India’s fast-expanding health insurance market is delivering record growth, but uneven claims behaviour and limited consumer-facing data are raising fresh questions about trust, transparency, and informed choice
India’s health insurance sector is undergoing rapid expansion, and the latest (2024-25) Insurance Regulatory and Development Authority of India (IRDAI) Annual Report shares some useful data on this explosive growth. Health is now the single largest segment within non-life insurance, contributing 41.42 percent of gross direct premiums in 2024–25. In absolute terms, health insurance premiums underwritten by general and health insurance companies reached INR 1,17,505 crore in 2024–25, a 9.19 percent rise over the previous year. The total health premium in 2014-15 was a much lower INR 20,096 crore. Indian health insurance companies issued 2.65 crore health policies covering 58.20 crore lives in 2024–25, doubling the numbers from 2014-15 (Figure 1).
Health is now the single largest segment within non-life insurance, contributing 41.42 percent of gross direct premiums in 2024–25. In absolute terms, health insurance premiums underwritten by general and health insurance companies reached INR 1,17,505 crore in 2024–25, a 9.19 percent rise over the previous year.
Source: Compiled by the author from IRDA (2026)
There have been many recent policy measures furthering the expansion of health insurance in the Indian market. In order to enhance the market penetration of individual policies, the GST rate on individual health insurance premiums was reduced to zero effective September 2025. It is expected that individual health insurance, which currently accounts for just 10.3 percent of the overall business (Figure 2), will get a boost as a result. The broader legislative direction is equally ambitious, with the parliament passing the Sabka Bima Sabki Raksha insurance-law amendments in December 2025, allowing 100 percent FDI in insurance, and triggering a range of reform measures with the aim of "Insurance for All by 2047". The government has also shared plans to launch a consumer-centric portal, Bima Sugam, framed as a step towards a more integrated, digital, and consumer-friendly insurance marketplace.
Source: Compiled by the author from IRDA (2026)
Yet, as Monika Halan argued in December 2024, despite enviable progress in terms of business size, policyholders’ experience in health insurance has been far from satisfactory. The author posited that, often, the moment of greatest vulnerability is also the moment when the insurance contract becomes adversarial. Public-sector insurers appeared markedly more consumer-friendly on claims than private firms, and a handful of private health insurers stood out for particularly poor claims behaviour, according to the analysis. This article examines an update, focusing on a specific metric from the latest IRDAI annual report, the Incurred Claims Ratio (ICR), across different business categories to better understand the consumer experience in the health insurance industry.
ICR is the ratio of net incurred claims to net earned premium in a given period, indicating how much of an insurance company’s premium income is absorbed by claims. At the aggregate level, the health insurance business ICR for general and health insurance companies stood at 86.98 percent in 2024–25. However, this seemingly stable and high figure appears reassuring only until one examines how unevenly the burden is distributed across insurer types and business categories. When compared across types of business, ICR is lowest in the individual health insurance segment (Figure 3), where households feel the premium pinch most directly, indicating the widest headroom between premiums and incurred claims.
Source: Compiled by the author from IRDA (2026)
A comparison of the latest ICR across types of insurance companies shows that Halan’s findings still hold (Figure 4). Public sector insurance companies reported an ICR of 100.59 percent for their health insurance business, while private sector general insurance companies reported 87.59 percent. At the same time, standalone health insurance companies recorded a much lower ICR of 68.73 percent, implying a larger gap between premiums earned and claims incurred. While the public sector ICR may be unsustainable, this stark variance between categories validates the earlier concern that some industry players may systematically behave in ways that feel adversarial to customers, especially when premium increases continue in parallel.
Source: Compiled by the author from IRDA (2026)
Often, a health claim is not denied fully, yet the protection promised at purchase is materially diluted at the point of care. If the sector is to continue growing, it needs to rebuild trust and empower the customer to make informed purchase decisions. Recent measures by the government can go a long way in facilitating this process, provided a public-facing element of consumer education is integrated into it. The IRDAI Annual Report 2024-25 describes the Insurance Information Bureau (IIB) as a platform for real-time industry data exchange. It has emerged as a major platform for real-time data exchange among insurers, enabling predictive analytics and real-time fraud mitigation support.
Given the complex challenges in the health insurance market, including mis-selling and misrepresentation of performance data by insurance companies, there is a need to empower the consumer with timely and relevant information.
The IIB has a history of providing valuable consumer-facing analytics that inform the public about various aspects of the health insurance industry. That function, however, has eroded over time, and the latest analytical report publicly available on the IIB portal dates back to 2019-20. There is a publication titled Critical Illness Report 2023-25 on the portal’s publications page, which links to a much older report. Given the complex challenges in the health insurance market, including mis-selling and misrepresentation of performance data by insurance companies, there is a need to empower the consumer with timely and relevant information.
To regain consumer trust in individual health insurance products in the Bima Sugam era, India needs a revitalised, customer-facing analytics layer on the ambitious portal, possibly provided by IIB. It should publish periodic, standardised reporting on key variables, including the ICR by product class; hospitalisation across socio-economic, age, and geographical categories; grievance redressal timelines; and complaint outcomes. With access to analyses on the performance of different health insurance providers, consumers will be able to make informed decisions based on the proven track records of health insurance companies, rather than relying solely on advertisements.
Oommen C. Kurian is Senior Fellow and Head of the Health Initiative at the Observer Research Foundation.
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Oommen C. Kurian is Senior Fellow and Head of the Health Initiative at the Inclusive Growth and SDGs Programme, Observer Research Foundation. Trained in economics and ...
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