Health insurance biz may not fit with life insurers

Chennai: Health insurance is a complex and high engagement product and may be a challenging business for life insurers, said Kotak Securities Ltd in a report.

The report was referring to a news report about a committee set up by the Insurance Regulatory and Development Authority of India (IRDAI) may recommend allowing life insurers to sell indemnity (simply expense reimbursable) health insurance policies.

As per current regulations, life insurance companies are permitted health benefit/lumpsum but not indemnity products. Life insurers are interested in the well being of its life policyholders, and hence there may be a synergy between life insurance policy and a health insurance policy. "Health insurance is synergistic to retail term policies. However, health is a complex and high engagement product. It may be challenging for life insurance companies to scale up health in the immediate term; SAHIs (Standalone Health Insurers) will likely continue to gain market share in the interim," Kotak Securities said.