India's health insurance sector is forecast to expand from US$15.99 billion in 2024 to approximately US$38.2 billion by 2032, based on a compound annual growth rate (CAGR) of 11.5%, according to a study from SkyQuest.
This projected expansion underscores an upward trend in the demand for health-related financial protection amid evolving healthcare dynamics.
A combination of factors – including increasing treatment costs, evolving consumer expectations, and broader access to insurance products – is accelerating market expansion.
The industry's momentum is largely being driven by the need for risk mitigation against unplanned medical expenses.
India’s expanding middle class is playing a pivotal role in reshaping the insurance landscape. As household incomes increase, more individuals are investing in personal and family health insurance.
While employer-sponsored group health insurance plans remain widely adopted for their affordability and broad coverage, individual policies are gaining traction for their flexibility and customisation.
Group insurance remains the dominant category due to economies of scale, but individual plans are seeing rising uptake among consumers seeking personalised coverage options.
Health insurance offerings are segmented by service provider, type of policy, network configuration, and user category.
Private providers dominate over public institutions in market share, driven by product variety and enhanced service delivery.
Hospitalisation coverage continues to be the most common type of policy, covering inpatient care and surgical expenses.
Meanwhile, critical illness insurance is becoming increasingly popular, offering lump sum payouts for serious conditions such as cancer or cardiovascular disease – coverage that can also offset income disruptions.
The National Capital Region (NCR), which includes Delhi and nearby cities, remains the largest regional market for health insurance, supported by higher income levels and concentration of corporate clients.
Southern states like Tamil Nadu and Karnataka, however, are exhibiting the fastest growth, buoyed by improvements in healthcare delivery systems and growing public awareness.
In 2023, India’s insurance regulator, the IRDAI, implemented changes aimed at improving accessibility. Reforms included relaxed rules for covering older individuals and those with pre-existing medical issues, a move that stakeholders expect will improve insurance penetration.
India’s health insurance space is marked by competition between standalone health insurers and general insurance firms that include health coverage in their offerings. Key players include HDFC ERGO, ICICI Lombard, and Star Health, among others.
Strategic developments such as mergers and brand repositioning have reshaped the competitive field – for instance, ICICI Lombard’s integration with Bharti AXA and the rebranding of Religare to Care Health Insurance.
Technology is increasingly central to service delivery. Many insurers are adopting digital tools for online enrolment, claims submission, and virtual consultations – helping to streamline customer experiences and enhance operational efficiency.
Research from GlobalData indicated that the health insurance segment is expected to account for 11% of India’s total insurance market by 2028, up from 9.5% in 2023.
The market value is projected to rise to US$23.8 billion by 2028, reflecting a CAGR of 12.8% from 2024.
