Standalone health insurance company Apollo Munich Health Insurance has shifted its focus to retail business, which it expects to account for 75 per cent of its total business by the end of March 2014. Antony Jacob, CEO of Apollo Munich Health Insurance, speaks to M Saraswathy about the firm’s growth strategy. Edited excerpts:
With health insurance having been standardised, do you see a double-digit growth in this segment?
Health insurance has been growing steadily within non-life insurance and this is in line with expectation. It has grown 20 per cent every year over the past five years and will do so for the next five to 10 years. This is because awareness is increasing and there is a fair amount of push by individual players of health insurers. Irda (Insurance Regulatory and Development Authority) has also been pro-active in making consumer-friendly changes to the products and process. Further, health care costs are on the rise year-on-year. It is becoming a costlier proposition. For all of these reasons, health insurance will grow 20 per cent year-on-year.
The group health segment has seen a lot of churn with respect to transfer of corporate accounts. Will you continue to be focused on this segment?
Earlier, we were 50 per cent group and 50 per cent retail business. But, by the end of March 2014, we will be 75 per cent retail and 25 per cent group. Some group businesses are unprofitable at this point, but retail is growing at 50 per cent per annum. Retail business will be our focus for the next few months and the 75-25 mix will continue for the time-being.
You had recently forged bancassurance tie-ups with a PSB and a foreign bank. Are there any more partnerships on the anvil?
Bancassurance came into play a year ago when Irda allowed banks to tie up with standalone health insurers. Since then, we have announced two partnerships with Canara Bank and Citibank - one public-sector bank and one MNC (multi-national company) bank. Let us execute these partnerships and we will then look at others. We are also awaiting some clarity on banks-as-brokers model versus banks-as-corporate-agents model.
The net losses for Apollo Munich have touched Rs 15.8 crore for the quarter ended December 31, 2013 from Rs 3.8 crore in same period in the last financial year. What were the causes?
Health care costs over the past 12 months have increased. The health care industry faced challenges since 50-60 per cent consumables in the health care industry are imported. When the rupee moved from 54 to 65 a dollar, a 20 per cent increase was seen, some of which was passed on to health insurance companies. Also, there has been a challenge of infectious diseases being on the rise, due to the fact that more than adequate rainfall was reported in some areas.
Besides, the increase in lifestyle diseases has reflected in our claims. Our claims ratio on the region of 60 per cent in the previous financial year is now running at 65 per cent.
Since you are a player in the government-sponsored Rashtriya Swasthya Bima Yojana (RSBY) scheme, will you continue to tender for newer districts?
We have taken part in the RSBY schemes for four years and will continue to look at it. But as a standalone health insurer, business should make sense from a shareholder’s point of view and we won’t be writing business at a loss.
The pricing in RSBY tenders have been very competitive. So we are very keen in participating but we need to break even or make at least marginal profits. So, it depends on a case-to-case basis.