Plum, India’s leading insurtech platform, today launched its flagship report, The State of Employee Benefits 2024, observing that Group Health Insurance, growing at a CAGR of 25% (thereby being the fastest growing segment in health insurance), has helped provide an invaluable safety net to over 10 crore net new Indians in just the past three years.

 Post-COVID, Group Health Insurance has emerged as the key driver of health insurance penetration in India. Group Health Insurance now covers nearly 20cr Indians, more than doubling between FY20 and FY23 even as other categories such as Personal Health Insurance, have barely grown over the same period. As of FY24, Group Health Insurance accounts for over 50% of the Health Insurance Premiums in India and has emerged as the single largest category in Non-Life Insurance in India.

If we dig deeper, while retail insurance products tend to grab the headlines time and again, data shows that as of FY23, only 5.3cr people had availed of any form of retail health insurance. Adjusting for household size, that’s approximately 2.5cr households and probably a significant overlap with the relatively wealthy taxpayer base. Contrast that with Group Health Insurance, where many companies choose to only cover the employed workforce i.e. breadwinners, the relative reach from a household perspective is probably 4x that of retail health cover. This number would be even higher if we include the coverage under the Government of India’s Employee State Insurance (ESI) scheme.

This number is significant as ~40% of the country’s total population remains devoid of insurance, forming the ‘missing middle’. In 2020, the IRDAI went as far as to issue a circular for all employers to provide insurance cover for their employees. This was at the time when COVID struck, and in hindsight, seems to mark a turning point for awareness of the health and insurance industry.

Yet, there remains a lot of work to be done. Most Indians are only a single illness away from bankruptcy. According to the Household consumption Survey 2022-23, an Urban Indian family roughly spends 5% of their income on healthcare which could leave a deep dent on their earnings. In fact, it is estimated that every year, approximately 50-60 million Indians are pushed into poverty due to unplanned, unforeseen and rapidly inflating medical expenditures. India’s total OOPE is ₹3,08,727 crores (1.54% of GDP) as per National Health Accounts 2019/2020. With only ~15% of total healthcare expenditure in India covered by market-driven insurance solutions, the country has one of the highest out-of-pocket spending – and an enormous unmet need in healthcare, despite government interventions such as the Ayushman Bharat Mission.

Unveiling Plum’s flagship “The State of Employee Benefits 2024”, Abhishek Poddar, Cofounder and CEO said, “Indian companies no longer look at insurance as a mandatory must-have. The future of modern benefits is to provide for employees and their families in a holistic manner, combining insurance benefits with preventive and primary health care. There is a 2x increase in companies providing flexible benefits and a 110% increase in investment on primary healthcare. That said, the median sum insured has also increased 60% from ₹3L to ₹5L of the 4500+ policies analysed.* There is clearly a more thoughtful and more sustained adoption of Group Health Insurance across India Inc.”

The growth in Group Health Insurance is propelled by the following factors:

●   IRDAI is making insurance coverage more comprehensive - treatment like oral chemotherapy, robotic surgeries, stem cell therapy, deep brain simulation, balloon sinuplasty and more can now be covered under group health from day 1.

●   The fact that existing diseases can be covered from day 1 as part of Group Health, makes it a lucrative option for employees and their families. Top claims include: delivery and postnatal complications (12%), infectious and viral diseases 8%), cancer (5%).

●   40% of total claims have been made for employees’ parents (as Group Health Insurance has no waiting periods). Very often, this is the primary way senior citizens get covered.

(Disclaimer: Plum recommends that the populace doesn’t rely solely on employer sponsored insurance, a holistic and comprehensive group health policy should be complemented with a retail health and life plan).

Further, by redefining what ‘benefits’ mean (benefits = modern insurance cover + preventive and primary health initiatives like telehealth, health assessments and health camps), the report found that 8% of employees covered by Plum* have raised an insurance claim, while 30% have booked a telehealth consultation. Some of employees’ most prevalent illnesses being: oral disorders, headache disorders, dietary and iron deficiency, gynaecology related ailments, vision ailments that are a combination of OPD and hospitalisation that may not be covered under conventional retail covers.

 As of 2023, India has over 470 million people employed and by insuring them (including their families), insurance penetration can increase by 2x at least. This tells us that the group health insurance story has just begun.

The State of Employee Benefits is Plum’s annual benefits report card gleaning over 4500 policies to draw insights on how companies (2-1000+ employees), design and define their benefits plan. This year, Plum has published edition 2 - go here for a deep dive.