The latest entrant in the country's health insurance space, Aditya Birla Health Insurance, wants to leverage the strong Aditya Birla brand to the 'fullest extent' for expanding its footprints nationally.
The latest entrant in the country’s health insurance space, Aditya Birla Health Insurance, wants to leverage the strong Aditya Birla brand to the ‘fullest extent’ for expanding its footprints nationally. The new company feels late foray in to the space will not put it in a disadvantageous position as the entry point is not an ‘issue’ with the health insurance market remains small and highly underpenetrated.
Joining hands with South African MMI Holdings, the Aditya Birla Group ventured into the Rs.27,000 crore health insurance industry last month through the standalone company, Aditya Birla Health Insurance Company (ABHICL). In the joint venture entity, the Kumar Mangalam Birla-led Group holds 51% stake while MMI Holdings holds 49%.
“I don’t see it is a disadvantage, because the market is so small. It is not that the penetration is high and so that we will be worried. As penetration level is in the single digit, there is no issue on entry point,” Aditya Birla Health Insurance chief executive Mayank Bathwal told FE when asked about the late entry into the market crowded with a large number of players.
“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 Indian life insurance industry by forming a joint venture with Canada’s Sun Life Financial in 2000.
With about 18-20% year-on-year growth, health insurance segment currently is the fastest growing insurance space among all product line in India. The newly-launched firm thinks as the base is small, the industry can expand much more because many people, in both rural and urban India, have a need for health cover.
Bathwal said his company would leverage Aditya Birla brand name to the fullest extent to expand footprints nationally. 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. Because financial services and healthcare are areas where a lot of emotions are attached to the relationship between the provider and the customers, and the element of trust that the customers seek from the brand,” he averred.
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, both for retail and group policies, that it can by trying different methods.
ABHICL will have multi-channel distribution model across agency, bancassurance, broking, direct marketing and online platform. Tie-ups with banks are in the process, while online selling of policies will start in a month’s time. Currently, the company has three products– two group products and one retail product with a wide range of offerings. It has plans to add more retail insurance products going forward.
The insurer wants to tap two customer segments–one is young and health conscious people, and the other is people who live with chronic lifestyle diseases.
Bathwal said for the company the time needed for achieving break-even would depend on the pace of customer acquisition. “If you see the industry, normally break-even (for a health insurer) happens in 7-8 years…but obviously we want to do better than what the industry has done because of our core proposition and philosophy,” he added.