While the health insurance premium for non-life insurers shot up 55 per cent to Rs 4,969 crore in 2007-08, motor insurance posted a more modest 20 per cent growth during the year. The industry as a whole grew just 12.5 per cent during the year compared with Rs 24, 998.4 crore in 2006-07.

According to an IRDA report card, Reliance General Insurance — with nearly 7 per cent market share — has booked the highest jump in health insurance premium. It collected Rs 257.62 crore, up 307 per cent as against Rs 67.69 crore in 2006-07. The biggest non-life insurer, state-owned New India Assurance, collected nearly Rs 114 crore, 58 per cent more than the previous year. For other major players such as National Insurance, United India and Bajaj Allainz too, the health business premia rose by 105 per cent, 60 per cent and 53 per cent, respectively.

"With the fall in the prices of engineering and fire premia, insurance companies are now focusing more on the retail lines – motor and health," says T Ramalingam, head (underwriting), Bajaj Allianz General Insurance. "Before de-tariffing, group health insurance was bundled with property insurance and offered at a subsidised rate. With de-tariff kicking in, insurance premium for property has come down and medical insurance costs has risen. This has further led to a rise in premium collection for health insurance."

The health insurance sector in the country has witnessed rapid growth since insurance liberalisation in 2001. The premium has grown from Rs 774 crore in 2001, to Rs 3,300 crore in 2006-07. The sector is expected to maintain momentum and grow at a CAGR of 40 per cent in future.

"De-tariffing has led to hectic competition and at present market-driven rates prevail. Owing to this, everybody is slowly shifting to the more stable segments, i.e., the retail segment — motor and health. Health segment is growing fast at the rate of more than 30 per cent. This 30-35 per cent growth rate is expected to continue for the next two-three years," says M Ramadoss, chairman and managing director Oriental Insurance.

Motor insurance is further classified into own damage and third-party. While premium for own damage motor insurance saw a sluggish growth at 8 per cent, it is the third party motor insurance that booked a 50 per cent rise in premium collection. “The spurt in the premium collection for third party motor insurance is primarily due to the creation of pool from April 1, 2007,” says Rahul Aggarwal, CEO of Optima Insurance Brokers. “The move has encouraged a lot of small companies for third party underwriting.”