Articles

Health insurance will play an important role in India's changing social environment, which is increasingly moving towards the nuclear family system. After testing success in the life insurance space, Max Group has launched health insurance business under Max Bupa, a standalone joint venture with UK-based Bupa, in six cities to capture the growing demand for health protection in a grossly under-penetrated market. In an exclusive interview with ET's Paramita Chatterjee, Analjit Singh, founder & chairman of Max India, said both the partners would infuse up to Rs 600 crore over the next five years to ramp up operations. Excerpts:

After a successful life insurance business, which also offers customised health insurance products, why do you plan to venture into health insurance?

Foraying into health insurance was a natural progression for us considering we were already present in the healthcare and life insurance space. The idea of launching a standalone health insurance venture was to increase penetration in the country. India is grossly under-penetrated, with only about 3% of the billion-plus population possessing health insurance cover. Going forward, health insurance will become an important part of the social security system. Our aim is to provide social security to common people at a competitive price.

With the launch of Max Bupa, there are now three standalone health insurers in the country. What exclusive prod ucts or services are you looking to launch, considering private insurers account for a mere 3% of the market?

The journey of standalone health insurers has just begun. Our main intention is to increase penetration, and, for that, we have done some bit of innovation to the regular health insurance schemes like providing cover to a new born baby from day one under our family floater health insurance policy. It is the first time in India that a new born baby will be covered by health insurance from birth, along with vaccination expenses till the child turns one. Besides, we have also decided to extend health insurance to all age groups and not bar anybody. Health insurance is different from the typical life insurance policies and hence, there is much more interaction required between insurers and customers. And, to make products more cost effective, we have decided not to have any third-party administrators.

Given the growth opportunities, how much capital infusion will be needed over the next five years?

Insurance is a capital-intensive business. The current capital base is Rs 151 crore. In our assessment, we need to invest additional up to Rs 600 crore in the next five years. Now that we have launched our business in six cities, we will be hiring significantly this year. By the end of this calendar year, we plan to have 600 employees and another 3,000 agents on board. Besides, we would foray into three more cities - Surat, Jaipur and Ludhiana. We are expecting certain regulatory changes. Once regulatory changes are made, opportunities will only increase further.

What do you exactly mean by the regulatory changes?

We are awaiting the relaxation of the foreign direct investment limit of 26% in insurance. Once it goes up to the proposed 49%, many more global players will be tempted to enter the Indian market. In case of our JV too, Bupa may increase the stake to 49-50%. Besides, there are lots of operational charges that require legislation changes.