Medical insurance is growing at a clip of 30% a year but further opening of the sector to foreign direct investment and a tariff-free regime may well provide a booster dose.

Until about five year ago, PSUs were offering health insurance as part of their product portfolio under the brand name Mediclaim. With the government opening up the sector to private players, such companies as ICICI, Lombard, Bajaj Allianz, Royal Sundaram and Aviva have joined the fray. "There is a lot of potential in this sector and we ourselves have seen more than 100% growth in the past three years," says Santosh Balan of Bajaj Allianz.

Many healthcare insurance specialist organisations in the US and other countries are looking at India as a potential market and want the FDI norms relaxed. A working committee on health insurance has recommended increasing FDI to 51% from 26% and bringing down the capital base from Rs 100 crore to Rs 50 crore.

Electronic data capturing, accreditation of healthcare providers and standardization of prices are the other factors which are expected to further help the sector. It is anticipated that the coming of specialist health insurance companies will fuel the need for quality healthcare. With escalating, medical costs and a huge consumer base seen in the rural section, medical insurance is perhaps on an upswing.

(Ref : The Economic Times dated February 28, 2006)