'We reward our customers for staying healthy'

In Conversation: Mayank Bathwal, CEO, Aditya Birla Health Insurance

Aditya Birla Health Insurance, a 51:49 joint venture between the Aditya Birla Group and MMI Holdings of South Africa, has put in place a multi-channel distribution model across agency, broking, bancassurance, direct marketing, online channel and more.

The company offers group and retail health insurance products. In an interview with Furquan Moharkan of DH, company’s CEO, Mayank Bathwal explains how technological advances in the insurance segment will provide an opportunity for insurers. Edited excerpts:

How do you see India’s health insurance market poised right now?

The healthcare spend in India today is about Rs 6 lakh crore, and this excludes the fashionable part of the healthcare like beauty and cosmetics.

The amount that is being paid by the health insurance industry as claims is about Rs 30,000 crore annually. So the balance is funded by people themselves.

The category of expense that you have on healthcare, funded by health insurers is hospital benefits, which is a tertiary care.

Who is actually buying health insurance?

Early age customers, say up to age of 35, do not have interest in this product, because they feel what is in it for them. So, people typically start looking at this product in the late 30s. And by the time they turn 50, if they haven’t bought this product, chances of getting this is less. Insurance companies won’t accept them, as they have some disease conditions. So there is a chance to penetrate across segments and across age groups.

How much is the penetration of health insurance in India?

About 30 crore people have taken health insurance throughout the country. A bulk of it through government funded schemes, such as Rashtriya Swasthya Bima Yojana (RSBY). Less than 3 crore retail insurance policies have been bought in India. So hardly 3-4% of the population has been covered through retail insurance.

 How do you penetrate in segments that have been mostly untouched till now?

That is what attracted us to this category last year. Even though the category size is small today, but it is the second fastest growing segment across the insurance sector, after crop insurance.

Though this growth is still linked to hospitalisation benefit product. So I feel that there is a huge opportunity.

 Why do you think so?

There are two to three reasons to it. Technology will provide us opportunity to ensure the things that were not earlier possible. Today, why are we not able to provide out of hospital expenses? Because if I visit a doctor, there is ambiguity with regards to possible fraud and abuse.

I have to provide a much wider choice in terms of the doctor network for out of hospital charges. It was very difficult earlier.

But now, it is possible because there are enough networks available now, like Practo.

So these are now an opportunity. Insurers can leverage those networks to reduce fraud and abuse.

Is Aditya Birla Health Insurance planning any kind of expansion?

We were clear when we started that we are not a ‘me too player’ in this segment, because opportunity here is much larger. We have tied up with MMI Holding, a South African-based financial services group. Our proposition is that category should play a much larger role than just insurance.

Customers want good health. You don’t buy this product wanting to go to the hospital next year. But what if I come and tell you, that if you do something to stay healthy, I will reward you.

Suppose if you have an interest in staying healthy, why not I help you in staying healthy.

A customer staying healthy is of paramount interest to us, because if you stay healthy, I also tend to gain.

After all my claims are going to be less. Today, the insurers are playing a passive role on this front.

Hence, we are rewarding our customers for staying healthy.