Segmented health products will be our path: Krishnan Ramachandran, CEO of Niva Bupa

Autonomous health insurer Niva Bupa Health Insurance (formerly known as Max Bupa health insurance) grew significantly above industry figures. It grew 70 percent in FY21, compared to industry growth of 41 percent, supported by strong retail operations. It has embarked on major expansion plans to support its growth through the increasing penetration of health insurance in the country. Krishnan Ramachandran, MD and CEO, Niva Bupa Health Insurance spoke with Activity area on the market, the disruptions related to Covid, the opportunities and the plans of the company. Extracts:

What were the main disruptions caused by Covid-19 in the health insurance sector?

First of all, awareness of Medicare has increased quite sharply. But growth has moderated. Last year, industry growth was 40 percent in retail, but this year that growth has fallen to 18 percent. It’s still a conversation-driven business. We need to make sure that more and more people buy health insurance through conversations. That is why the focus is on agents. The second big change is of course digital and technology, which have changed the landscape of transactions. Today, digital technology is at the heart of business, whether it is issuing a policy, settling a claim or ensuring the renewal of a policy. Over 90% of payments are now made digitally. The third change concerns health care itself. I think more and more people are feeling comfortable, for example, with telemedicine, video consultation. People are comfortable in these modes.

How has the stand-alone health insurance segment evolved in India?

I think independent health insurance companies will continue to do well. It is my firm conviction. If you look at retail health insurance, almost 50 percent of retail health insurance is now underwritten by independent companies. I think this segment will become more important in the future. The simple reason is that health is specialized. In addition, it is a very complex industry and specialization and guidance are very essential for the long-term success of the company. This is why I personally have the feeling that mutuals will slowly but surely become specialists. If we look at the major health insurance companies in the United States, companies like United Healthcare, Anthem, Aetna, Cigna, and Kaiser Permanente, among others, are all specialists in the health insurance segment.

Is there a shift from protection to prevention and also niche segments?

I think it was there even before Covid-19. This is something that the Indian regulator started some time ago to focus not only on protection but also on prevention, including welfare. In various ways, companies also encourage healthy habits and behaviors and on the basis of which companies also offer special benefits. So I think this change has already happened. There is also a market for niche or segment products. The big challenge here is to find the distribution and the effective means of reaching the customers. I can create a product targeted to a certain segment, but I have to find a way to deliver it to end customers.

How do you try to be different from the competition in health insurance?

First, innovative and segmented products will be our USP. I think this is something that we have already started to execute. The second differentiator is our distribution diversity. We now have 15 bancassurance partners. In addition, we have a very solid network of agencies, which is growing. The third is the technological push. We have invested heavily in technology and developed capabilities to run our business digitally. On the product side, we have products for the HNI, the affluent elderly, the mass affluent and the masses. Overall, diversity is a big differentiator of Niva Bupa.

What will be your main areas of intervention in the future?

On the product side, our goal is to launch a product every quarter. We will continue to strengthen our distribution network as we have just announced our expansion for the southern market. We will also participate in the government program to reach the bottom of the pyramid. Since talent will be a key ongoing challenge in this business, we will focus on quality talent to ensure we are able to execute our plans to achieve the desired gross premiums (GWP) target of 5. 000 crore ₹ by 2023-24.

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