Consumers are buying more comprehensive covers & also top-ups to existing plans: Mayank Bathwal, CEO, Aditya Birla Health Insurance

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August 20, 2021 3:45 AM

In the retail business, anything between 60-62% or thereabout comes from banks for us. Agencies contribute about 23-24%.

Mayank Bathwal, CEO, Aditya Birla Health InsuranceMayank Bathwal, CEO, Aditya Birla Health Insurance

Aditya Birla Health Insurance (ABHI) has not witnessed any change in average Covid claim size after the second wave compared to the first wave as claim sizes have been almost similar, informs chief executive officer Mayank Bathwal. In an interview with Mithun Dasgupta, Bathwal says for the insurance company breakeven is on track for the fourth quarter this fiscal in the absence of significant third wave. Excerpts:

Aditya Birla Health Insurance registered nearly 50% year-on-year growth in its gross direct premium underwritten during the first quarter this fiscal. What are the reasons behind this high growth?
Our “Health First” and “Insurance for All” approach has become more relevant for customers post the pandemic. Customer-relevant offerings, along with a large distribution reach, has helped us attain this high growth and also leverage the awareness for the need of having a health insurance. So the revenue continues to be well. Consumer awareness around health insurance and the need is high. We have seen that when the actual wave comes, it increases a bit because people are more scared. When the wave subsides, people start going out, they start spending on other areas, travel, etc. So then it kind of normalises a bit. But even the normalised level is higher than what it used to be earlier. Because people are now realising that the cost of Covid treatment is so high, and why would anyone want to spend that kind of money and the fact that it can happen to any and every one.

Are you witnessing enhanced coverage demands under both retail and group policies after Covid second wave?
Yes, we have seen an increasing demand in both retail and group policies. Companies have started increasing their cover for employees. Additionally, consumers are buying more comprehensive covers and also top-ups to their existing health plans. There is a heightened awareness about not being under insured, and consumers want to add an additional layer of cover beyond what they already have.

Currently, what percentage of your premium comes from retail health insurance business?
Retail is about 70-71%, and group is at 29-30%. We will like to keep our retail business around 70-75% or in that range. I think retail and group both will continue to grow well for us.

What is the percentages of the premium income currently coming from the bancassurance channel?
In the retail business, anything between 60-62% or thereabout comes from banks for us. Agencies contribute about 23-24%.

Has the company increased premiums of any of its policies?
No, we haven’t increased the premiums of any of our policies. We will look at the long-term impact in the future and accordingly decide.

Are you witnessing any change in average Covid health claim size after the second wave compared to the first wave?
No, we haven’t witnessed any such change. Covid claim size has been almost similar as in the first wave. I think about Rs 1 lakh has been the average Covid claim size, and this is at least more than two times compared to non-Covid claims. There has been a growth in non-Covid claims, with the industry paying worth Rs 15,000 crore of Covid claims. It has created a momentary challenge for the industry as it is over and above the regular claims being paid. But the industry has responded very well and has taken the entire hit on its book and paid the claims, even though it is a direct hit to its bottom line.

What has been the total Covid-related claim that your company settled so far?
For Q1FY22, Covid claims incurred was Rs 112 crore, while for FY21 it was Rs 88 crore.

When are you aiming to achieve breakeven for ABHI?
Our breakeven is on track for Q4FY22 in the absence of significant third wave. The fundamental business remains very solid, it is just this additional Covid impact.

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