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Niva Bupa hikes premiums 8-9% annually to keep pace with medical inflation: CFO Vishwanath Mahendra

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Niva Bupa hikes premiums 8-9% annually to keep pace with medical inflation: CFO Vishwanath Mahendra

Niva Bupa hikes premiums 8-9% annually to keep pace with medical inflation: CFO Vishwanath Mahendra

Niva Bupa Health Insurance is prioritising profitable growth even as medical inflation continues to push up the cost of health cover, with the insurer raising premiums by around 8-9% annually and expecting this trend to continue. CFO Vishwanath Mahendra said smaller annual increases are preferable to sharp hikes every few years, while the insurer targets a 98-99% combined insurance service ratio by FY29 and mid-to-high teens ROE.

Niva Bupa Health Insurance is seeing strong growth, with retail health premium rising 47% year-on-year in Q1, significantly ahead of the industry’s 32% growth. Overall premium grew 32%, while profit after tax nearly doubled 93% to Rs 138 crore, even as the insurer remained selective in group health amid an unfavourable pricing environment. But the growth is coming against a persistent challenge for the health insurance industry: rising medical inflation and the resulting pressure on premiums. Niva Bupa CFO Vishwanath Mahendra said the insurer has already raised premiums by 8-9% annually, and expects this to continue as medical costs rise, arguing that smaller, regular hikes are preferable to a sharp increase every few years. Advt

Mahendra also said Niva Bupa is targeting profitable growth, with a medium-term goal of a 98-99% combined insurance service ratio by FY29 and mid-to-high teens ROE, while its retail market share has crossed 11%. Here are the edited excerpts from the interview: Q. By how much has Niva Bupa raised its premiums this year to tackle rising medical inflation.


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