Religare, Swiss Re call off health insurance JV

Indian firm says it’ll soon tie up with another global insurer

Exactly three months after announcing a tie-up for a standalone health insurance joint venture (JV), Religare and global insurer Swiss Re have decided not to renew their term sheet.

A term sheet is a bullet-point document outlining the material terms and conditions of a business agreement.

According to a senior executive at Religare, Swiss Re was reassessing its plans to enter the space and was not very aggressive. The deadline for the renewal of the term sheet had lapsed on August 20.

The executive, however, added that Religare had shortlisted three players and would be tying up with one of them very soon. Religare was in discussions with large global health insurance players such as Bluecross Blueshield Association, the United Health Group, Discovery Health, Cigna Corporation, Munich Re and Aetna for the health insurance JV. According to the current term sheet, the global partner will have 26 per cent stake in the JV.

Religare already has a health insurance JV with Aegon and Bennett Coleman & Company as partners. The company is also scouting for a non-life insurance partner.

However, Swiss Re, which is a dominant player in the Indian reinsurance market, said that it was still open to exploring a health insurance joint venture. The reinsurer has been looking at entering the health insurance space in India for a long time.

“Swiss Re remains committed to offering its actuarial and underwriting expertise in the important Indian market, and continues to be open to exploring a health insurance joint venture,” said a spokesperson for Swiss Re.

At present, there are only two specialised health insurance companies — Star Allied Health insurance and Apollo DKV — operating in India.

Last year, Max New York Life had formed a joint venture called Max Bupa with UK-based British United Provident Association (Bupa) to roll out its health insurance business.

Newswire reports: Despite its proposed health insurance joint venture with Religare Enterprises being called off, Swiss Re is bullish on its reinsurance business in India. The Zurich-based reinsurance major said it was “committed” to applying for a reinsurance licence in India.

“Reinsurance remains Swiss Re’s core business in India. As a reinsurer, we have served Indian insurers for 80 years and will continue to do so,” said KwokChoi Wong, director, corporate communications, Asia Swiss Reinsurance Company.