TATA AIG General Insurance has announced that small towns have emerged as a key growth driver for the company’s health insurance business in the post-COVID era, with nearly 40 per cent of its health insurance revenue now coming from Tier 3 and Tier 4 cities.

The company attributes this growth to a combination of factors, primarily the increased health awareness triggered by the COVID-19 pandemic, along with a more focused strategy to expand into underserved regions.

While this trend has been amplified in the post-COVID period, it reflects a broader pattern of growing health insurance adoption in smaller towns, where there has been a noticeable rise in awareness and demand for coverage.

Pratik Gupta, Senior Executive Vice President and Head of Agency at TATA AIG, noted that before the pandemic, many general insurance companies, including Tata AIG, did not focus as extensively on these regions. “

COVID certainly played a role in raising awareness, but our increased focus on these areas has been a major factor. We’ve now expanded our presence to over 700 districts, which has been critical to this growth,” he said.

He also discussed the recent regulatory changes introduced by the Insurance Regulatory and Development Authority (IRDA), which are helping to enhance customer satisfaction and make health insurance more accessible.

One of the most significant changes is the removal of age and pre-existing disease (PD) restrictions for obtaining health insurance, although coverage may vary. “This has been a game-changer for the industry, and we are seeing a significant rise in cashless claims as a result of these changes,” he added.

Rajagopal Rudraraju, Executive Vice President & National Head – Accident & Health Claims at Tata AIG, highlighted that motor insurance, which used to account for around half of the company’s business, has now been surpassed by health insurance.

“Health now makes up about 40% of our business. While premiums in the health segment are rising and more customers are enrolling, growth in vehicle insurance has slowed, and commercial insurance premiums have declined. Together, motor and health now account for over 70 per cent of our total business,” he said.

TATA AIG, which holds a market share of about 6 per cent, is expecting to maintain strong double-digit growth in its gross written premium (GWP) for the current fiscal year. The company projects its GWP for FY25 to reach between ₹18,000 crore and ₹20,000 crore, up from ₹15,423 crore in FY24.

“We’ve seen strong growth across all key segments—health, motor, and even commercial lines. This year’s performance aligns with the steady growth we’ve sustained over the years,” said Gupta.

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