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| Religare eyeing global tie-ups for health insurance foray |
| Vandana & Shilpy Sinha / Mumbai Apr 15, 2009, 00:36 IST |
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Religare Enterprises, the diversified financial services company promoted by Malvinder Singh and family, is in talks with global players to foray into health insurance. Religare is in discussions with large global health insurance players such as Bluecross Blueshield Association, the United Health Group, Discovery Health, Philadelphia-based Cigna Corporation and Aetna for a possible joint venture, according to sources.
The group was also in talks with Swiss Re and Munich Re, two of the largest reinsurers, for the foray, they added. However, a Religare spokesperson refused to be quoted saying, “We do not wish to comment on this matter.”
The global partner will have 26 per cent stake in the health JV. According to the Insurance Act, the JV will have to infuse a minimum of Rs 100-crore capital amount for non-life insurance companies.
At present, there are only two specialised health insurance companies in the country — Star Allied Health Insurance and Apollo DKV. Life and non-life insurance companies, including global brands, are eyeing the health segment in a big way given that insurance contributes only 2 per cent of the country’s health expenditure.
Moreover, less than 15 per cent of Indians enjoy some form of third-party payment system (which subsumes health insurance, but can also mean a free cheap benefit provided by an employer) for their health spends. It means the market is yet to be tapped by the existing players, says an industry expert.
Standalone health insures such as Star Health is witnessing 300 per cent growth, and had set a target of Rs 650 crore premium income for the last financial year compared to Rs 20 crore five years ago. Religare entered into insurance space in a joint venture with Aegon, the Netherlands-based insurance company.
It is also present in asset management, wealth management, equity broking, commodity broking, investment banking, private equity and venture capital. A senior executive said the company also plans to foray into the general insurance space.
“Health is the fastest-growing insurance segment. There is huge opportunity as the unorganised sector is without any health policy. The new joint venture will get the benefit of Religare as they are health care providers. We see huge investment in health as the penetration level is very low and the demand for health care is huge,” said a KPMG spokesperson.
The claim ratio in health segment is at 140 per cent. In order to mitigate the losses, insurers wants to bring in standardisation of cost. After finalising the partner, Religare will seek approvals from the Insurance Regulatory and Development Authority. Another private insurer, Max New York Life has formed a joint venture with UK-based British United Provident Association (Bupa) to roll its health insurance business Max Bupa.
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