Aditya Birla Health to Keep off Discounts in Group Insurance

Aditya Birla Health Insurance, which received a licence from the Insurance Regulatory and Development Authority of India (IRDAI) in July 2016, is looking to have a higher mix of retail products in its portfolio. The company doesn't want to offer products at unsustainable pricing, CEO Mayank Bathwal told Moneycontrol. “In the group health insurance space, we do not want to play the pricing game. What is the point of buying business? While we will be present in the group health space, we do not want to do it at the cost of our overall economics. That is a clear no-no for us,” said Bathwal. Group health insurance is a product that is offered to corporate customers and is renewed yearly with a change in the premium. The premiums are dependent on how the claims have been in the previous year. In the past three to four years, there has been a consistent trend of some insurance companies offering heavy discounts to corporates to retain their business.

This has not only led to losses in the group health space but also brought in unsustainable pricing. However, Bathwal said that there has been some improvement in the group health pricing. Further, he added that the proportion of retail business is increasing every year. Aditya Birla Health Insurance, a joint venture between the Aditya Birla Group and MMI Holdings of South Africa, would like to have a larger mix of retail business in the long term, he said. Bathwal said while that at an early stage of their business, the overall aim is to focus on getting the distribution infrastructure in place. “Our goal is to have health insurance as an enabler of one’s health. We realised that we should make health insurance relevant for the masses,” said Bathwal.

“Going forward, how well we build our distribution reach is key. We have started with 7 cities with our own agencies. We are tying up with brokers and also in talks with banks for bancassurance tie-ups,” said Bathwal. The insurance company has started with an initial capital of Rs 250 crore and Bathwal said that this will help them to keep grow in the near future.