April 13, 2024

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Galaxy Health gets nod to launch health insurance business, IRDAI also okays setting up of insurance e-marketplace

3 min read
The Insurance Regulatory & Development Authority of India (IRDAI) in a recent meeting okayed the issuance of a Certificate of Registration to Galaxy Health and Allied Insurance Company Limited, authorizing it to conduct health insurance operations within India. This marks the sixth registration approval within approximately a year across various segments including life, non-life, and health insurance. Notably, earlier this year, IRDAI granted Narayana Health in-principle approval to establish a health insurance enterprise in the country.

Galaxy Health and Allied Insurance Company Limited is spearheaded by V Jagannathan, the founder of Star Health and Allied Insurance Company, has emerged as the latest addition to the Indian health insurance market. ET had earlier reported that S Prakash, the former managing director of Star Health, has joined Jagannathan in this endeavor, as detailed by ET.

Jagannathan’s decision to venture into the health insurance sector comes after his successful tenure at Star Health, which he established in 2006. His leadership culminated with the company’s successful listing before his departure in June 2023. During his stewardship, Star Health witnessed a remarkable turnaround, achieving a net profit of Rs 618 crore and an underwriting profit of Rs 204 crore in the fiscal year 2022-2023, a notable improvement from previous losses. With an extensive network comprising over 13,000 hospitals and a strong presence in southern, western, and northern India, Star Health has established itself as a prominent player in the industry.

Health insurance stands out as the fastest-growing segment within the general insurance domain, with projections indicating a compounded annual growth rate (CAGR) of 23% until 2030. The heightened awareness surrounding health insurance, particularly in the aftermath of the Covid-19 pandemic, has further propelled its growth trajectory, contributing significantly to the sector’s Gross Direct Premium Income (GDPI). Analysts anticipate that health insurance contributions will surpass ₹1 lakh crore in the current fiscal year.

In tandem with the registration of Galaxy Health and Allied Insurance Company Limited, IRDAI has unveiled a series of new regulations aimed at fortifying the regulatory framework governing the insurance industry. These regulations encompass diverse areas such as policyholder protection, rural and social sector obligations, electronic insurance marketplaces, foreign reinsurance branches, as well as registration, actuarial, financial, investment, and corporate governance domains, as highlighted in a recent press release by the regulator.

One notable initiative introduced by IRDAI is the establishment of an electronic marketplace akin to ONDC (Open Network for Digital Commerce), named Bima Sugam. This digital platform is envisioned to serve as a public infrastructure facilitating various insurance-related activities, including product showcasing, customer service, and policy portability. Irdai Chairman Debasish Panda likened the introduction of Bima Sugam to a transformative moment akin to the advent of Unified Payments Interface (UPI) in the banking sector. The platform aims to foster collaboration and transparency across the insurance value chain, benefitting stakeholders such as customers, insurers, intermediaries, and agents.By streamlining regulations and fostering technological innovation through initiatives like Bima Sugam, IRDAI endeavors to nurture a vibrant and inclusive insurance ecosystem, catering to the evolving needs of both consumers and industry participants.

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