NEW DELHI: Nearly 65 per cent of the people who have health insurance are covered by private players but state-owned firms outperform them by accounting for over 61 per cent of the collections, says a study.

"Considering that about 65 per cent of people covered by health insurance across India fall under the ambit of private sector, the private insurers have outperformed the public insurance companies covering just 35 per cent of people," says the study by industry body Assocham.

"However, in terms of premium it is the other way round as public insurance companies account for maximum share of over 61 per cent in premium arising out of health insurance," it added.

Assocham Secretary General D S Rawat said private health insurance will continue to grow in terms of covering the non-vulnerable, the middle class and higher income segments of the population that can afford to purchase it.

In terms of channel-wise distribution of medical insurance, individual agents bring in majority of business with 72.9 per cent share, the study said.

However, direct business is the major contributor in terms of premium collection with about 37 per cent share, followed by individual agents (31.6 per cent) and brokers (21.4 per cent).

Referrals constitute a meagre 0.1 per cent in terms of both the numbers of policies sold as well as the medical insurance premium they collect.

The study said sparsely spread population, especially outside the metros and Tier-I is a serious challenge for the industry as it results in high cost of customer acquisition and operations.

It added that addressing the coverage gap is a huge challenge for the insurance industry because of low public spending on health along with high levels of informal or unorganised labour, a large dispersed rural population, high levels of poverty and fewer providers serving the poor.

The study suggested that priorities for government for healthcare financing must be such that it covers the basic objectives of affordability, reach and quality of services.