Mumbai: India’s group health insurance markis shifting from standardised corporate policies to flexible, points-based benefit structures that allow employees to tailor coverage to individual needs, driven by a younger workforce that values flexibility and choice over one-size-fits-all packages.
Insurers are increasingly redesigning group policies to allow employees to co-create their policies within corporate frameworks, choosing riders and add-ons to suit their needs, from dental and vision to mental health and even pet insurance.
At the heart of this switch is a points-based system that allows employees to construct their own insurance covers within defined limits. “Personalisation is often used very loosely, but this is different,” said Pavanjit Singh Dhingra, joint managing director, Prudent Insurance Brokers. “Employees are allocated points and can use them to build their own benefits within certain guardrails.”
Under this model, if a company budgets, say, Rs 15,000 per employee, the amount is converted into an equivalent number of points.
Active Participation
Employees can then deploy these points across a range of options to choose higher sum insured, enhanced maternity limits and additional covers such as dental, vision, critical illness or pet insurance.
The approach goes beyond traditional voluntary top-ups. Currently, about 5% of group health premiums fall under such customised or flexible benefit pools. The group health insurance segment in India expanded 10.36% to Rs 61,435 crore during 2024-25 and accounted for almost half of the Rs 1.17 lakh crore health insurance premium written by the insurance industry.
Insurers say the model also improves perceived value, as employees actively participate in designing their coverage rather than passively accepting standard benefits. Engagement levels are very high, with 60-70% of employees making active choices, but this model still accounts for only about 5% of premiums today because it requires strong data, analytics and technology to ensure claims don’t spiral, said Dhingra.
Alongside core health coverage, demand is rising for mental health support, wellness services and niche products such as pet insurance, particularly in urban centres.
While still nascent, pet insurance is emerging as a fast-growing category, with about 3-4% of corporates now offering it as part of group policies, albeit on a voluntary, employee-paid basis.
