Segment-based health products will be our path: Niva Bupa CEO Krishnan Ramachandran

Standalone health insurer Niva Bupa Health Insurance (formerly known as Max Bupa Health Insurance) has been recording a growth that is significantly higher than industry figures. It grew 70 per cent in FY21, as compared to the industry growth of 41 per cent, supported by strong retail business.

It has embarked on big expansion plans to sustain its growth on the back of growing penetration of health insurance in the country. Krishnan Ramachandran, MD and CEO, Niva Bupa Health Insurance, spoke to BusinessLine about the market, Covid disruption, opportunities and the company’s plans. Excerpts:

Firstly, awareness on health insurance has gone up quite sharply. But growth has moderated. Last year, the industry growth was 40 per cent in retail, but this year that growth has come down to 18 per cent. This is still a conversation-led business. We have to make sure that more and more people buy health insurance through conversations. That’s why there is a huge emphasis on agents.

The second big shift is of course, to digital and technology, which has changed the transaction landscape. Now, digital is at the core of business – whether it’s issuing a policy, settling a claim or servicing a policy renewal. More than 90 per cent of the payments are made in digital mode now.

The third shift is on healthcare itself. I think more and more people are becoming comfortable with, for example, telemedicine, video-based consultation. People are comfortable in these modes.

I think standalone health insurance firms will continue to do well. That is my firm belief. If you look at retail health insurance, close to 50 per cent of retail health insurance is now done by standalone companies. I think this segment will assume greater importance going forward. The simple reason is that health is a specialised one.

Also, it is a very complex line of business and specialisation and focus are quite critical for long term success of the business. That’s why I personally feel that health insurance firms will slowly but surely become specialists. If we look at the big health insurance companies in the US like United Healthcare, Anthem, Aetna, Cigna, and Kaiser Permanente, among others – they are all specialists in the health insurance segment.

I think this was there even before Covid-19. That is something that the Indian regulator started some time ago to lay emphasis not just on protection but also prevention including wellness. Companies in various ways are also encouraging healthy habits and behaviours and based on which companies also offer special benefits.

So, I think that shift has happened already. There is also a market for niche or segment-based products. Here, the big challenge is finding the distribution and effective ways to reach customers. I can build a product targeted at some segment but I need to find a way to take it to the end customers.

Firstly, innovative and segment-based products will be our USP. I think that’s something we have started executing already. The second differentiator is our distribution diversity. We have now 15 bancassurance partners.

Also, we have a very strong agency network which is growing. Third is technology push. We have invested significantly in technology and have built capabilities to run business digitally.

On the product side, we have products catering to HNIs, affluent, mass affluent senior citizens and masses. Overall, diversity is a big differentiator of Niva Bupa.

On the product side, our objective is to launch one 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 scheme to reach the bottom of the pyramid segment.

Since talent will be a key ongoing challenge in this business, we will focus on quality talent to make sure that we are able to execute our plans to achieve the desired gross written premium (GWP) target of ₹5,000 crore by 2023-24.

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