 "healthcare, hospital")
In a country where exposure to health insurance is low — only 29 per cent of the families had at least one member covered by health insurance, according to the fourth National Family Health Survey — and lifestyle diseases are getting increasingly common, often a chronic condition or a sudden ailment can mean a lifetime of savings wiped off. This low base provides ample opportunity to and has translated into robust growth for standalone health insurers (SHIs) in recent years.
Sensing an opportunity, Aditya Birla Health Insurance (ABHI) has waded into the market and is well aware of the challenges ahead if it wants to break into the top three SHIs by the year 2023, a target it has set for itself recently. ABHI claims to be at No. 5 among the seven SHIs players currently. Those vying to sell health policies also include heavyweight general insurance companies such as New India Assurance, Bajaj Allianz, ICICI Lombard and Oriental.
According to the Insurance Regulatory and Development Authority, the total premium collection by the SHIs in 2017-18 was Rs 8314.28 crore, of which ABHI accounted for nearly three per cent, that is, Rs 243.17 crore while the table topper Star Health accounted for Rs 4,161.11, or 50 per cent of the pie. Star Health was followed by Apollo Munich and Religare with premium collections of Rs 1,717.51 crore and Rs 1091.61 crore respectively.
This Rs 8,314.28 crore collected by SHIs, again, is barely a fifth of the total Rs 41,981 crore premium collected in the health segment last year.
The company is providing virtual and physical care assistants to help with claim settlement and hospitalisation
ABHI is banking on retail sales with the focal point being a diverse young population. It aims to beat competition by incentivising healthy lifestyle, expanding the domain beyond hospitalisation costs, leveraging the power of digital through swift issuance of policies and making claim settlement hassle-free. Since awareness of health insurance remains low, the company is also banking on the tie-ups with 10 banks and the footprint of its parent group to boost both reach and awareness, says Mayank Bathwal, chief executive, ABHI.
Bathwal says, “We have products which are rewarding you for staying healthy and give you up to 30 per cent back on your premium besides the cover. There is a whole matrix of tracking the consumer's health and physical activity with their consent. So if you are doing something positive about your health — from running to gymming or yoga — we give 2.5 per cent of premium back every month through a fund account. The option is with the customer to pay off her health bills or to wait till the end of the year to pay a part of the next year’s premium.”
But then how does one monitor “physical activity” or believe the claims made by a consumer? ABHI gets a periodic health assessment or fitness assessment done for the consumer which consists of five to seven tests at a location which is convenient for the consumer. “We get it done at our cost. It's not that we make the insured run on treadmills or make them undergo a set of scans because people tend to get scared. These are some basic tests such as blood sugar, blood pressure, body mass index and based on the results, we categorise them as 'green', 'yellow' or 'red' on the health status.”
The company also offers a chronic care management programme for its flagship product. “If someone enters as a healthy customer and owing to one or various factors such as sedentary lifestyle, genetics etc, gets diabetes, the programme will kick in. We have four conditions covered under the chronic care management programme called ABCD (asthma, blood pressure, cholesterol, diabetes). For any of these conditions or a combination of them, the programme will offer two benefits — the regular non-hospitalisation medical costs will start getting covered up to a certain amount and second a health coach will be appointed for the person.”
Gym tie ups and hiring the care managers mean extra cost for the company
This health coach will not replace a doctor but will suggest healthy lifestyle choices after understanding the body needs and help someone manage diabetes or blood pressure well. The company has a team of 10 doctors currently working as health coaches and plan to add more as they go along. Similarly, ABHI has a feature called virtual care manager where people on the phone are available. “So, the moment you lodge a cashless claim, the virtual care manager will be appointed for you, they will help you navigate through the hospital system, making sure you have a hassle free experience. In two locations, Delhi and Chennai, we even send a physical care manager. Typically, these are nurses who ensure that the process of hospital admissions and claim settlement is without any trouble.”
The company has a tie up with 6,000 hospitals, which Bathwal feels is sufficient. ABHI now wants to increase its footprint in terms of diagnostic centres, pharmacies and doctors because of the out-patient benefits it is offering for chronic care. But that or the gym tie ups or hiring the care managers mean extra cost for the company. How feasible is that?
Avinash Singh, analyst at SBICAP Securities, says ABHI is chasing growth and is ready to burn cash. “As a late comer, they have to show that they are a meaningful player and they are ready to burn capital for that. The risk, however, is that if a new competitor comes along and increases the competitive intensity, it can make life more challenging,” says Singh. He says that while the 20-25 per cent growth for the SHI category over the past few years is likely to hold, for someone like Aditya Birla, it may have to look around 40 per cent to hit the Rs 2,000 crore premium collection target by 2023.
Singh says that the bank tie ups that ABHI has currently and which might incrementally grow will also help. According to Bathwal, this strategy is helps it mostly in Tier 3 and Tier 4 cities where the partner bank acts as a retail outlet. “We have a tie up say a small finance bank in Rajasthan which takes us to the interior parts of the state, KVB takes us to the interior of South India. In terms of partnerships with the banks, we are the largest among health insurers,” he says.
Catching up
- Giving up to 30 per cent discount on premium based on the holder's health and fitness status
- Tying up with gyms, employing mobile apps to track fitness regimens
- Providing health coaches to advise on lifestyle changes for chronic conditions
- Leveraging the tie-up with maximum banks among all SHIs to improve reach and awareness
- With the banks — ranging from HDFC to a small finance bank — ABHI is targeting Tier III and IV cities
