“The Indian health insurance market is one of the fastest growing portfolios among the non-life insurance category, but still is significantly under-penetrated in comparison with other countries.â€
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Antony Jacob, CEO, Apollo Munich Health Insurance Company Limited is a Chartered Accountant, besides being a graduate from Loyola  College, Chennai. Before joining Apollo Munich in 2009, Antony was a Regional Finance Director, Asia & Middle East, based in Dubai, for the  RSA Group. Between 2004 and 2007, Antony was the Managing Director of Royal Sundaram Insurance in Chennai, a company he was  involved with right from its inception. Antony’s 26 years of professional career spans across diverse industries and companies such as ITC, the  Continental Grain (now part of Cargill) and the RSA group. Antony is a member of the Young Presidents Organization (YPO International) and  is an avid sportsman who enjoys a game of tennis or golf in his spare time.
Apollo Munich Health Insurance Co. Ltd. is a joint venture between Apollo Hospitals Group and Munich Health, Munich Re’s newest business  segment. The company offers comprehensive health insurance plans for individuals and their families as well as for corporate houses. The  company also offers individual personal accident plans and travel insurance for individuals, families and senior citizens. Apollo Munich is a specialized health insurance company in India that has expertise in both health and insurance and is able to leverage this understanding for the benefit of its customers. With over 8,500 beds across 54 hospitals in India and overseas, neighbourhood diagnostic clinics, an extensive chain of Apollo Pharmacies, medical BPO as well as health insurance services and clinical research divisions working on the cutting edge of medical science, The Apollo Hospitals Group is Asia’s largest integrated healthcare provider.
Replying to Yash Ved of IIFL, Antony Jacob says “The Indian health insurance market is one of the fastest growing portfolios among the non-life insurance category, but still is significantly under-penetrated in comparison with other countries.â€
Give us a broad overview of the health insurance industry?
In the past few years, the Indian health insurance industry has witnessed tremendous growth and increased focus from all stakeholders, not only from insurers and the regulator, but from the entire ecosystem including the customers and the providers. Interestingly, there is an increase in the number of people who have started to acknowledge the importance of having a health cover.
In 2011-12, the Indian health insurance market had managed to hold ground despite the economic slowdown and registered a double digit growth of 20% as compared to the growth rate of around 33 per cent in the previous year. It continues to be the second biggest segment of the non-life insurance industry and contributes about 23 per cent of the total premium. Health insurance premium collections touched roughly Rs. 1,33,000 mn in 2011-12, compared with Rs. 1,10,000 mn in the previous year.
According to our estimates, the health insurance segment in India is expected to grow at a CAGR of 25 to 30% over a period of three to four years. Factors such as growing per capita healthcare spending, epidemiological transitions and change in the demographic profiles shall also support the health insurance industry to make strong headways and post healthy growth rate.
In the current situation, what are the opportunities and challenges?
The Indian health insurance market is one of the fastest growing portfolios among the non-life insurance category, but still is significantly under-penetrated in comparison with other countries. With such low penetration level, the health insurance segment remains at a nascent stage. Therefore, the task of insurance providers in this segment is twofold in the marketplace – one, increasing awareness amongst people and two, increasing premium collections from those already insured.
This twofold objective can be addressed through innovation and development of health insurance products that meet the needs of India’s large population. Our diverse nation has various segments of population with different needs that cannot be met by a single solution as one product no more fits all. Insurance companies have begun to offer specialised products with variants that are aiding in increased penetration and premium collection, albeit at a slow pace.
What steps should the regulator take to boost the sector?
Although the number of players in the health insurance segment has been steadily increasing, the increase in penetration is not gaining as fast. Merely 5 percent of the Indian population is covered by some form of health insurance. We believe that a major hindrance to penetration has been the inability of insurance agents and brokers to reach across to all segments of population across the country. To increase awareness, followed by coverage across the country, from metros to non-metros and smaller towns, a stronger distribution network is imperative, other than brokers and agents. The need of the hour is to adopt the bancassurance channel which will allow banks to tie up with more than one insurer.
What are the new launch products for FY13?
Our product Optima Restore, which was launched in early 2012, has created ripples in the industry for its unique benefits and restore feature. It is perhaps the biggest innovation in the segment till date and stands among the fastest growing health insurance plan in the country.
One segment that has not been tapped by most insurance companies is the massive senior citizen population, when illnesses and ailments begin taking a toll on the health. A large part of this segment may have missed out on opting under a health insurance plan before they reached the age of 60 and hence this section is new and willing to invest in health insurance now. Apollo Munich believes that this segment is a vital customer base and is working on products that would appeal to them.
However, the ultimate space for any insurance company would be to cater to the needs of disease management products. We at Apollo Munich acknowledge this need and would work towards developing a solution for the same.
Having said that, we believe our basket of products is comprehensive and innovative to cater to the differential needs of the market. Nevertheless, we would constantly work towards getting customer feedback and develop new products for the changing needs.
What are your expansion plans?
For the year 2012-2013, we aim to sustain our growth rate that we have achieved during the year just gone by. We strongly believe that retail is the way to move ahead, combined with a profitable group business. We expect to build on our already strong agency network to boost our retail business across the country.
What is your marketing strategy?
This year, being our fifth year in the health insurance segment, we plan to focus our energies towards ensuring that health insurance penetration increases by a large number. Our aim is to substantially grow our consumer base during the current financial year.
Comment on your distribution channels?
Our agency sales force is the most dominant of all our retail channels and helps to generate maximum part of the retail premium income for the company. There are over 30,000 agents working across the country and this number should increase consistently every year till we reach about 50,000 by 2014-15.
In which of the cities are you planning to expand your business?
We are already present in the top 30 cities where we are able to tap the largest segments of our potential customers. At present, we intend to strengthen our presence in these 30 cities rather than expanding into more cities.
What are your views on foreign participation in insurance?
We believe that an increase in foreign direct investment in the Indian insurance sector to 49% from the current 26% will help the market to expand significantly.
Comment on your capital infusion plans?
We have sufficient capital levels at the moment, and have no plans to pump in any more capital in the near future. Our promoters will decide what the right time is for our business expansion.
Brief us about your financials?
Apollo Munich has had a great 2011-2012. The goals that we had set for ourselves in terms of customers, people, business model, value proposition and brand have all progressed well. It is heartening to note that our products were consistently rated as the best in the industry. Our research showed a consistent growth in customer satisfaction levels throughout the year. As for the financials, we kept ahead of our targets and closed our books at Rs. 4758mn for the year 2011-12 which equals to a 68% growth over the last year.
