The increases are likely to be gradual and implemented at renewal cycles, but the direction of pricing remains firmly upward.
Staggered hikes across policy types
Sarita Joshi, Head of Life & Health Insurance at Probus, said insurers are already revising premiums in a staggered manner, with increases playing out over the next 12–18 months.
“Broadly, we are talking about 10–15%, though it will vary based on age, location, sum insured and claims history,” she said, adding that senior citizens and metro-based policyholders may see higher revisions.
Arun Ramamurthy, co-founder of Staywell.Health, also expects a similar trajectory, with most policies, especially family floaters, senior citizen plans and higher sum insured covers, likely to see 10–15% increases over the next 6–12 months.
Hari Radhakrishnan, expert at the Insurance Brokers Association of India (IBAI), said premium hikes are likely in both the near and long term, driven not just by immediate inflationary pressures but also structural factors such as the ageing population.
Rajendra Upadhyay, Chief Growth Officer at Choice Insurance Broking India, described the trend as a “structural pricing reset”, with brokers advising clients to expect annual premium increases of 10–15% over the next two to three years.
Medical inflation at the core
A key driver behind these revisions is medical inflation, which experts estimate at 14–15% annually, significantly higher than overall inflation.
Joshi attributed this to rising hospital charges, increased use of advanced treatments and diagnostics, and a structural increase in claims frequency post-pandemic.
“This level of medical inflation is not sustainable in the long run, but without a material change in costs, some premium increase is hard to avoid,” she said.
Radhakrishnan pointed to multiple cost drivers, including the rapid growth in the senior citizen population, higher incidence of lifestyle diseases such as cardiac conditions and cancer, and increasing reliance on private healthcare due to gaps in public health infrastructure.
He also highlighted rising input costs, including pharmaceuticals, advanced procedures and specialist fees.
Ramamurthy said both the frequency and severity of claims have increased, driven by chronic illnesses and more advanced procedures, adding that rising costs of hospital rooms, consultations, diagnostics and prescriptions are feeding directly into premiums.
Shashi Kant Dahuja, Executive Director & Chief Underwriting Officer at Shriram General Insurance, said higher healthcare utilisation post-pandemic and a shift toward comprehensive care have further pushed up claims.
He noted that healthcare costs are rising due to “more expensive treatments, increased incidence of chronic diseases, higher claims frequency, and a shift toward advanced care.”
Industry data cited by Upadhyay shows claims ratios crossing 90% in recent years, indicating significant pressure on insurer profitability and reinforcing the need for repricing.
Rising costs already visible
The impact of these trends is already visible in policy pricing.
According to industry estimates shared by Upadhyay, individual health premiums have risen 23% between FY23 and FY25, while the average cost of a family floater policy has increased from around ₹15,000 in 2021 to over ₹22,000 in 2025, an increase of roughly 46%.
He also noted that India’s medical inflation, at around 14% annually, is among the highest in Asia.
Sustainability remains a concern
Experts caution that sustained double-digit medical inflation poses long-term challenges for both insurers and policyholders.
Joshi said insurers are responding through tighter underwriting, renegotiation of hospital rates and a greater focus on preventive healthcare. Ramamurthy added that insurers are investing in wellness programmes, digital claims processes and fraud control to manage costs.
Dahuja said the industry is focusing on cost management strategies, network optimisation and preventive healthcare initiatives to keep insurance accessible, even as premiums are adjusted to reflect rising claims.
Customer behaviour begins to shift
Higher premiums are also starting to influence policyholder behaviour.
Radhakrishnan said anecdotal evidence suggests non-renewals and “buying down” of coverage, particularly among senior citizens and middle-aged customers facing affordability pressures.
He added that market growth appears to be driven more by premium increases than by new customer additions.
Joshi expects customers to respond by opting for lower sum insured, higher deductibles or simpler plans, though she does not foresee a sharp drop in renewals due to increased awareness of health risks.
Ramamurthy said customers may delay purchases or choose more basic policies, but noted that rising costs are also prompting awareness of the need for adequate coverage.
Dahuja warned that such shifts could lead to underinsurance, exposing policyholders to higher out-of-pocket expenses during medical emergencies.
Upadhyay pointed to early signs of this trend, including coverage downgrades, plan switching and policy lapses among price-sensitive households.
Data cited by him indicates that while a majority of policyholders are seeing moderate increases, a smaller segment—particularly older customers—are facing hikes of over 30%, leading to more significant behavioural changes.
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