Aditya Birla Group holds 51% stake in the JV, while MMI Holdings owns 49%
The latest entrant to the country’s health insurance space, Aditya Birla Health Insurance, wants to leverage the Aditya Birla brand to the “fullest extent” for expanding footprint. The company feels its late foray will not put it in a disadvantageous position since the entry point is not an issue with the health insurance market that remains small and highly under-penetrated.
In association with MMI Holdings of South Africa, the Aditya Birla Group ventured into the Rs 27,000-crore health insurance industry last month through Aditya Birla Health Insurance Company (ABHICL). In the joint venture, the Kumar Mangalam Birla-led group holds 51% stake while MMI Holdings owns 49%.
“I don’t see it is a disadvantage, because the market is so small. It is not that the penetration is high. As penetration level is in the single digit, there is no issue on entry point,” Aditya Birla Health Insurance chief executive Mayank Bathwal said.
“We are starting with a fresh slate. We have options of starting with a lot more newer offerings and a lot of digital platforms. So, this is a very good time to get into the industry,” Bathwal said in an interview.
The Aditya Birla Group had forayed into the life insurance industry by forming a joint venture with Canada’s Sun Life Financial in 2000.
With about 18-20% year-on-year growth, the health insurance segment currently is the fastest growing insurance space in India. The newly-launched firm thinks as the base is small, the industry can expand more.
Bathwal said his company would leverage the Aditya Birla brand name to the fullest extent to expand footprints. Like all other financial services under the group, the company aims to be among the top five health insurance providers in the country in the next five years by capturing around 10% market share.
“The brand name is the big strength we carry. Financial services and healthcare are areas where a lot of emotion is attached to the relationship between the provider and customers, and the element of trust that customers seek from the brand,” he said.
Without giving specific numbers on premium and customer acquisition targets for the first year of operation, the insurer said its aspiration is to reach out to as many customers as possible, both for retail and group policies.