How do you see the potential of stand-alone health insurance operation in India? What are the advantages for this operation model?
At present the health insurance sector is characterized with very low penetration (only 3% of the Indian population is covered with some insurance cover), high out-of-pocket expenses and steep medical inflation (which is much higher to general inflation). It is estimated that 80 per cent of the healthcare spending is actually an out-of-pocket expense for individuals. On the other hand, changing demographics, affluence and work-life balance in India has brought about a paradigm shift in attitudes and demand for better and the best quality of healthcare. Health insurance as a mechanism to finance is therefore finding greater acceptability. Thus the market has great prospects, but the need of the hour is to identify products that will suit customers’ insurance needs and win their confidence.
We believe that through our model of joint venture we will be able to understand the health care financing requirements of this country. Our parentage helps to understand how health care financing through insurance has worked in similar countries overseas through the support of Munich health. This unique blending brings in products and services to this country which is fully researched and tested in other markets. So we do believe that we have the advantage and we have rolled out few of our products which is reflects the blended advantage of the two specialist parents we have. We will continuously innovate and bring in expertise which we believe would be possible only through this unique combination.
What were the factors driving Munich Re to form a stand-alone health insurance company with Apollo Hospitals Group in India?
The Munich Re group was keen to partner with a brand that shared similar interest in pure health insurance and had a strong provider background, India knowledge and a strong brand equity.
The Apollo Hospitals group, the premier healthcare brand and “architect of modern healthcare” was known for its good reputation for innovative and high-quality healthcare services. In the Group Munich Re identified complementary strengths which have added value to the Joint Venture.
On the other hand, Apollo examined the global market in search for a technically strong partner and found that in the Munich Re Group, DKV was an appropriate choice considering the common commitment to operate in the pure health insurance space.
The Long experience of Munich Re in areas of product innovation, technical expertise in underwriting, actuarial skills etc complement Apollo’s strengths in the Indian market and hence the fit is strategic and perfect.
By Mr. Antony Jacob,
Chief Executive Officer