UK-based research firm BRICdata says that India's robust economic growth, changing demographic patterns such as the rise in 'double-income no kids' families, increased FDI limits and the expansion of distribution channels will provide a boost to the health insurance market in the next four years.
The top six private health insurance companies in the present scenario increased their cumulative market share from 17.2% to 29.1% during the period that the report was made (2007-2011).
Only 26% of the overall healthcare expenditure in India comes from the local, state and central government authorities, while nearly 71% is paid by the patient's family, the report found.
Insurance accounts for just 3% of overall healthcare expenditure in India, indicating a substantial opportunity for the health insurance sector. The health insurance market is dominated by public-sector companies, while the private sector has made gradual progress.
The Indian health insurance market accounted for only 3.2% of the overall insurance industry in 2011. The driving factors for the health insurance sector are rising healthcare expenditure, increasing disposable income and the rise in population with affluent lifestyles.
During the review period (2007-2011), the penetration of Indian health insurance products increased from 0.07% in 2007 to 0.19% in 2011, as many new policies were sold in rural India.
One of the key challenges for the health insurance market is the low coverage of plans in terms of both the diseases and the hospitals covered.