25 November, 2016 | The Hindu BusinessLineShare
Ties up with South African firm MMI
Aditya Birla Financial Services Group (ABFSG) on Thursday announced the launch of its standalone health insurance arm under the brand Aditya Birla Health Insurance (ABHI). The new business segment is a joint venture between the Aditya Birla Group and MMI Holdings Ltd (MMI), a diversified financial services company in South Africa.
Ajay Srinivasan, Chief Executive - Financial Services, ABFSG, said the company''s new health business vertical enters the Indian market with a differentiated business model. It offers not just health insurance to a wider set of customers but also encourages them to change their attitudes towards lifestyle and health.
The Aditya Birla Group and MMI are in a 51:49 joint venture with Rs.250 crore of initial capitalisation. Mayank Bathwal, CEO, ABHI, said in a press conference announcing the launch that the new insurer’s philosophy will be to reward healthy behavior with incentives, safeguard health by guiding customers to manage chronic lifestyle conditions better, and provide easy, cost-efficient access to healthcare through digitised processes.
The company plans to have a multi-channel distribution model across agency, broking, bancassurance, direct marketing, online channel and more. The agency channel will start with nine branches across the top seven tier-1 cities and will expand reach in a couple of years. Its network of hospitals is spread through 150 cities.
Bathwal also said that ABHI will price its policies within the existing price range that competitors have c;reated, adding that the group''s insurance plans will be neither very cheap nor very expensive.
Srinivasan said the company hopes to break even within five-six years, ahead of the industry’s average breakeven period of seven-eight years after commencing business. However, the Rs.27,000 crore health insurance market has proved a tough nut to crack, with existing players finding it hard to turn profitable. ABFSG ranks among the top five fund managers in India (excluding LIC) with an AUM of Rs.217,840 crore as on September 30, and has a lending book of Rs.31,823 crore.
As on March 31, 2016, ABFSG reported aggregate revenue from businesses at Rs.9,299 crore and profit before tax from established businesses, in excess of Rs.1,110 crore. Srinivasan said the group would launch its payment bank business by the first half of the next calendar year.