’Tata AIG’s retail health business to grow 30% CAGR over next 2-3 years’

Mumbai: After growing at around 44% for the last five years, Tata AIG General Insurance’s retail health business is expected to grow at least 30% for the next 2-3 years, according to Pratik Gupta, senior executive vice president & head– Agency.

“Retail health front, last five years we had CAGR growth of about 44%. Next three years we expect at least 30% plus growth from here,” said Gupta adding that the overall health portfolio currently accounts for about 21% of their premium.

This growth, driven by expansion in the distribution network and introduction of new plans and riders, will help take the share of the company’s retail health business to 60% of the overall portfolio from around 50% currently, executive vice-president Rajagopal Rudraraju said at the sidelines of an event.

It will also help the insurer gain market share from its current level of about 8%, he said. He added that while the insurer is the market leader in most segments it operates in, health insurance was the only segment where the company was lagging peers in terms of growth which it is now trying to rectify.

Health business growth

Till about 8 years ago, the health business of the insurer was smaller than personal accident and travel insurance but has today grown ten-fold on the back of a small base and the company strengthening its agency distribution channel for this line of business over the last few years, Rudraraju said.

“We want to become the number one general insurer and for that we can’t ignore health,” he said, adding that of the over ₹20,000 crore assets under management, accidental insurance and health cumulatively account for around ₹5,000 crore whereas travel insurance comprises 40% of the business.

“We are focused on driving expansion across India, particularly in Tier-II and Tier-III cities, where healthcare access and awareness are rapidly increasing. By scaling up our network of branches, agents, and hospital partners, we aim to make quality healthcare more accessible to millions, supporting our projected growth in health insurance,” Gupta said adding that currently 40% of the business comes from tier-III and beyond cities compared with 20% about 4 years ago.

The company plans to expand its agent network to 150,000 from 92,000 over the next two years and invest in 1,000 employees to strengthen its health distribution network. The company’s health insurance segment currently contributes 21% to its overall Gross Written Premium (GWP).

New riders

The event was to announce the launch of five new riders offering over 60 benefits by the general insurer. The riders are designed to provide customized protection, addressing emerging health concerns and lifestyle changes, the company said. The riders include cover for mental well being, women-related solutions under ‘EmpowerHer’, OPD Care, ‘CanCare’ for cancer treatment and monitoring, and Flexi Shield.

One of the riders also offers inflation protection through CPI-linked increase in total sum assured of the policy, Rudraraju said adding that this is to combat the significant medical inflation seen in hospitalisation and treatment costs in the post covid period. Accordingly, where the average sum insured in the pre-covid period was ₹3.3 lakh, it has now gone up to ₹7.7-10 lakh, he said.

Accordingly, the average sum insured has now gone up to ₹7.7-10 lakh, while in the pre-covid period it was ₹3.3 lakh, he said.

Tata AIG has a network of over 11,700 hospitals across 220 locations in India, representing a 64% increase in the last 18 months. The OPD network includes over 5,000 listed doctors and 3,000 plus diagnostics providers, supported by a robust teleconsultation service in over 10 languages.

Cashless claims

Rudraraju said that the idea is to ensure that the things like screenings and regular check-ups or tests and preventive care become a service offered by the insurer at partner hospitals without the need for even cashless claims.

As such, utilisation of cashless claims increased to 76.95% in FY25 (so far) from 67.7% in FY23, the company said, adding that 96% of the cashless claims were processed within four hours. Of the remaining 23% reimbursement claims, 58% were settled via digital channels, the company said, adding that 85% of the reimbursement claims were settled within five days.

The company aims to target 100% through cashless anywhere in the coming years, Gupta said, adding that the settlement level for the insurer, in terms of the value of claims settled, is much higher than the industry average at around 90% due to the nature of products, in-built services offered under the cover and the company’s intent to settle claims.