The term insurance is not new to India. The concept of life insurance took place in India way back in 1818. During the initial time, insurance business was mostly dominated by foreign companies who used to invest in the insurance works in India. Indian insurance industry took a giant leap towards growth when Indian government enacted Life Insurance Corporation Act in 1956. It was a major boost for insurance industry.
The year 1999 witnessed establishment of Insurance Regulatory and Development Authority (IRDA) which was soon followed by allowing private players in the insurance sector. Indian insurance sector has grown substantially in last decade. The sector has also attracted many private players in the arena.
Despite the manifold growth witnessed in life insurance sector, a large population of India is still not under any kind of life insurance coverage.
According to National Council of Applied Economic Research (NCAER), health insurance penetration in India stands at a dismal 1.2 percent. Compare this fact with average medical expenditure of an Indian household which is 6.7 per cent of the annual income. That clearly reflects growth potential of health insurance in India.
On a macro level, very few households in India have contingency plans to meet their health expenses. Health risks in India are perceived differently than the western population. Prior planning in health issues is yet to be a major priority.
However, things are improving gradually. With increasing focus on healthcare and availability of several attractive plans by large number of players, health insurance coverage in India has picked up in recent times. Young professionals are also focusing on proper planning to take care of any future emergency.
Health insurance policies in India have also managed to cover people in higher age group. These plans and policies cover almost all kind of ailments including accident and other physical problems. Introduction of Third Party Administrators (TPA) has also proved mighty beneficial for both insurers and insured. All in all, Indian health industry is a buoyant sector with lots of potential and scope for expansion.