Business Standard

Niva Bupa premium growth may slow down to 25-30% over next 3-5 years: CEO

The health insurer is also planning to come up with their Initial Public Offering (IPO) in financial year 2024-25, though the size has not been decided yet

Niva Bupa

Photo: X @Niva_Bupa

Aathira Varier Mumbai

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Niva Bupa Health Insurance, formerly known as Max Bupa Health Insurance, is expecting its premium growth to slow down to around 30 per cent over the next 3 to 5 years due to a higher base, Krishnan Ramachandran, chief executive officer and managing director of Niva Bupa Health Insurance has said. 

The health insurer is also planning to come up with an Initial Public Offering (IPO) in 2024-25, though the size has not been finalised so far.

During the April-December period of FY24, the gross direct premium of Niva Bupa saw a 40.51 per cent surge to Rs 3,848.14 crore. 

In comparison, the premiums grew at a rate of 42.78 per cent in the April-December period of FY23 to Rs 2,738.71 crore.

“According to estimates, the industry is reckoned to continue to grow at 18-19 per cent over the next 3-5 years. Niva Bupa will be able to grow between 25-30 per cent over the next 3-5 years, assuming similar patterns of buying behaviour and channel mix continue. (The moderation in growth) is a function of base effect and also achieving a 40 per cent growth rate becomes more and more challenging as the company becomes larger,” Ramachandran told Business Standard.

The surging medical inflation is a challenge, and the company has increased its premium on its flagship products.

The standalone health insurer made an upward revision of a minimum of 6 per cent to a maximum of 14 per cent in its rate of premium during the last three years due to medical inflation.

 “Moving into the future, (premium rate revision) is a function of inflation trends and our product performance. At least for this financial year, there will be no further revisions in premiums,” Ramachandran explained.

Going forward, medical inflation in India is expected to decline, and insurers are also discussing the increased medical rates with hospitals as higher premium rates have an impact on the affordability of health insurance.

“I think there will be a reversion to historical patterns of inflation. I think there was a lot of Covid-induced inflation, which in my mind should be moderate. Insurers are already in discussion with hospitals as most of them have revised their rates,” he added.

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First Published: Jan 23 2024 | 8:12 PM IST

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