In order to increase its presence in the insurance segment, financial services provider Religare today signed an agreement with global reinsurer Swiss Re to set up a 74:26 joint venture for health insurance. The joint venture now awaits approval from the Insurance Regulatory and Development Authority (Irda) and plans to roll out operations by the fourth quarter of the current financial year.
The joint venture plans to infuse Rs 500 crore. A minimum of Rs 100 crore is needed to set up a non-life insurance company.
Insurers are trying to tap the health segment as they consider it underpenetrated. This segment has been logging a growth of over 37 per cent since 2002. Both life and non-life insurers are trying to tap this market. Despite low penetration, the claim ratio in the segment is high (around 140 per cent).
At present, there are two specialised health insurance companies, Star Allied Health Insurance and Apollo DKV. Another private sector player Max New York Life has formed a JV with UK-based British United Provident Association (Bupa) to roll out its health insurance business, Max Bupa.
Religare entered into the insurance space with Aegon, the Netherland-based insurance company, for a life insurance joint venture. It is also present in asset management, wealth management, equity broking, commodity broking, investment banking, private equity and venture capital. Recently, it entered into the housing finance business by acquiring a 87.5 per cent in Maharishi Housing Finance Corporation. Religare has been promoted by the Singh family, which till recently owned Ranbaxy Laboratories.
“Religare is very pleased with the proposed joint venture and it is a clear recognition of our vast distribution capabilities in India and our domain expertise in the healthcare sector through our other group businesses,” said Religare CEO & MD Sunil Godhwani.
“Swiss Re’s interest in a health insurance joint venture is also a natural extension of leveraging our actuarial and underwriting expertise in the important Indian market,” said Christian Mumenthaler, Swiss Re executive board member and head of life & health underwriting.
In 2007-08, the country’s health insurance industry had collected Rs 5,100 crore in premium income. This segment has seen a compounded annual growth rate of around 40 per cent in the six years till 2007-08. It is one of the country’s fastest-growing non-life insurance segments.