New Delhi: British health insurer Bupa (formerly known as the British United Provident Association) will start selling health insurance products in India next year through its joint venture with Max India Ltd, in which it holds a minority stake of 26%. Ray King, chief executive of Bupa, who was in India recently, and Damien Marmion, chief executive of the Indian joint venture, spoke to Mint about the company’s India strategy. Edited excerpts.
How many countries are you present in?
We sell in 200 countries and we are on the ground in considerably less. Bupa has developed enormously over the last 10 years. Even going back 30 years, we have been in Hong Kong for 30 years, in Spain for 20 years. So, a long heritage of looking outside the UK. Half our business now is outside the UK.
Could you place the Indian market in a global context? Which are the markets that could be compared with India?
We go into markets where we think we will have a significant influence. The thing that’s really attractive about India is the scale of the market, but also it is a market where health insurance is really nascent. The opportunity to get in and have a significant influence is very bright. Looking to the 21st century, clearly it is going to be the century for Asia overall. So, we have looked at India and, indeed, we are looking at China as well.
Specifically coming to India, we have had health insurance for a long time, but it hasn’t really taken off.
Worth his while: Bupa’s King finds the scale of India’s market and nascent health insurance sector attractive. Ramesh Pathania/Mint
My impression of the Indian market is that the products actually haven’t been great. We are very focused on being a quality offering. We want to be very straightforward with customers, we don’t have any plans to use TPAs (third party administrators), we do it all ourselves. This is our core business, we are all about quality, we are all about what you see is what you get. I firmly believe with customers you have to build trust and trust means a long-term relationship. I think this market will develop.
We are certainly very cognizant in India and China, the burden of chronic disease is growing at a hectic pace. If I wind the clock forward, 10 years, 15 years, I would like to think we would start with a very good private insurance offering.
Other than quality of products, what are the other features of Indian market that stand out, positive or negative?
When we look from a strategic point of view, clearly it is a big market where the products that we bring, there is a significant population that wants that. We are here to provide choice and control in healthcare. We believe there is a worthwhile market to go for. When we go into a market, we don’t want to be a small player, we want to be a significant player. The thing I find particularly attractive about India is it’s a market of huge potential in the medium term, but one by getting in quite early where we have the opportunity to be what we want to be, the best healthcare company. For us it all about finding where our skills can be applied in markets that will give us a good position in that market, which will give us growth, allow us to influence the market.
When you approach a small but quite fragmented market such as India, what’s your strategy?
It is small and you have to take a medium-term view. When you approach any market, you look at the economics of the market, you look at the political dimensions of the market because healthcare in every market is politicized. Some markets we find very private healthcare-friendly, some not.
Then, what is the state of the market at this time and what can be great differentiation? We never seek to be a me-too player.
In India, you are not going to operate through TPAs. How does that fit in with the fact it is a very price-sensitive market and costs are going to be a big issue if you do everything on your own?
Damien Marmion: The key essence is quality which is very important here. For example, most of the complaints that go to the Irda (Insurance Regulatory and Development Authority) are about the way the claims are processed. Most of those are ones managed by TPAs. We are saying we are not going to manage through that process, we are going to fundamentally come up with a better product proposition, link them to a quality network, knowing who the customer is and knowing who the insurer is. There is no middle person here.
Fundamentally, what value do TPAs add? I can replicate that by doing it ourselves, controlling it and learning through that process. What do you do by giving it to TPAs? You give them a learning.
Is it your global practice to avoid TPAs?
We firmly believe in remaining very, very close to customers. We don’t want anybody in between. We want our brand to be out and we want to be very much in the customer’s face.