New Delhi: Private insurer Aviva Life Insurance Co. India Ltd plans to jump onto the health insurance bandwagon in the country, the company has said.
“We are looking at health and traditional plans as the next growth drivers for the company,” said Vishal Gupta, associate marketing director of Aviva India, a venture of fast-moving consumer goods firm Dabur India Ltd and the UK’s leading insurance group Aviva Plc.
Gupta did not set a date for introducing the company’s health insurance products. “We are in the early stage of discussions and, therefore, can’t give deadlines for the launch,” he said.
This year has already seen three insurers—Life Insurance Corp. of India, Max New York Life Insurance Co. Ltd and Reliance Life Insurance Co. Ltd—launch health insurance products.
India presents huge opportunities for health insurers since barely 14% of the population has any kind of health cover, according to a recent report by management consulting firm McKinsey and Co.
Of the 14%, only 15-20% own individual covers and the rest are covered under community, social and government health schemes, according to the India Insurance 2012: Fortune Favours the Bold report.
It is, therefore, not surprising that life insurers are avidly eyeing the health insurance business.
With unit-linked insurance products (Ulips) as its mainstay, Aviva India currently earns a minuscule 2% of its revenues from so-called traditional products, said Gupta.
Unlike Ulips, which provide capital market-linked returns to policyholders, traditional products guarantee a fixed return plus a bonus on the sum assured.
Currently, private insurers earn around 10% of their income from traditional products, Gupta said.
“As we are expanding business in tier II and tier III cities, there is more demand for guaranteed-return products,” said Gupta.
“At present, we have three traditional products in our kitty but we are working to strengthen the portfolio with more products and higher contribution from traditional products.”
The company infused Rs246 crore as capital in January, taking its equity base to Rs1,004.50 crore. It intends to use the fresh capital to open branches and appoint agents.
It has 192 branches and 30,000 agents, which the firm plans to increase to 222 branches and 66,000 agents by the next financial year that starts 1 April 2009.
Aviva India has underwritten Rs100 crore in February, compared with Rs62 crore in the same period last year and Rs90 crore in January, data released by the country’s Insurance Regulatory and Development Authority shows.
The insurer has earned Rs838 crore in premium till February compared with Rs583 crore in the same period last year, the regulator has said.