Aditya Birla Health Insurance (ABHI) aims to showcase that health insurers can develop a profitable group business via careful selection of clients. In an interview with FE, chief executive Mayank Bathwal discusses the company’s growth strategy and plans for retail and group health books. Excerpts:
What was your gross written premium (GWP) in FY24, and your target for FY25?
In FY24, our GWP saw an impressive 36% year-on-year growth, reaching Rs 3,701 crore, with the retail business growing at 26%. We were the fastest-growing among standalone health insurers (SAHI) in both Q3 and Q4 of FY24. Our market share in the SAHI industry increased from 10.4% to 11.2%. The overall SAHI industry recorded a GWP growth of 26% YoY, with total premiums reaching Rs 33,116 crore in FY24.
In the current fiscal, we expect to continue growing above the industry average, further strengthening our position and expanding the market share.
Group health seems to be a major part of your portfolio.
The company is focused on pursuing a sustained and profitable growth in both the retail and group business segments. In Q1FY25, with a 51% YoY growth, we experienced a robust performance in retail franchise. We have a diverse and digital-enabled distribution footprints. The proprietary channel with a base of 120,000 agents registered a 41% YoY growth.
Our corporate business grew 20% YoY, driven by a sharp focus on profitability. We are concentrating on specific segments to continue to build a sustainable and profitable corporate and affinity business.
It is important to note that our targets and strategy for sourcing retail and group business are separate. The evaluation criteria for assessing internal performance have distinct targets for both the retail and group businesses.
What’s your growth plans for the retail segment?
We are focused on strengthening our ‘Health First’ approach. We have pioneered two standout benefits: incentivised wellness and the health management programme. The incentivised wellness feature, called HealthReturn, rewards customers for adopting healthier lifestyles by allowing them to earn up to 100% of their premium back. The health management programme helps customers and their families achieve desired health outcomes.
In addition to unique products, our growth is backed by a comprehensive and diverse distribution network. We have strong bancassurance partnerships with 14 private and four public sector banks and have forged ties with new-age digital and web aggregator platforms.
We expect sustained demand and growth in the retail segment as we expand market reach, launch new products and continue leveraging technology for superior customer engagement.
Group health is often considered a “bleeding” portfolio for insurers. Your thoughts.
While group health insurance is one of the fastest-growing segments in India, it is often seen as a “bleeding” portfolio due to aggressive pricing and high claims ratios. Insurers frequently offer low premiums to attract large corporate clients, leading to thinner margins. Additionally, group policies tend to see higher claims utilisation compared to retail policies, as employees generally make more frequent use of healthcare services.
At ABHI, we approach group health insurance differently. Our corporate business focuses on profitability through careful customer segmentation, cross-selling/upselling strategies and corporate wellness initiatives. We emphasise right risk selection and strategic targeting, backed by our Health First model, which integrates data and digital capabilities to create sustainable and profitable growth in the corporate space.
By maintaining separate targets for retail and group business, we have managed to build one of the few profitable corporate portfolios in the industry, offering differentiated solutions across IPD, OPD and wellness benefits. This approach allows us to capture market opportunities without sacrificing profitability.
Some say portability in health insurance is hindering retail growth, with insurers poaching each other’s clients. What’s your view?
The portability feature is designed to empower customers by providing them flexibility and ensuring that they remain with insurers offering the best value and service. Portability encourages insurers to focus on attracting existing customers, and also raises the bar for service excellence and product innovation.
Portability may also lead to certain insurers focusing on acquiring customers from competitors, rather than expanding into new markets. This behaviour may be more prevalent with intermediaries trying to churn customers. This often results in short-term gains, but may hinder the overall market growth.