'Indians tend to place wealth ahead of health'

Q&A: Damien Marmion, Chief Executive, Max Bupa Health Insurance

Damien Marmion was out shopping one day when he got a call offering him medical insurance if he just shared the last four numbers of his credit card. He cites this as an example of how health insurance in the country is sold rather than bought. The chief executive of Max Bupa Health Insurance — a 74: 26 joint venture between Max India and UK’s Bupa — tells Vandana Gombar he wants his products to be bought rather than sold when he launches in the next few weeks. Excerpts:

You would be entering a crowded market which has two health insurance companies and many general insurance companies who also sell health products. What will be the differentiator for you?
Max Bupa primarily relies on customer insight and research. To formulate our strategy, we commissioned some studies from market reasearch company TNS. That threw up some interesting findings.

What was the most surprising find?
The interesting find was how people perceive health insurance in India. It is seen as an instrument to protect savings. It is not aimed at protecting the asset that is health. This is probably common to developing markets, where people tend to place wealth ahead of health. The survey showed massive dissatisfaction with the healthcare system.

How do you propose to address this credibility gap?
If the main thing that the customer wants is to protect his savings, we will offer more comprehensive products to ensure that his savings are better protected. Secondly, we will assure the quality of doctors and hospitals in our network. And, we will handle all the claims ourselves so that we can provide a superior service.

What was behind the decision to not use third party administrators? Would that not add to the costs?
We want to own the customer, to build health and wellness around the family. Since most product features can be replicated quite easily by competitors, the differentiator will have to be service, and that can only be assured if we deliver it ourselves.

What is the launch plan?
We start with the six main cities — Delhi, Mumbai, Chennai, Bangalore, Hyderabad and Pune. We plan to be in 20 cities in the next three years.

It seems your offerings are going to be in premium cities for the premium category
We cannot start with the whole of India. Our products will be all across the spectrum, with premiums ranging from Rs 3,000 to more than Rs 50,000. We also have some rural insurance obligations.

How does a standalone health insurance company like yours compete with a general insurance company which has multiple customer touch points and costs that are spread across a much larger bouquet of products?
We have the advantage of specialisation, which allows us leadership in the healthcare space. Bupa is not just an insurance company. It is a health and care company. For instance, we run over 300 homes for the elderly in the UK. We coach people on health in the US. The portal, bupahealthdialog.co.uk, builds on the knowledge that Bupa has accumulated. We intend to use some of this expertise in India.

Do you think there is a case for making health insurance mandatory?
Voluntary health insurance will always have lower penetration. In Australia, health insurance is heavily tax subsidised and so there is an incentive to buy insurance. There is definitely a need for greater incentivisation of health insurance. I can’t, however, say which incentives are best for India. What we know is that 80-85 per cent of the people are paying cash for medical treatments. This is where the market is.

What is the share you are targeting in a market which is growing at 30-35 per cent year-on-year and projected to be worth Rs 8,000 crore this year?
Market share is a fool’s pursuit. Profitable growth is what we will look at.