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The <keyword id="22902068" type="General" weightage="100" keywordseo="health-insurance-sector" source="keywords">health insurance sector</keyword> may face challenges in the coming months, due to <keyword id="20617555" type="General" weightage="20" keywordseo="rising-claims" source="keywords">rising claims</keyword> and increased competition, particularly in the retail sector, highlighted a report by <keyword id="19905137" type="General" weightage="20" keywordseo="Jefferies" source="keywords" meta.keywordsubtype="org" meta.entityname="Jefferies" meta.hostid="153" meta.entityid="Jefferies">Jefferies</keyword>. "Health (approx. 35% of mix) can see pressure in its retail segment from rising claims frequency and elevated competition" the report stated. The report indicated that <keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword>'s <keyword id="22461357" type="General" weightage="20" keywordseo="non-life-insurance" source="keywords">non-life insurance</keyword> sector is experiencing significant shifts, the health insurance segment may face challenges as healthcare costs continue to rise and more consumers claim their insurance, and insurers are grappling with increased payouts. This trend could squeeze margins and put pressure on insurers to find ways to manage costs while remaining competitive in the market. However, for the <keyword id="20224622" type="General" weightage="20" keywordseo="motor-insurance" source="keywords">motor insurance</keyword> segment, the report draws a promising picture and added that it is entering a promising multi-year upcycle. This positive momentum is expected to benefit large private insurers of the motor segment, who are well-positioned to capitalize on these trends. "Initiate on Non-Life Insurers Large private insurers are set to gain from multi-year upcycle in motor (approx. 35% of premium mix) led by <keyword id="21232881" type="General" weightage="20" keywordseo="premiumization" source="keywords">premiumization</keyword> of underlying auto mix and moderating competitive intensity" the report mentioned. The report also added that the motor insurance segment in India is estimated to grow at a compound annual growth rate (CAGR) of 14% over the financial years 2024 to 2027. The key driver behind this growth is the ongoing shift in the automobile market towards higher-value vehicles. Over the past three years, the average selling price (ASP) of passenger vehicles (PVs) has increased by 41%, reflecting a move towards premium segments. This trend is expected to continue, benefiting motor insurance renewals, which account for 60-70% of the motor insurance premium mix. "Motor segment amidst a multi-year upcycle (est. 14% CAGR over FY24-27E) as renewals (60-70% of premium mix) will continue to benefit from the underlying change in auto mix towards premium high-value segments" the report added. Despite these challenges, the report mentioned that the broader non-life insurance market in India remains significantly underpenetrated, with insurance premiums representing only about 1% of the country's <keyword id="19904293" type="General" weightage="20" keywordseo="GDP" source="keywords">GDP</keyword>. This is relatively low compared to global peers, where non-life insurance to GDP ratios range between 2% and 4%. However, the Indian non-life insurance market has shown steady growth, with gross premiums expanding at a CAGR of 12% over the past five years, reaching Rs 2.8 trillion (approximately $35 billion). Notably, the private sector has outpaced the overall market. "India remains an under-penetrated market with non-life insurance to GDP at approx. 1% (vs 2-4% for global peers). Gross premiums have expanded at 12% CAGR over the last 5 years to Rs 2.8tn (approx. $35bn) with the private sector growing faster at 15% CAGR and improving its market share to 68%(from 57%)" said Jefferies in the report. Despite these challenges, the overall insurance market in India remains underpenetrated, offering significant long-term growth potential for insurers who can navigate these dynamics effectively.

Rising claims pose challenge for health insurance sector in India, says Jefferies

ReutersFILE PHOTO: Sanders delivers a speech on "Medicare for All" at George Washington University<ul><li>Health insurance stocks gained Wednesday following Joe Biden's victory over Bernie Sanders during Super Tuesday. </li><li>Biden's delegate wins lessen the chance that Medicare for All, which would virtually eliminate the private health insurance sector, would become a reality.</li><li>Biden's plan would allow people to keep their existing insurance coverage and expand Obamacare.</li><li><a href="https://www.businessinsider.com/">Read more on Business Insider</a>.</li></ul>Health insurance stocks led market gains on Wednesday following Vermont Senator Bernie Sanders' <a href="https://www.businessinsider.com/super-tuesday-democratic-primary-live-results-vote-counts-every-state-2020-3">Super Tuesday</a> performance. The renewed optimism came after former <a href="https://www.businessinsider.com/super-tuesday-democratic-primary-live-results-vote-counts-every-state-2020-3">Vice President Joe Biden won key delegates during Super Tuesday</a> over Sanders. The wins solidified Biden's place as a front-runner in the presidential race and calmed some investors who prefer his more moderate policies to Sanders'. Stocks moved higher Wednesday following Biden's success, rebounding from investor panic around the coronavirus outbreak that roiled markets in recent weeks. The S&amp;P 500 Healthcare Index is up 3.6% on Wednesday, led by a 5% gain in the healthcare equipment and services sub-index, and beating out the S&amp;P 500 index's 1.9% increase. Managed healthcare in particular moved as Biden's victory over Sanders lessens the chance that Medicare for All would become a reality. The ambitious plan would virtually eliminate the private health insurance sector.Biden, however, has blasted Medicare for All and lauded the Affordable Care Act, better known as Obamacare, which he helped pass in the Obama administration. His healthcare plan would expand Obamacare to create an optional federal health plan for those who don't have private coverage, but allow people to keep their existing insurance plans.Here's how much key health insurance stocks gained on Wednesday: <ol><li style="list-style-type: none;"><ol><li>Anthem Inc. (<a href="https://markets.businessinsider.com/stocks/antm-stock">ANTM</a>) - +14% </li><li>Centene Corp. (<a href="https://markets.businessinsider.com/stocks/cnc-stock">CNC</a>) - +12%</li><li>Cigna Corp. (<a href="https://markets.businessinsider.com/stocks/ci-stock">CI</a>) - +11%</li><li>Humana Inc. (<a href="https://markets.businessinsider.com/stocks/hum-stock">HUM</a>) - +11%</li><li>UnitedHealth Group Inc. (<a href="https://markets.businessinsider.com/stocks/unh-stock">UNH</a>) - +10%</li><li>CVS Health Corp. (<a href="https://markets.businessinsider.com/stocks/cvs-stock">CVS</a>) - +6% </li><li>HCA Healthcare Inc. (<a href="https://markets.businessinsider.com/stocks/hca-stock">HCA</a>) - +5%</li></ol></li></ol> <h3>NOW WATCH: <a href="https://www.businessinsider.com/presidential-debate-entertaining-problem-democratic-trump-reality-tv-show-2019-9">How networks treat the Democratic debates like reality TV</a></h3>

Health insurers surge as Bernie Sanders' Super Tuesday defeat dims the prospect of Medicare for All

<div class="KonaFilter image-container display-table"><div><div class="image"></div></div></div><ul class="summary-list"><li>Healthcare has becomes a prominent part of the 2020 presidential campaign, and the healthcare industry's donations to candidates have come under scrutiny.</li><li>Democratic candidate Bernie Sanders has said he <a href="https://www.politico.com/story/2019/07/17/sanders-sanders-drug-insurance-donations-1596818">won't take funds</a> from drugmakers and health insurers and called on other candidates to follow.</li><li>The healthcare sector, which includes drugmakers, health insurers, doctors, and hospitals, has contributed more than $5 million so far towards the many presidential candidates, according to data from <a href="https://www.opensecrets.org/2020-presidential-race">OpenSecrets</a> through the end of June.&#xa0;</li><li>President Donald Trump's re-election campaign was a top recipient of healthcare dollars, and Sanders' campaign ranked in the top five. Read on to see how much every candidate received.</li><li><a href="https://www.businessinsider.com/?hprecirc-bullet" target="_blank" rel="noopener">Visit Business Insider's homepage for more stories.</a></li></ul><a href="https://www.businessinsider.com/category/health">Healthcare</a> is a major issue in the upcoming 2020 presidential election.It's also become a flashpoint when it comes to presidential campaign contributions, with longtime Vermont Democratic Senator Bernie Sanders saying he won't take donations from the pharmaceutical and health insurance industries and calling on other candidates to follow.&#xa0;So far, the healthcare sector has contributed more than $5 million in total towards the <a href="https://www.businessinsider.com/everyone-who-is-running-for-president-in-2020-2019-1">many presidential candidates</a>, from President Donald Trump's re-election campaign all the way to his Republican challenger, former Massachusetts governor William Weld, according to new data from the nonprofit Center for Responsive Politics's&#xa0;<a href="https://www.opensecrets.org/2020-presidential-race">OpenSecrets</a> covering the campaign season through the end of June.<div class="KonaFilter image-container display-table"><div><div class="image"></div></div></div>With <a href="https://www.businessinsider.com/everyone-who-is-running-for-president-in-2020-2019-1">nearly 30 Democratic contenders</a> gearing up to face off against President Donald Trump, many have said that expanding access to health coverage should be a priority - and some, like Sanders, have pushed for a bigger overhaul of the US healthcare system advocating&#xa0;"<a href="https://www.businessinsider.com/medicare-for-all-democrats-bernie-sanders-trump-details-2018-9">Medicare for All</a>."Sanders has said he won't take funds from the <a href="https://berniesanders.com/no-health-insurance-and-pharma-money-pledge/">pharmaceutical and health insurance industries</a> in pursuit of that goal.&#xa0;Read more: <a href="https://www.businessinsider.com/medicare-for-all-democrats-bernie-sanders-trump-details-2018-9">Democrats are embracing a radical change to US healthcare, and it could be the defining political fight for years to come</a>&#xa0;The presidential candidate put out a <a href="https://berniesanders.com/no-health-insurance-and-pharma-money-pledge/">No Health Insurance and Pharma Money Pledge</a> that bars "knowingly" taking contributions of more than $200 from political action committees, lobbyists and executives of drugmakers like <a href="https://www.businessinsider.com/merck-hiv-drug-implant-prevention-and-treatment-2019-4">Merck</a> and <a href="https://www.businessinsider.com/novartis-ceo-vas-narasimhan-on-culture-strategy-and-change-2019-7">Novartis</a> and health insurers like Cigna and Kaiser Permanente. But it does not extend to the average employee. The pledge also does not apply to other healthcare sectors like hospitals.The stance represents a departure from the 2016 election, when Democratic candidate Hillary Clinton and Trump both blasted the pharmaceutical industry and its high drug prices, while still taking campaign donations.Read on to see how much the 2020 candidates have brought in from the health sector so far. We reached out to every campaign for comment, and included responses below if we received them.The data from OpenSecrets includes contributions from employees at hospitals, health insurers and makers of drugs and medical supplies, as well as professionals like dentists and nurses as <a href="https://www.opensecrets.org/industries/slist.php">part of the healthcare sector.</a>OpenSecrets doesn't yet have data on Tom Steyer and Joe Sestak, who declared their candidacies more recently. Mike Gravel's contributions aren't included because they're largely small and not categorized, OpenSecrets said.<a href="https://www.businessinsider.com/intelligence/digital-health?IR=T&amp;itm_source=businessinsider&amp;itm_medium=ctgr_bii&amp;itm_term=ctgr_subscription&amp;itm_content=health&amp;itm_campaign=digital-health-2"></a><div></div>

As Bernie Sanders tells Big Pharma to 'keep your money,' here's how much every 2020 presidential candidate has gotten from the healthcare industry

New Delhi, Jan 28 () Group health insurance policies of customers of the public sector banks slated to be merged with other PSBs will continue to be serviced by insurer companies till the end of the policy period, Irdai said on Tuesday.
 The government has announced to merge 10 public sector banks (PSBs) into four with an aim to have fewer but bigger banks from April 2021.
 "Upon merger of these PSBs, the underlying group health insurance policies of the customers of the merged banks shall continue to be serviced by the respective insurance companies which issued the policies till the end of the policy period," the insurance regulator said in a circular.
 The insurance companies shall make suitable arrangements with the acquiring banks in this regard, it added.
 Irdai said the guidelines have been issues in order to protect the interests of the group insurance policyholders of the merged banks.
 Further, at the end of the current policy period of the group insurance policy of the merged bank, the acquiring bank at its option can continue with the same group insurance policy with the same insurance company, for the customers of the merged bank.
 Also, the acquiring bank can simultaneously continue to have insurance coverage for its customers with its existing insurance company.
 The acquiring bank can also offer this insurance coverage to the customers of the merged bank with the consent of its insurer, Irdai added.
 In the biggest consolidation exercise in the banking space, the government in August 2019 had announced four major mergers of public sector banks, bringing down their total number to 12 from 27 in 2017, a move aimed at making state-owned lenders global sized banks.
 United Bank of India and Oriental Bank of Commerce will be merged with Punjab National Bank; Syndicate Bank will be merged with Canara Bank; Allahabad Bank will be amalgamated with Indian Bank; and Andhra Bank and Corporation Bank will be consolidated with Union Bank of India. NKD CS HRS

Irdai issues guidelines to protect interest of policyholders of merged banks

New Delhi, <keyword id="47209" type="General" weightage="20" keywordseo="finance-ministry" source="Orion">Finance Ministry</keyword> would consider capital infusion in three loss-making public sector general insurance companies based on their financial performance of nine months. The infusion if required would be made in the fourth quarter of the current financial year, sources said. According to sources, the finance ministry last year asked three insurers -- National Insurance Company Limited, <keyword id="94451" type="General" weightage="80" keywordseo="oriental-insurance-company-limited" source="Orion">Oriental Insurance Company Limited</keyword> and <keyword id="356117" type="General" weightage="80" keywordseo="united-india-insurance-company" source="Orion">United India Insurance Company</keyword> -- to chase bottomlines rather than topline and underwrite only good proposals. The financial review would give some idea about the impact of restructuring initiated on the profitability numbers and the solvency margin, sources said. The solvency margin is the extra capital the companies must hold over and above the claim amounts they are likely to incur. It acts as a financial backup in extreme situations, enabling the company to settle all claims. The government last year provided Rs 5,000 crore capital to three insurers -- National Insurance Company Limited, Oriental Insurance Company Limited and United India Insurance Company. Kolkata-based National Insurance Company Limited was given the highest, Rs 3,700 crore, followed by Delhi-based Oriental Insurance Company Limited (Rs 1,200 crore) and Chennai-based United India Insurance Company (Rs 100 crore). According to sources these companies have been asked to improve their solvency ratio and meet the regulatory requirement of 150 per cent. The solvency ratio is a measure of capital adequacy. A higher ratio reflects better financial health and the ability of the company to pay claims and meet future contingencies and business growth plans. Barring the solvency ratio of <keyword id="6369780" type="General" weightage="80" keywordseo="new-india-assurance" source="Orion">New India Assurance</keyword>, this key indicator of the three public sector general insurance companies stood below the regulatory requirement of 150 per cent. During 2019-20, the government infused Rs 2,500 crore in these three companies. It increased substantially to Rs 9,950 crore in the following year and Rs 5,000 crore in 2021-22. In all, the government infused Rs 17,450 crore into these insurance firms so far to improve their financial health. Public sector general insurance companies are undergoing various reforms, including organisational restructuring, product rationalisation, cost rationalisation and digitalisation. For efficient use of capital and to push profitable growth, the sources said, a set of key performance indicators linked reforms have been initiated by all public sector general insurance companies effective 2020-21, when the maximum capital infusion was made. Of the four state-run general insurance companies only New India Assurance Company is listed on the stock exchanges, the remaining three are wholly owned by the government. The government has already announced its intention to privatise one general insurance company. To facilitate privatisation, Parliament has already approved amendments to the General Insurance Business (Nationalisation) Act (GIBNA). Finance Minister <keyword id="129243" type="General" weightage="80" keywordseo="nirmala-sitharaman" source="Orion">Nirmala Sitharaman</keyword> in the Budget 2021-22 announced a big-ticket privatisation agenda, which included two public sector banks and one general insurance company. "We propose to take up the privatisation of two public sector Banks and one general insurance company in the year 2021-22. This would require legislative amendments," she had said.

Govt may infuse capital in PSU general insurers in Q4 based on performance

Reliance Anil Dhirubhai Ambani Group or abbreviated as Reliance ADA Group (ADAG) is headquartered in Mumbai. An Indian Conglomerate of companies, this establishment was formed in 2006 by Anil Ambani after the business of his father Dhirubhai Ambani was divided between him and his brother Mukesh Ambani. Following the split of Reliance Industries in December 2005, Anil Ambani got Reliance Infocomm, Reliance Energy and Reliance Capital. Here is an overview of top <keyword id="559059" type="PERSON" weightage="20" keywordseo="Anil-ambani-companies">Anil Ambani companies</keyword>. Reliance Infrastructure Formerly known as Reliance Energy Limited, Reliance Infrastructure Limited, and Bombay Suburban Electric Supply are Indian Private Sector Enterprises involved in power generation, defense, construction and infrastructure. Reliance Power Earlier, Reliance power limited was called as Reliance Energy Generation Limited. This company was created in order to establish, build, operate and maintain power projects in India and International markets. The company has the largest collection of power projects in the private sector in India that is based on thermal energy and renewable energy. Reliance Communications Reliance Communications is a highly popular network provider in India. In February 2019, this company went bankrupt as it could not sell its assets for the sake of repaying its debt. It was declared that the company has an asset worth of Rs.18,000 crores whereas the outstanding debts were Rs.50,000 crores. Reliance Capital Reliance Capital Limited is an India based financial services holding company with a diversified portfolio. A part of the Reliance Group, Reliance Capital is a constituent of Nifty Midcap 50 and MSCI Global Small Cap Index. Reliance Naval and Engineering Identified as R-Naval, Reliance Naval and Engineering Limited was formerly known as Reliance Defense and Engineering Limited. This company is headquartered in Mumbai and is involved with Indian Ship Building and Heavy Industries. This establishment has one of the largest engineering infrastructures in the country. This is the first company from the private sector to get a contract and license for building warships. Reliance Entertainment Reliance Entertainment Private Limited manages the media and entertainment business of the Reliance Anil Dhirubhai Ambani Group. The services of the firm range over content and distribution platforms. Kokilaben Dhirubhai Ambani Hospital Kokilaben Dhirubhai Ambani Hospital is a high-quality tertiary care medical facility situated in Versova, Mumbai, India. This 750-bed multi-speciality hospital was first initiated by Nitu Mandke as a full-fledged and large-scale heart hospital but faced a troubled existence after his death in 2003. Reliance ADA Group of Anil Ambani completed it and named it after his mother Kokilaben Ambani. In 2016, the hospital made an announcement that it will establish about 18 cancer-care centres in the rural regions of Maharashtra. In 2018, Kokilaben Hospital has conferred an award as the Best Multi-specialty Hospitals during the Navbharat Healthcare Awards Summit. Reliance Health Insurance Limited A part of Reliance Capital, Reliance Health Insurance is one of the leaders in the private health insurance sector of India. It has more than 139 offices across India. Affordable health insurance plans and a wide range of options to choose from are the unique distinguishing features of this company.

Here's a look at all the companies that Anil Ambani owns

New Delhi, Jan 17 () Insurance Regulatory and Development Authority of India (IRDAI) chairman S C Khuntia on Friday cautioned insurers against indulging in predatory pricing, saying it is not a sustainable model while citing examples of airline and telecom sectors. 
Highlighting that the insurance industry is different from other business, he said if an insurer fails, it has bearing on customers as well.
 "I would like to give a word of caution here. Though your (insurance brokers) share is very high in group health insurance, the loss ratio in group health insurance is also very high. Probably, it is not very sustainable at present," he said at an event organised by Insurance Brokers Association of India here. 
"So the insurance companies, intermediaries and policyholders need to unite to create a sustainable atmosphere. In other industries if there is unfair competition, the industry suffers but the clientele don't suffer. While this has happened in airlines and telecom industries but we cannot afford that kind of a situation in the insurance industry because insurance is an industry for protection," he said. 
"So if the industry suffers, then clientele also suffers. And as a regulator we would not like that to happen. One should not overcharge and also not undercharge," he said, adding, there is need to create efficiencies so that to bring down premium and minimise the risk.
 Asked if companies are engaging in predatory pricing to up their volume, the regulator acknowledged it by saying "of course, of course."
 "Regulator will have to ensure that the industry runs sustainably. There will be host of actions not one kind of action (to check predatory pricing) but we will ensure that the health of insurance industry does not deteriorate," he said. 
To a query on LIC stake reduction roadmap for IDBI Bank, Khuntia said IRDAI has reminded LIC and they are yet to come forward with it. 
 He, however, expressed hope that it will be done quickly.
 IRDAI stipulates that insurers are allowed to hold only up to 15 per cent stake in any listed entity. But LIC, with a special dispensation from IRDAI, holds more than the limit in some state-run banks. 
 Besides, the Reserve Bank of India (RBI) permits a ceiling of 15 per cent for promoter stake in a private sector bank.
 In June 2018, IRDAI permitted LIC to acquire up to 51 per cent stake in debt-ridden IDBI Bank. 
 When asked about his view on raising foreign investment in insurance sector from the current 49 per cent, he said IRDAI had sought opinions of stakeholders on raising foreign holding to 74 per cent and comments received have been forwarded to the government. 
"Now according to the Insurance Act, 49 per cent is the maximum limit for foreign direct investment. If it goes to 74 per cent naturally the Act has to be amended," he said. 
 However, he was non-committal on ownership and control. No decision has been taken, he added. DP MR
MR

IRDAI chief cautions insurers against predatory pricing

The insurance sector is expected to fly high with the opening up of FDI in the sector. Industry players expect innovation and new insurance products to come in the market, thus giving consumers a wider variety of choices. However, until now, the the $66.4 billion industry has been driven by only a handful of insurance products. BI India brings you some of the popular insurance products in the market and the reason behind their undisputed domination. 
 
<keyword id="514336" type="ORGANIZATION" weightage="20" keywordseo="Endowment-Plan">Endowment Plan</keyword> 
 We all buy a life insurance policy the moment we get our first job. A buyer is often lured into buying a life insurance product through its tax benefits. <keyword id="161880" type="PERSON" weightage="20" keywordseo="Yashish-Dahiya">Yashish Dahiya</keyword>, co-founder of <keyword id="161885" type="COMPANY" weightage="20" keywordseo="Policy-Bazaar">Policy Bazaar</keyword> says, “Traditional policies including endowment and term plan sell more because all non-online channels in insurance companies only sell traditional plans. This is primarily because of the commissions that they would normally make by selling it.” 
 
He further explained that traditional life insurance policies offer short term gains to the consumers which include getting a loan against their policy. “In addition to this, traditional plans offer guaranteed benefits to customers vis-à-vis equity-linked investments. The fact that investment under traditional plans is mostly made in specified government and corporate securities, makes them less risky and more suitable for people with lower-risk appetite,” adds Dahiya. 
 
<keyword id="44600" type="CITY" weightage="20" keywordseo="ULIP">ULIP</keyword> 
 
Unit Linked Insurance Product or commonly known as ULIP have recently started become popular. The new version of ULIPs that was first introduced in 2014 has been gaining popularity amongst retail investors. It offers dual benefit of life cover as well as investment. 
 
Besides, with the onset of online distribution of ULIP, the premium charges have sharply dropped - with no charges for premium allocation, policy admission or discontinuance, except 2.25% fund management charge per annum (for the first 10 years of holding) and mortality charges. According to industry experts, at present, some of the ULIPs cost less than mutual funds. 
 
“The flexibility extended by ULIP has been attracting significant number of investors. ULIPs provide investors an option to invest either in debt funds, equity funds or hybrid funds. Each of these funds has a different level of risk attached to it and you could choose to invest in either of these funds as per your risk appetite. It also gives investors the option to switch between funds with no tax implications whatsoever,” notes Dahiya. 
 
Motor Insurance 
 
Industry players believe that motor insurance is one of the most popular insurance products as it is mandatory to buy one at the time of purchase of the car. However, when compared with health insurance, the premium amount for motor insurance is relatively lower than that for health insurance. This too is also believed to have contributed in making motor insurance more popular than health in India. 
 
Health insurance 
 
Even though India still ranks low globally when it comes to health insurance, industry players have noted that this insurance product is fast gaining popularity. Market estimates suggested that health insurance is the fourth biggest insurance product, next only to motor insurance. 
 
Property Insurance: 
 
Natural calamities as well as unexpected damages to property has boosted this insurance product in the country. Industry players have attributed this trend to the improved awareness amongst people. “The very fact that most of the insurance companies introduced insurance plans that safeguards properties, commercial and personal assets against fire, reiterates its relevance and demand amongst people at-large,” elaborates Dahiya.

These are the Insurance
products that India invests in the most

FloodFlashFloodFlash founders<ul class="summary-list"><li>Business Insider asked some of Europe's top venture capitalists to select insurtech startups to watch out for in 2020. </li><li>Insurtech is a growing part of the financial services market as new companies look to disrupt the unwieldy and complicated world of insurance. </li><li><a href="https://www.businessinsider.com/prime?module=article&amp;area=summary">Click here for more BI Prime stories</a>.</li></ul>It's one of the world's oldest industries and yet insurance is only now beginning to see the kind of innovation and disruption that becoming commonplace in other sectors. Insurance tech, or insurtech, is part of Europe's hottest startup sector, fintech, with companies in the wider market raising more than $9 billion in venture capital in 2019, <a href="https://2019.stateofeuropeantech.com/chapter/investments/article/investment-industry/">according to figures from venture capital firm Atomico</a>.Ruth Foxe Blader, partner at Anthemis said: "We define 'insurtech' broadly to cover any technology company that could impact insurance or risk management. Our thesis is that finance is, through technology, becoming embedded in other industries."Insurance as a sector can cover everything from brokerage, re-insurance, home, health, life, car, and the list goes on. Challengers hope to disrupt the market by using tech and data, including AI, machine learning, and the internet of things, to make services more efficient versus incumbents. We asked investors with a particular interest in European tech to pick out the insurtech firms that they think will have a significant 2020.

We asked Europe's top investors which insurance startups to watch in 2020. Here are the 10 they chose.

<ul class="summary-list"><li>The size and variety of the <keyword id="6354525" type="UNKNOWN" weightage="60" keywordseo="healthcare">healthcare</keyword> sector make it suitable for almost any investor building a diversified portfolio.</li><li><keyword id="504636" type="PERSON" weightage="60" keywordseo="healthcare-stocks">Healthcare stocks</keyword> fall into six categories: pharmaceuticals, biotechnology, medical equipment, sales, insurance, and facilities.</li><li>While the healthcare industry has good growth prospects and is often economy-proof, it also carries some unique investment risks.<a href="https://www.businessinsider.com/?hprecirc-bullet"></a></li></ul>Investing in healthcare is enticing. After all, everyone needs medical care at some point in their lives; everyone uses health services of some kind. If you go by the adage "invest in what you know," then health stocks, which range from drug to insurance companies, certainly qualify.They qualify for economic reasons too. For years now, healthcare costs have far outpaced the rate of inflation. National health spending, which accounts for 18% of total US <a href="https://www.businessinsider.com/what-is-real-gdp" target="_blank" rel="noopener">GDP</a> (gross domestic product), is projected to reach<a href="https://www.cms.gov/files/document/nhe-projections-2019-2028-forecast-summary.pdf" target="_blank" rel="noopener"> $6.2 trillion by 2028</a>. Many healthcare stocks have exhibited robust earnings and share price growth - not only in the COVID 19-dominated year of 2020 but throughout the past decade - and many economists and analysts predict continued growth in the years to come. <h2>Why invest in healthcare stocks?</h2>Actually, the question might be why not invest in healthcare stocks. In fact, the healthcare industry is hard for investors to avoid. <ul><li>Health care is the second-largest sector (industry group) of the Standard &amp; Poors 500</li><li>Health care stocks represent over 10% of the <a href="https://www.businessinsider.com/what-is-nasdaq" target="_blank" rel="noopener">Nasdaq Composite Index</a></li><li>Of the 30 companies in the <a href="https://www.businessinsider.com/what-is-dow-jones" target="_blank" rel="noopener">Dow Jones Industrial Average</a> index, five are health-care related</li></ul>So, you might be hard-pressed to build a diversified portfolio of any kind that doesn't include at least some healthcare stocks.But it goes beyond ubiquity. Ranging from robotics to insurance companies, from century-old drug makers to fresh cannabis farms, the diversity of the health care sector also makes it an important place to invest. And because the sector includes both growth and value stocks, defensive stocks, aggressive small-cap plays and more conservative large-cap companies, you can achieve a lot of <a href="https://www.businessinsider.com/what-is-diversification" target="_blank" rel="noopener">diversification</a> within your portfolio via healthcare too.We'll get into the hows of investing in healthcare. But first, let's examine how the healthcare industry is organized, the types of companies it includes, and their characteristics.<h2>Types of healthcare stocks for investment</h2>When you invest in the healthcare sector you're actually investing in a broad range of industries. Some are manufacturing/production, others are service-oriented. Each element of the health care sector can act like its own mini-sector, with varying degrees of volatility and performance depending on demographics, government regulation, reimbursement patterns, scientific and technological breakthroughs.There are six generally agreed-upon healthcare subsectors, each with its own characteristics:<div type="image" title="healthcare industry sectors" height="2442" width="2501" msid="80106656" hostid="261"></div><h3>Pharmaceuticals</h3>Major pharmaceutical companies, aka "Big Pharma," manufacture and market prescription and over-the-counter drugs, creating a stable stream of revenue from continued sales. These firms also conduct research and development to create new drugs that undergo clinical trials in the hopes of ultimately being approved for use. Some of these efforts can result in "blockbuster" drugs such as cholesterol-lowering agents and diabetes drugs that generate profits for years. The fortunes of these big drugmakers wane when patents expire and generic competition eats into sales or improved drug therapies are approved and take precedent over established brands. Leading pharmaceutical companies include names such as Novartis AG, GlaxoSmithKline PLC, and Pfizer, the company that developed a COVID-19 vaccine with BioNTech.Generic drug manufacturers are another important member of the pharmaceutical subsector. These companies manufacture look-alike drugs that are cheaper than brand-name pharmaceuticals once the patents for those brand-name drugs expire. Because of insurer and government incentives to use less-expensive generics, these companies can benefit from increased demand for lower-priced drug alternatives. At the same time, because of the lower prices, generic drug makers experience thinner profit margins. In addition, many manufacturers have been under fire for faulty formulas and quality standards.<h3>Biotechnology</h3>Biotech firms also conduct research and development to create new drugs and therapies. However, they are often focused on one or two "breakthrough" products or treatments. Biotech firms are sometimes classified as part of the pharmaceutical drug subsector, but they often behave differently than their Big Pharma counterparts. While the established drug-makers often offer steady returns and income, biotech firms are more akin to volatile growth stocks. Because their pipelines are concentrated and because it can take years to get FDA approval for a promising product, investors can wait years for a payoff. Biotech firms include small startup companies and larger, more established drug makers such as Amgen and Biogen. BioNTech has become a well-known biotech name as Pfizer's partner in developing the COVID-19 vaccine.<h3>Medical equipment</h3>Medical equipment makers range from firms that make everything from commodity items such as bandages and gloves to expensive, high-tech equipment such as MRI machines and surgical robots. In the right product categories, medical equipment stocks can offer long-term growth as the growth in healthcare consumption continues to increase. Investors need to consider product innovation, patents, government approval and reimbursements, and market demand when evaluating medical equipment stocks. Large medical equipment companies include companies such as Johnson &amp; Johnson and Medtronic PLC.<h3>Sales and distribution</h3>This sector includes pharmacies and retailers and wholesalers of healthcare products. Companies can be influenced by general retail trends, but are also subject to consumer demand for medical and health goods, and to regulations affecting the healthcare industry. With more healthcare products and drugs being produced and used, growth in distribution networks has increased significantly in recent years, making healthcare distribution a growth industry with names such as McKesson and AmerisourceBergen. <h3>Managed Healthcare</h3>Managed healthcare is just another way of saying insurance companies. The field includes any company that provides health insurance policies, whether it be through employer-sponsored or private insurance, the Affordable Care Act exchanges, or socialized programs like Medicare and Medicaid.Since health-care coverage is a staple of people's lives, managed-care companies' returns tend to be steady. It also helps that this sector in the US is dominated by a quintet of companies. The "Big Five" firms are: <ul><li>UnitedHealth Group Inc. </li><li>Anthem Inc.</li><li>Aetna Inc.</li><li>Humana Inc.</li><li>Cigna Corp.</li></ul>Unlike the firms in other healthcare sectors, like biotech, the Big Five don't face many disruptors or new competitors. However, insurers' profits are tied to both consumer demand and government actions. The creation of new laws, or prospects of changes in laws, often causes ripples in the stocks, as the market tries to assess "what that'll mean for the insurance companies."<h3>Healthcare facilities</h3>Healthcare facilities firms operate hospitals, clinics, labs, physician offices, psychiatric facilities, and nursing homes. Major players include HCA Healthcare, which operates hospitals, and Laboratory Corp. of America.Although the demographics are in its favor, this subsector has had problems with profitability in the past - making its business models work. It's also somewhat subject to real estate market trends. It was particularly hard hit in 2020 by COVID-19, as consumers stayed away from routine doctor visits and hospitals wrestled with the demands of the pandemic.<h2>The pros and cons of healthcare stocks</h2>The number one advantage of investing in health care stocks? To participate in a sector that's expanding at a faster rate than the economy as a whole. Quick fact: The US spends more than any other country in the world on healthcare, and the health share of the economy is <a href="https://www.cms.gov/files/document/nhe-projections-2019-2028-forecast-summary.pdf" target="_blank" rel="noopener">projected to rise to 19.7% percent by 2028</a>.Healthcare stocks generally belong to an investment category of <a href="https://www.businessinsider.com/what-are-defensive-stocks" target="_blank" rel="noopener">defensive stocks</a> - that is, they provide consistent returns, regardless of how the stock market or economy is doing. But of course, some companies perform better than others. When investing in healthcare, look for companies that are best poised to take advantage of some underlying fundamentals that can fuel growth, including:<ul><li>An aging population</li><li>Treatment advances in chronic diseases and conditions, including obesity and diabetes</li><li>Technological advances such as telehealth and remote monitoring</li></ul><h3>Drawbacks of healthcare stocks</h3>Despite their defensive reputation, healthcare stocks do offer risks - some typical of any investment, some more unique to this industry. <ul><li>Regulatory: Subsectors such as pharmaceuticals and managed care are highly regulated by the government. So FDA standards, new rules/changes in Medicare, Medicaid, and other programs, and cost controls can all play a role in how a stock performs.</li><li>Political: No industry is immune to public opinion, but healthcare is a particularly hot button item. Consumer demand for lower costs and the ongoing debate for universal insurance programs and healthcare reform all can and do impact the prospect for healthcare corporate profits, and their stocks. </li><li>Economic: Although the industry as a whole has good growth potential, many providers and facilities are experiencing dramatic competition - and consolidation trends. as consolidation continues pricing, and profits, could decline.</li></ul><h2>How to invest in healthcare</h2>There are several ways to add healthcare stocks to your <keyword id="6362476" type="UNKNOWN" weightage="60" keywordseo="investments">investments</keyword>.<h3>Individual stocks</h3>All types of global healthcare stocks are available on the exchanges - not just US ones, but international companies as well, like Bayer AG (<a href="https://markets.businessinsider.com/stocks/bayzf-stock" target="_blank" rel="noopener">BAYZF</a>). You'll need to determine which subsectors best fit with your portfolio and from there determine which companies offer the best potential for appreciation, income, or whatever your main investment goal.<h3>Mutual funds and ETFs</h3>There are numerous healthcare sector mutual funds and ETFs. Many are index funds. Some follow the sector as a whole via an index like the S&amp;P 500 Health Care Index. There are also subsector indices such as the S&amp;P Pharmaceuticals Select Industry Index or the Russell 2000 Biotechnology index. Other funds are actively managed, with the manager choosing individual stocks within the healthcare sector based on corporate performance, outlook, and other factors. Some examples of healthcare funds include:<ul><li><a href="http://undresearch.fidelity.com/mutual-funds/summary/316390301" target="_blank" rel="noopener">Fidelity Select Healthcare Portfolio</a> </li><li><a href="https://markets.businessinsider.com/funds/vanguard-health-care-fund-investor-shares-us9219083071" target="_blank" rel="noopener">Vanguard Health Care Fund</a> </li><li><a href="https://markets.businessinsider.com/etfs/vanguard-health-care-index-fund-etf-shares-us92204a5048" target="_blank" rel="noopener">Vanguard Health Care ETF</a> </li><li><a href="https://markets.businessinsider.com/etfs/fidelity-msci-health-care-index-etf-us3160926008" target="_blank" rel="noopener">Fidelity MSCI Health Care Index ETF </a></li></ul><h3>REITs</h3><a href="https://www.businessinsider.com/what-is-a-reit" target="_blank" rel="noopener">Real estate investment trusts</a>, publicly traded funds that hold a portfolio of properties, often specialize in healthcare facilities - the physical buildings that contain hospitals, medical offices, and senior housing. Though a more indirect play, these healthcare REITs can be a way to invest in real estate and healthcare at the same time.<h2>The financial takeaway</h2>Healthcare stocks offer an unusual bevy of choices and diversity. Growth, value, aggressive, and low-risk investors can all find choices within this expansive sector. Its sheer size, the growth in healthcare consumption makes this sector hard for any diversified investor to ignore.Forecasts for healthcare consumption and spending suggest good growth prospects for this industry. As with any investment, though, healthcare has its downsides - and its own characteristic risks, such as its sensitivity to government regulation and political currents. That's why thorough research is an important part of healthcare investing.<h2>Related Coverage in <a href="https://www.businessinsider.com/investing-reference" target="_blank" rel="noopener">Investing</a>:</h2><h3><a href="https://www.businessinsider.com/what-is-an-index-fund" target="_blank" rel="noopener">What is an index fund? A low-cost, low-risk way to invest in the stock market</a></h3><h3><a href="https://www.businessinsider.com/etf-vs-mutual-fund" target="_blank" rel="noopener">ETFs and mutual funds can instantly diversify your portfolio, but they differ in how they're traded, managed, and taxed. Here's what you should know.</a></h3><h3><a href="https://www.businessinsider.com/how-to-invest-in-tech-stocks" target="_blank" rel="noopener">How to invest in tech stocks, a risky but fast-rising segment of the market</a></h3><h3><a href="https://www.businessinsider.com/how-to-diversify-portfolio" target="_blank" rel="noopener">How to diversify your portfolio to limit losses and guard against risk</a></h3><h3><a href="https://www.businessinsider.com/what-is-common-stock" target="_blank" rel="noopener">What is common stock? The most typical way to invest in a company and profit from its growth</a></h3>

How to invest in healthcare, a massive market sector that offers unparalleled diversification for portfolios

New Delhi, Feb 3 () State-owned Punjab National Bank is seeking IRDAI forbearance on cutting down stake in Canara HSBC OBC Life Insurance, which will come to the lender's fold after its merger with Oriental Bank of Commerce (OBC), sources said.
OBC currently holds 23 per cent stake in Canara HSBC OBC Life Insurance. Besides, another public sector lender Canara Bank has 51 per cent stake and HSBC Insurance (Asia Pacific) Holdings Limited as foreign partner owns 26 per cent.
As per the extant guidelines, one promoter cannot hold more than 10 per cent stake in two insurance ventures, sources said.
After the merger of OBC, expected in April, PNB will automatically get 23 per cent stake in Canara HSBC OBC Life Insurance also.
Already, PNB is a promoter of PNB Metlife Insurance with highest stake of 30 per cent.
Founded in 2001, PNB Metlife's other shareholders include US-based Metlife with 26 per cent, Elpro (21 per cent) and M Pallonji &amp; Company (18 per cent).
The sources said PNB has requested the regulator to provide additional time for cutting down or offloading its stake in the life insurance firm that will come to its fold by merger of another lender.
In another case, the merger proposal involving Union Bank of India, Andhra Bank and Corporation Bank, Andhra Bank holds 30 per cent stake in IndiaFirst Life Insurance whereas Union Bank holds 23 per cent stake in Star Union Dai-ichi Life Insurance.
In this case again the merged entity led-by Union Bank of India will have more than 10 per cent stake in two life insurance companies.
In the biggest consolidation exercise in the banking space, the government in August 2019 had announced four major mergers of public sector banks, bringing down their total number to 12 from 27 in 2017, a move aimed at making state-owned lenders global sized banks.
United Bank of India and Oriental Bank of Commerce will be merged with Punjab National Bank; Syndicate Bank will be merged with Canara Bank; Allahabad Bank will be amalgamated with Indian Bank; and Andhra Bank and Corporation Bank will be consolidated with Union Bank of India.
Keeping proposed merger in mind, Insurance Regulatory and Development Authority of India (IRDAI) last month said group health insurance policies of customers of the public sector banks slated to be merged with other PSBs will continue to be serviced by insurer companies till the end of the policy period.
"Upon merger of these PSBs, the underlying group health insurance policies of the customers of the merged banks shall continue to be serviced by the respective insurance companies which issued the policies till the end of the policy period," the insurance regulator had said in a circular.
The insurance companies will make suitable arrangements with the acquiring banks in this regard, it added.
IRDAI said the guidelines have been issued in order to protect the interests of the group insurance policyholders of the merged banks. DP BAL

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