last five FYs. Star Health, published by IRDA. It shows the ability of a company to
having the first mover advantage, does not only continue to make payments towards claims.
be the market leader throughout, but also has managed to
increase its gross premium collection significantly for the last If the ICR of a company is more than 100%, it indicates
three FYs. Religare, on the other hand shows a steady growth. that the amount of money given away by the company as
In the year 2013-14 the amount of gross premium collected claim is more than the amount of money collected by the
by the said company was less than Max Bupa. However, by company as premium. As a result, the company will find it
the year 2017-18 it has managed to surpass Max Bupa in hard to sustain itself, and as a result, will either resort to
terms of health premium collection in spite of its growing rejecting some borderline claims, raise the premium to better
trend in premium collection. Thus, it may be said that the manage claims, or change their product altogether. If the ICR
growth rate of Religare in terms of health premium collection of a company lies between 50% and 100%, it implies that the
is more than that of Max Bupa. Surprisingly, Aditya Birla, company has collected more money as premium than it has
which started its operation from 2016, has shown significant given away as claims. In such cases, the company makes
growth in premium collection and has reached close to the profits and means that the company has not only produced a
gross premium collection figures of Cigna TTK. quality product, but has also succeeded in selling it to
customers. If ICR is less than 50%, it means that the company
B. Incurred Claim Ratio: is either hardly giving out claims or is making relatively large
It is the overall value of every claim that a company has profits. However, it is not considered good from the objective
paid divided by the total sum of premium collected during the point of view of health insurance business. Thus, the perfect
same period. Thus, Incurred Claim Ratio = Net Claims value of ICR should range between 75% and 90%.

Source: Compiled by researcher from https://www.bankbazaar.com/health-insurance/incurred-claim-ratio-irda-data.html

Data shows almost no company was able to achieve happed with Aditya Birla, which started its business in late
“ideal ICR” benchmark. However, except Aditya Birla, all of 2016.
them have managed to keep their ICR between 50% - 100%
throughout these five years taken under consideration. While C. Number of offices of SAHI companies:
ICR is a fine yardstick with which the performance of a Number of offices that a health insurance company have
company can be measured, it is not the sole consideration on is an important parameter of growth in terms of market share
which the reputation of an insurance provider depends. It does and revenue generation of the company. This is because
not tell the whole story as it does not take into account the having a greater number of offices ensure maximum outreach
time taken for the settlement of claims. Moreover, insurers to common public and potential customers. It does not only
who operate start-ups may not have earned a substantial create awareness relating to the necessity of health insurance
amount of money through premiums initially in its first few among the local people, but also paves the way for their easy
years of operations. As a result, the ICR of the company may access to the representatives of the companies for purchasing
be more than 100% indicating that the insurer is incurring of health insurance products and services.
losses due to the fact that the claim incidence in the initial
years may have been significantly higher. This is exactly what

IJISRT22JAN488 www.ijisrt.com 321

Volume 7, Issue 1, January – 2022 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165

Source: Compiled by researcher from

https://www.irdai.gov.in/ADMINCMS/cms/frmGeneral_Layout.aspx?page=PageNo3472&flag=1

From the figures, it is evident that all the SAHI D. Percentage of total market share:
companies have notably increased the number of their offices Market share of a company denotes the portion of a
over the years which in turn has added to their amount of market controlled by a company. Market share represents the
premium collected. This is because, these companies have percentage of an industry, or a market's total sales, that is
become more recognised and accessible by general public due earned by a particular company over a specified time period.
to their increased number of branches and has secured the Market share is calculated by taking the company's sales over
public confidence to make these SAHI companies their health the period and dividing it by the total sales of the industry
insurers. Further analysis of data shows that Star Health has over the same period. This metric is used to give a general
the maximum number of offices and it continues to add on to idea of the size of a company in relation to its market and its
the existing number over the years. Apollo Munich has competitors. Market share increases can allow a company to
managed to open good number of offices in between the FYs achieve greater scale with its operations and improve
2016-17 and 2017-18. Aditya Birla, though a very new profitability. A company can try to expand its share of the
entrant in the market, has opened too many offices within just market, either by lowering prices, using advertising or
one and a half years superseding Cigna TTK and Max Bupa, introducing new or different products. In addition, it can also
and almost touching Religare in terms of the number for grow the size of its market size by appealing to other
better recognition and accessibility by the customers. audiences or demographics.

Source: Compiled by researcher from IRDAI Annual Reports 2013-14 to 2017-18

Figures show that over the years all the companies have Secondly, these companies being specialised for providing
managed to increase their market shares. This is mainly health insurance products and services have earned the
because of two reasons. Firstly, the health insurance market confidence of potential customers. As a result, in case of
is growing at an increasing rate, which contributes to the health, they prefer SAHI companies as their insurers, rather
overall growth of market shares of all the SAHI companies. than the general insurance companies. Moreover, the facility

IJISRT22JAN488 www.ijisrt.com 322

Volume 7, Issue 1, January – 2022 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
of insurance portability service has also contributed to such personalized schemes rather than from non-life insurers
increase in market share of the SAHI companies, as changing dealing in health insurance products.
the insurer has now become free of hindrances. Cigna TTK,
which started its operations from February, 2014 has also E. Number of policies issued:
managed to capture significant market share over these five The number of policies issued by all the SAHI
years period. Similarly, Aditya Birla, which started its companies has increased over the years. This has caused a
operation in late 2016, has also been able to increase its significant increase in premium collected by all the
market share notable within just one-year time. Looking at companies over the years. Star Health, being the market
the table above, it can be concluded that all the SAHI leader has been able to sell off maximum number of policies
companies have successfully increased their market shares for all the five years under consideration. Apollo Munich
over time. Their attractive pricing and lucrative product offers stands in the second position just after Star Health. Aditya
have made the SAHI companies grow altogether increasing Birla, being the latest entrant in the industry, has the
their total market share from 2.89% to 5.52% in just five minimum number of policies issued of all. However, the rate
years. It also represents that people are now becoming more at which it is issuing new policies and adding new customer
interested to purchase health insurance products from SAHI is commendable.
companies because of their specialized services and

SHARE OF POLICIES
Aditya Birla Apollo Munich Cigna TTK Max Bupa Religare Star Health

65 65 64 64 63

3 5 7 8 9
10 9 8 8 6
0 1 2 3 4
21 19 18 17 17
0 2
2 0 1 3 -1 4 2 0 1 4 -1 5 2 0 1 5 -1 6 2 0 1 6 -1 7 2 0 1 7 -1 8

Figures in %
Source: Compiled by researcher from IRDAI Annual Reports 2013-14 to 2017-18

Considering the share of new health insurance policies F. Number of persons covered:
issued by the individual companies on the total number of This is an important indicator both in terms of
new health insurance policies issued by all the SAHI understanding the premium collection trend as well as it has
companies together, it is seen that over the years the share of significant social implication. In a developing country like
Star Health, Apollo Munich and Max Bupa has slightly India, where insurance density and penetration are very less,
decreased, whereas share of the other three SAHI companies a growth in the number of persons covered under any of the
including Aditya Birla has increased. Attractive health health insurance policy of any company is a sign of
schemes, low premium cost and tie-ups with banks (i.e.; development in economic well-being. Insurance is a contract
bancassurance) and other corporate organisations have of indemnity, not profit. Thus, though profit cannot be earned
contributed to such growth in the share of new health out of multiple policies on the same person, still there is a
insurance policies issued of these companies. tendency to have more than one policy in the name of the
same insured to ensure minimum out of pocket expense in
case of repudiation of a valid claim by any company.

IJISRT22JAN488 www.ijisrt.com 323

Volume 7, Issue 1, January – 2022 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165

PERCENTAG E O F PERS O NS CO VERED

Aditya Birla Apollo Munich Cigna TTK Max Bupa Religare Star Health

53.8 53.4 51.8 47.8

59.1

9.4 13.8
16.0 18.7 8.3
15.4 13.2
11.5 14.1 2.5 3.2
13.2 1.0
6.5 0.3 18.1
17.5 19.7
12.2 14.5
1.3 3.9
2 0 1 3 -1 4 2 0 1 4 -1 5 2 0 1 5 -1 6 2 0 1 6 -1 7 2 0 1 7 -1 8

Figures in %
Source: Compiled by researcher from IRDAI Annual Reports 2013-14 to 2017-18

The figures clearly shows that Star Health has covered companies is different, they are not comparable only on the
maximum number of persons throughout the five FYs under basis of gross premium collected. Thus, in order to
study. There is a cut-throat competition among Apollo standardise the variable, a new variable has been obtained
Munich, Max Bupa and Religare for the position of second, namely premium collection intensity, which acts as the
third and fourth company in terms of coverage of persons for dependent variable in this study. The independent variables
all these five years. However, the figures are much less as are Incurred Claim Ratio, number of offices, market share and
compared to the figures exhibited by Star Health. number of policies issued. In order to avoid the problem of
Significantly, Aditya Birla has covered commendable multicollinearity, number of persons covered by the said
number of persons under its health products within just one insurance companies has not been taken into account as an
year of starting its operations. When considered the independent variable.
percentage of persons covered by each company on the total
number of persons covered by SAHI companies, it is seen that In this study, the dependent variable is a financial
the results are fluctuating every year. Apollo Munich and performance indicator, whereas the independent variables are
Aditya Birla have been able to increase the percentage of operating performance indicators. Thus, this study aims to
persons covered over the years, whereas, percentage of find out whether there is any linkage of the operating
persons covered has decreased for Star health over the said performance indicators with the financial performance
five years. In case of the other SAHI companies, the indicator; i.e., if any correlation of the independent variables
percentages show a dip during the period of 2014-15 to 2016- exists with the dependent variable. For this purpose, the
17; however, they have been able to regain their positions in relationship has been analysed using the statistical tool
terms of percentages of persons covered in the year 2017-18. ‘multiple correlation’ with the help of statistical package
software IBM SPSS (Version 15). For this purpose, the
G. Linkage between premium collection intensity and other following hypotheses are made:
selected parameters: H0: There is no linkage between premium collection intensity
and performance indicators
Premium collection intensity refers to average premium H1: There is linkage between premium collection intensity
collected from the insureds, i.e.; Gross Premium Collected / and performance indicators
Number of persons insured. It basically represents the amount
of premium collected per person. Since, the size of the The results have been tabulated as under –

Table 8: Correlation between dependent and independent variables

Premium Collection Intensity
Aditya Apollo Max
Cigna TTK Religare Star Health
Performance Indicators Birla Munich Bupa
Incurred Claim Ratio -0.4258 -0.3817 -0.1963 -0.5682 -0.9176 -0.081
No. of offices 0.8735 0.9667 0.0882 0.9621 0.7998 0.9799
% of total market share 0.943 0.8585 0.3946 0.8657 0.8779 0.968
No. of policies issued 0.9712 0.9667 0.3845 0.9562 0.827 0.993
Source: Computed by researcher using IBM SPSS (Version 15) and compiled

IJISRT22JAN488 www.ijisrt.com 324

Volume 7, Issue 1, January – 2022 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
As the results suggest, all the independent variables about 25% market share in the non-life industry at present,
considered in the study have high correlation with the the health insurance segment has a significant role in covering
dependent variable. Incurred Claim Ratio portrays a negative various sections of Indian population who are otherwise
correlation, whereas all the other independent variables show insurable, but not covered with any health insurance scheme.
a positive correlation with the dependent variable. This is
because Incurred Claim Ratio = Net Claims Incurred / Net Report of the committee on India Vision 2020
Earned Premium, which shows the ability of a company to constituted by the then Planning Commission in its report in
make payments towards claims. Since, a greater number of December 2002 has already recognized that health insurance
claims incurred causes more drainage of funds, its impacts the can play an invaluable role in improving health care system
premium collection intensity adversely. The other in India. With the draft ‘National Health Policy of 2015’
independent variables, namely, number of offices, market targeting to influence the growth of the private health care
share and number of policies issued helps in adding more industry and medical technologies to ensure alignment with
customers to the companies’ credit, and hence they show a public health goals; it is expected that there will be significant
positive correlation with premium collection intensity. development in the availability of health infrastructure.
Incurred Claim Ratio highly impacts the premium collection Availability of health infrastructure also spurs the demand for
intensity of Religare. However, for the other companies, the health insurance. With an increase in the number of non-life
value of correlation is comparatively less. If talked about the insurers, there has been a significant improvement in the
other variables, most of them exhibit very high correlation product innovation in the health insurance segment.
value for all the companies (i.e., 80% or more), except Cigna Innovation in product development also offers ample
TTK in terms of number of offices, market share and number opportunity to various categories of the population to get
of policies issued. This is because as compared to other SAHI covered with much needed and specific health insurance
companies, growth of Cigna TTK in terms of premium solutions. Products are being brought out by various players
collection was minimum during the last five years. Whereas, for various non communicable diseases such as diabetes,
the independent variables under study show a stable growth cancer etc. The demand for specific health insurance
over the said period. Thus, the value of premium collection solutions also leads to product innovation, which in turn
intensity is low. Predatory pricing strategy, default in amount enhances the penetration of health insurance. During the year
of premium collection etc. are the reasons behind such low 2014-15, under various Governments sponsored health
premium collection intensity in spite of favourable growth in insurance schemes (including RSBY) 21.25 crore lives
the said independent variables. Thus, it may be concluded that (provisional figures) were covered. This is a potential market
there is strong correlation between the dependent and base down the line. When income earning capacity of these
independent variables under the study and hence it can be persons improves, they will turn as the potential market
understood that the operating performance indicators have segment to buy the voluntary insurance from the insurance
significant degree of linkage with the financial performance companies. Under these circumstances; keeping in view both
indicator under study, which also conforms to the theory and the need and the potentiality of the sector, Insurance Laws
findings derived by reviewing extent literatures. Hence, the (Amendment) Act, 2015 recognized health insurance as a
alternative hypothesis (i.e., H1) is accepted rejecting the null class of business enabling the incorporation of standalone
hypothesis (i.e., H0). health insurance companies.

IV. CONCLUSION Recognition of health insurance as a standalone class of

business is sure to usher in an era of improving an access to
Historically health insurance is recognized as one of the the health services to the entire range of population, thereby
important elements of health care. While the prevalence of reducing the share of ‘out of pocket’ expenses in the overall
health infrastructure and the technological advancements in expenses incurred towards health expenses. Recognizing
medical field may offer a succour, they do not completely health insurance as a class may result in a number of players
substitute for health insurance. The insurance sector in India entering this field as standalone health insurers. Insurance
which initially covered certain areas like life, motor, marine being the business of large numbers, it is essential that there
insurance is gradually making rapid strides to cover the is a demand from a wide range of the targeted population to
exclusive health risks contingent on human lives. Health enable the insurers to offer the range of products that cater to
insurance premiums have been registering a significant their health insurance needs. Availability of a number of
CAGR of 24.6% in the preceding ten years. The Gross health players who offer health insurance solutions also enhances
insurance premium underwritten which was Rs. 2,221 crores health insurance awareness leading to a reasonable demand
in the year 2005-06 has increased to Rs. 20,096 crores by that in turn helps in offering health insurance products at
2014-15. The number of lives covered under Health insurance economical prices. Incidentally, the Government has also
policies during FY 2014-15 was 28.80 crores. As per the increased the maximum Foreign Direct Investment cap to
Census of India 2011, the population of India was 121.02 49% in the year 2014-15. This increase in FDI cap, coupled
crores. As such, assuming that only one policy has been with recognizing Health Insurance as a special class, is likely
issued to one person, it may be estimated that approximately to attract a number of players offering a range of health
24% of India’s total population has been covered under any insurance solutions to the Indian insuring public.
of the health insurance policies during the FY 2014-15. It is
projected that the non-life industry has the potential to reach
Rs. 4,80,000 crores of Gross Written Premium by 2025. With

IJISRT22JAN488 www.ijisrt.com 325

Volume 7, Issue 1, January – 2022 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
RECOMMENDATIONS [11]. Desai S. (2009), “Keeping the Health in Health
insurance”, Economic and Political Weekly, 44(38), pp.
Findings of the study show that the SAHI companies are 18-21
outperforming over the years. Moreover, new SAHI [12]. Dutta S. (2012), “Evolution of Health Insurance in
companies are starting their operations in order to capture the India- Positives and Constraints”, IRDA Journal,
untapped market, understanding that there is a huge scope of 10(12), pp. 17-23.
penetration and expansion of the industry in Indian society. [13]. Goran, S. (1982), "Returns to Scale in the Swedish
However, all the SAHI companies operating at present are Property-Liability Insurance Industry", The Journal of
private players. No public company has shown interested to Risk and Insurance, 49(2), pp. 218-228.
enter into this segment so far. Since, public companies attract [14]. Gupta, I. et al (2000): “Health Insurance in India:
confidence from the masses, there is a huge scope for such Prognosis and Prospectors”, Economic and Political
companies in the industry. Almost all the non-life insurance Weekly, 34(20), pp.207-217, Jan 22.
companies now provide health insurance services, thus SAHI [15]. Health System for a New India: Building Blocks, NITI
companies face tough competition from them. Hence, they Aayog, Government of India, November 2019
need to further bring variety and speciality in the products and [16]. http://www.basunivesh.com
services offered by them to supersede the non-life insurers in [17]. http://www.mintwise.com
terms of different performance indicators. Further, the small [18]. http://www.mohfw.nic.in/index1.php
SAHI companies are much behind their competitors in terms [19]. http://www.policyholder.gov.in
of overall growth rate. Thus, they need to diversify their [20]. https://en.wikipedia.org/wiki/List_of_government_sch
product portfolio and create own niche of services in order to emes_in_India
sustain in the market profitably in the long run. The findings [21]. https://www.adityabirlacapital.com/healthinsurance
of the study show, operating performance indicators of a [22]. https://www.apollomunichinsurance.com
company have linkage with its financial performance [23]. https://www.bankbazaar.com
indicators to a great extent. Thus, improving the operating [24]. https://www.bankbazaar.com/health-
performance of the companies may lead to a favourable insurance/incurred-claim-ratio-irda-data.html
impact in financial performance as well. Lastly, it is seen that [25]. https://www.IRDA.gov.in
all the SAHI companies taken together constitutes only [26]. https://www.irdai.gov.in/ADMINCMS/cms/frmGenera
5.52% of the total market share of health insurance sector as l_Layout.aspx?page=PageNo3472&flag=1
on F.Y. 2017-18. Thus, the SAHI companies must conduct [27]. https://www.manipalcigna.com
campaigns to make people aware about the importance of [28]. https://www.maxbupa.com
health insurance and they also need to promote their schemes [29]. https://www.questia.com
more efficiently and effectively, so that their market shares in [30]. https://www.religarehealthinsurance.com
the industry increase. [31]. https://www.starhealth.in
[32]. IRDA Annual Reports 2013-14 to 2017-18.
REFERENCES [33]. Lama P. and Gangopadhyay S. (2015), Health Insurance
in India: A Study on its Emerging Growth Pattern and
[1]. Annual Reports of Aditya Birla Health Insurance Trends. Business Spectrum. 5 (1), pp. 26-36.
Company from 2013-14 to 2017-18. [34]. National Health Accounts Report (2009), Government
[2]. Annual Reports of Apollo Munich from 2013-14 to of India, Ministry of Health & Family Welfare,
2017-18. September 2010
[3]. Annual Reports of Cigna TTK from 2013-14 to 2017- [35]. Rai, A. (1996), "Cost Efficiency of International
18. Insurance Firms", Journal of Financial Services
[4]. Annual Reports of Max Bupa from 2013-14 to 2017-18. Research, pp. 213-233.
[5]. Annual Reports of Religare from 2013-14 to 2017-18. [36]. Singh and Shahi (2015), Comparative Performance of
[6]. Annual Reports of Star Health & Allied from 2013-14 Health Insurance Business of Public and Private General
to 2017-18. Insurance Companies in India. Management Review:
[7]. Baltelsmit, V.L.; and Bouzouita, R. (1998), "Market An International Journal, 10 (1), pp. 61-76.
Structure and Performance in Private Passenger [37]. Thakur and Kumar (2013), Health Insurance Penetration
Automobile Insurance", The Journal of Risk and in India: Implications for Marketers, International
Insurance, 65(3), pp. 503-514. Journal of Advances in Engineering Sciences, 3(3), pp.
[8]. Bandyopadhyay P. and Chakraborty S. (2018), 121-124.
“Penetration of Health Insurance Business in India: An
Insight”, Emerging Issues in Accounting, Finance and
Taxation, pp. 126-143.
[9]. Bishnoi V. and Saharan R. (2007), “Health Insurance in
India: Introspects and Prospects”, The ICFAI Journal of
Risk & Insurance, 4(3), pp. 58-68.
[10]. Choi, B.Y.P.; and Weiss, M.A. (2005), "An Empirical
Investigation of Market Structure Efficiency and
Performance in Property-Liability Insurance”, The
Journal of Risk and Insurance, 72(4), pp. 635-673.

IJISRT22JAN488 www.ijisrt.com 326