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.”