Niva Bupa Health Insurance Co. is preparing to meet the Insurance Regulatory and Development Authority of India’s (IRDAI) requirement to limit management expenses to 35% by FY26, as assured by its Managing Director and CEO, Krishnan Ramachandran.
The IRDAI recently set a 35% expense cap on management costs for standalone health insurers based on gross premiums. Ramachandran stated that the company’s scale-up efforts will support this goal. “In the past financial year, we reached over Rs 5,600 crore in premiums, and as we grow, our expense ratio will align with the IRDAI’s requirement of 35% by FY26,” he explained.
Ramachandran attributed the current higher expense ratio to the company’s “investment phase,” noting, “We’ve expanded our workforce to nearly 9,000 employees, opened additional offices, grown distribution partnerships, launched new products, and boosted technology investments.” These expansions, he noted, have temporarily elevated the expense ratio, which is evident in the company’s growth metrics.
Niva Bupa shares debuted with a 6% premium, listing at Rs 78.14 on the NSE, a 5.59% increase, and Rs 78.50 on the BSE, up by 6.08% from the issue price of Rs 74.
Post-listing, Ramachandran highlighted the company’s focus on improving its combined ratio, an essential measure of profitability. He stated, “Our combined ratio is currently around 98%, lower than many general insurers, and we aim to improve it progressively.”
With retail business making up 70% of its product mix, Ramachandran explained the strategic focus on retail. “We see retail as a high-value, long-term opportunity. Although complex, it provides a sustainable competitive edge,” he said.
Looking forward, Ramachandran emphasized a commitment to sustainable growth across business lines. As of midday, Niva Bupa shares were trading at Rs 75.60, down 3.25% from the opening price, with the Nifty 50 index slightly lower at 23,537.25. By market close, the stock was down 5.29% at Rs 75.01 on the NSE, while the Nifty declined by 0.11%.