TATA AIG General Insurance announced that small cities have emerged as a key growth engine for the company’s health insurance business in the post-COVID era, with nearly 40% of its health insurance revenue now coming from tier 3 and 4 cities.

The company attributes this growth to a combination of factors, primarily the rise in health awareness triggered by Covid-19 pandemicalong with a more focused expansion strategy in the regions served.

While this trend has been magnified in the post-Covid era, it reflects a broader pattern of increasing adoption of health insurance in smaller cities, where there has been a noticeable increase in awareness and demand for coverage.

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Pratik Gupta, senior executive vice-president and agency head at TATA AIG, noted that before the pandemic, many non-life insurance companies, including Tata AIG, were not as focused on these regions. “

COVID certainly played a role in raising awareness, but our increased focus on these areas was a major factor. We have now expanded our presence to over 700 districts, which has been key to this growth,” he said.

He also discussed the recent regulatory changes introduced by Insurance Regulatory and Development Authority (IRDA)which contributes to increased customer satisfaction and more affordable health insurance.

One of the most significant changes is the removal of age and pre-existing disease (BP) restrictions for obtaining health insurance, although coverage may vary. “This has been a game changer for the industry and we are seeing a significant increase in non-cash claims as a result of these changes,” he added.

Rajagopal Rudraraju, executive vice president and national head – Accident & Health Claims at Tata AIG, pointed out that motor insurance, which accounted for about half of the company’s business, has now been overtaken by health insurance.

“Healthcare is now about 40% of our business. While premiums in the health segment are increasing and more customers are signing up, growth in motor insurance has slowed and commercial insurance premiums have declined. Together, motor and health now account for over 70% of our total business,” he said.

TATA AIG, which has a market share of about 6%, is expected to maintain strong double-digit growth in its gross written premium (GWP) for the current fiscal year. The company estimates its FY25 GWP to reach between ₹ 18,000 and ₹ 20,000, up from ₹ 15,423 in FY24.

“We have seen strong growth in all key segments – health, motor and even commercial lines. This year’s performance is in line with the steady growth we have sustained over the years,” said Gupta.

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