As health insurance premiums rise and policyholders increasingly seek to port their policies in search of better service and coverage, insurers are balancing customer acquisition with prudent underwriting. HDFC Ergo drew attention recently after some policyholders reported being offered portability subject to deductibles.
In an interview with Mint, Parthanil Ghosh, managing director and chief executive of HDFC Ergo General Insurance, discusses the insurer's approach to portability, deductibles and underwriting, while outlining plans to expand coverage for higher-risk customers, improve affordability and contribute to the industry's goal of Insurance for All by 2047.
HDFC Ergo appears to have prioritized underwriting discipline over aggressive volume growth. While that may protect profitability, what is the strategy for developing products for riskier customer segments that are often excluded from insurance altogether?
We do not view underwriting discipline and inclusive growth as mutually exclusive. Health insurance carries an embedded promise of lifelong renewability, and our underwriting enables us to price products according to the underlying risks. We are actively expanding the boundaries of insurability while focusing on sustainable, long-term growth rather than short-term volumes. Bringing underserved segments into the insurance fold remains a key priority.
For instance, we recently launched our ABCD (asthma, blood pressure, cholesterol and diabetes) rider, which provides protection against four common ailments. We have also designed products for the missing middle, small business owners, gig workers and people employed in the informal sector. Individuals with these conditions can purchase coverage of ₹3 lakh for a premium of about ₹12 a day, with a waiting period of only 30 days.
At the same time, we continue to strengthen our core offerings. Our recently launched Optima Secure+ product includes an inflation protector feature that ensures a customer's sum insured does not lose value over time and remains aligned with rising medical inflation. Our approach is not limited to the healthiest lives. We also provide coverage to impaired lives after carefully evaluating the associated risks and long-term sustainability.
HDFC Ergo appears to have introduced an underwriting condition for portability, under which some policyholders may need to opt for a deductible if they wish to port their policies. Is that correct?
Portability is one of the most policyholder-friendly reforms introduced in the industry, and we strongly support it. For us, being pro-consumer does not simply mean offering the lowest premium or acquiring the highest number of customers. It means ensuring customers receive sustainable products and reliable claims service over the long term. Our focus is therefore on ensuring that incoming portability business does not adversely affect the risk pool of existing policyholders. This approach is reflected in the nearly 50% growth in our portability business, which crossed ₹500 crore in FY26.
We do not view deductibles as a barrier but as an effective tool for long-term affordability. In an environment of steep medical inflation, consumers need options to manage premium outgo. In certain segments, we encourage customers to opt for deductibles because they can significantly reduce premium costs while allowing customers to absorb a predictable portion of their healthcare expenses.
Even in fresh business, we often recommend deductibles. A deductible of ₹25,000 can lower premiums by roughly 20%. As premiums rise over time, the discount generated by the deductible continues to apply while the deductible amount remains fixed, making it relatively smaller in real terms. By using deductibles strategically, we aim to provide access to HDFC Ergo's claims service while ensuring premiums remain sustainable for customers and viable for the broader risk pool.
The industry has embraced the goal of Insurance for All by 2047. What are the three biggest barriers preventing India from achieving that vision?
The regulator's vision of Insurance for All by 2047 is a defining mission for the industry. To make it a reality, three key barriers must be addressed.
The first is awareness. Interestingly, the recent removal of goods and services tax (GST) on insurance premiums generated significant public attention and led to a surge in business, highlighting how awareness alone can influence insurance adoption.
The second is trust and transparency. Many consumers continue to ask a basic question: will my insurer pay the claim when I need it? The industry's trust quotient can improve only through consistent claims servicing and greater transparency.
The third challenge is affordability. Medical inflation continues to drive up healthcare costs, and insurers must find ways to keep health insurance accessible and affordable for a much larger segment of the population.
What are your thoughts on insurance CEOs' compensation being linked to claims, grievances and customer trust?
This is a welcome move that will make insurers more accountable to their customers. Greater transparency will certainly strengthen trust in insurance.
At HDFC Ergo, we already follow high standards of transparency. Our claims performance is displayed on our website, reinforcing our accountability to customers.
How can data disclosure be made more transparent at the industry level?
The insurance industry already operates with a high degree of transparency, with detailed disclosures mandated across product features, pricing, claims processes, related data and servicing standards.
Transparency can be enhanced further by standardizing key servicing and claims KPIs that all insurers must disclose, publishing industry-level data on medical cost inflation and health insurance premium increases, and clearly outlining the steps policyholders should take to purchase appropriate coverage and avoid mismatched expectations at the time of claims.
What are the key metrics that should be disclosed more prominently?
Three metrics the industry could consider disclosing more prominently are:
Claims servicing records, including claims payout ratios and claim approval turnaround times.
Profit after tax and solvency metrics, indicating insurers' ability to meet claims obligations.
Scale-of-operations data, including the number of policies issued, claims paid and geographic reach, providing insight into servicing capabilities.
In addition, insurers could disclose data on fraudulent claims, including the number detected and repudiated, the nature of the fraud and the value of such claims.