With the health insurance sector on its way to perhaps becoming the fastest non life insurance segments, more companies are joining hands to make their presence felt in the market.
In a bid to diversify its portfolio and bolster its presence in the insurance domain, Religare Enterprises Ltd and Swiss Reinsurance Company have decided to develop a health insurance joint venture in India.
A binding agreement to this effect was signed recently between the two companies. With the outlook on the Indian health industry remaining positive and expectations of a Compound Annual Growth Rate (CAGR) of around 25 per cent by 2015 and have an expected market size of around Rs 28,000 crore, the companies view it as the opportune time to make a sound base for them in the country.
The going for the sector has not been hard all this while as well. The health industry registered (CAGR) of around 40 per cent in the six years to financial year 2007-08. All this because of the ever changing market scenario in India, including specialized health insurance companies, economic trends, regulatory changes and others.
According to the agreement, Swiss Re will be a minority shareholder and seek to provide its actuarial, risk management and underwriting expertise to the new venture and aims at going ahead with the company’s commitment to the development of the sector with special focus on India.
Officials are of the opinion that the proposed joint venture will seek to commit sufficient investment to achieve a successful launch of the business. Both the companies however anticipate that the entire project would be operational by 2010.
Sunil Godhwani, CEO & MD, Religare, said, “The joint venture is a clear recognition of our vast distribution capabilities in India and our domain expertise in the healthcare sector through our other group businesses.”
The health insurance industry collected premiums of Rs 5,100 crore during financial year 2007-08. The figure gains significance as only a meager percentage of around 2 per cent of Indian population have private health insurance.
Through this joint venture, Religare expects to become one of the country’s leading companies in the health sector. The company’s confidence can well be understood as its other businesses like Fortis Healthcare Limited, Super Religare Laboratories Limited and Religare Wellness Limited already possesses expertise in the India health market.
On the other hand, Christian Mumenthaler, Swiss Re executive board member and head of life & health underwriting, said, “Swiss Re’s interest in a health insurance joint venture is also a natural extension of leveraging our actuarial and underwriting expertise in the Indian market.”