The Hindu Business Line : Max India inks pact with UK co Bupa for health insurance

Health insurance venture: (From left) Mr P. Chidambaram, Union Finance Minister; Mr Ray King, Chief Executive of Bupa; Mr Analjit Singh, Chairman, Max India; and Mr Richard Staggs, British High Commissioner to India, at the signing of the agreement in New Delhi on Wednesday.

Our Bureau

New Delhi, Sept. 4 Max Bupa Health Insurance Ltd (Max Bupa), the newly formed joint venture between Max India and UK-headquartered British United Provident Association Ltd (Bupa), expects to roll out its first health insurance policy in about 12-15 months from now, Mr Analjit Singh, Max India Chairman, said here on Thursday.

As a pure health insurance provider, Max Bupa aims to have a million customers in about three years from the date of commencement of operations, i.e. from the date it issues its first policy. Mr Singh said that the timing of entry into this space was right and pointed out that there were very few pure play health insurance companies in the country.

The joint venture company plans to cater to health insurance needs of individuals and to look at retail and corporate groups. Indications are that the company may eventually come up with products that would cover areas such as out-patient, diagnostic, wellness and prevention.

The joint venture agreement was signed between Max India and Bupa here on Wednesday in the presence of the Union Finance Minister, Mr P. Chidambaram, and the British High Commissioner to India, Mr Richard Staggs. For signing the agreement, Mr Ray King, Chief Executive of Bupa, and Mr Dean Holden, Bupa Asia Pacific, were in India.

Max Bupa has been initially capitalised at Rs 100 crore, the minimum capital amount for non-life insurance ventures. While Max India has a 50 per cent stake in the joint venture, Bupa Group has taken a 26 per cent stake. The balance 24 per cent stake is with Mr Analjit Singh and his associates.

On whether Bupa could raise stake in the venture, if the FDI cap were to be changed, Mr Analjit Singh told reporters here that Bupa has the option as well as the right to increase its stake to 50 per cent. But this would depend on the way the insurance sector reforms pan out in the country.

“In the current Insurance Act, health insurance is not recognised. There is life, non-life and reinsurance. When reforms come, health insurance is expected to be recognised as what we call as stand alone health insurance. It remains to be seen whether health insurance will have the same provisions on FDI caps and initial capital as specified for life and non-life,” Mr Singh said.

In India, there is practically negligible health insurance and less than 2 per cent of health insurance sold in this country is at retail level.

To seek approvals

Max Bupa will seek R1, R2 and R3 approvals from the Insurance Regulatory and Development Authoritythrough the non-life regulatory side. On whether the product would be rolled out across the country, Mr Singh said that it would be a region-wise phased rollout.

He also clarified that Max Bupa would not confine its tie-up with health care providers to facilities within the Max Healthcare network alone.

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