Digital space to offer big opportunity in future!
7^th October 2009

Over to Q & A session.

Many believe that health (including health insurance) should be the second biggest national issue after education. What role media companies like us and standalone health insurance company like yours can play to enhance the cause of health insurance?

We are moving away from the times when the health insurance was literally bought. Now we are graduating from that end to an era where it is more of selling the need rather than just marketing and the same has created a lot of awareness. We are on the right path. So Companies like ApnaPaisa are using the power of the net to broadcast the utility of the insurance and to educate the potential customers what they should be looking for. There are so many companies in the health insurance space - general insurance, life insurance and specialist companies like ours. There are a number of policies and every policy has number of pages to read which can be quite confusing for the customers. You encourage people to look at the critical points which we appreciate and also we encourage people to compare price and features before opting for any policy.

What you as a company and as an industry are doing to increase the penetration level which is fairly low currently?

Let me tell you that penetration levels have increased recently. Being in this industry since 1996 when insurance premium was just Rs.100 crores, health insurance achieved Rs. 8000 crores premium at the end of last year. There has been tremendous progress. But is it adequate ? No. It is far from adequate. The pace has to increase dramatically. The responsibility for this has to be shouldered right from Government, health insurers, and health care service providers to customers. This is an issue which is going to hit us over a period of time in a big way. We have a major percentage of young people, when this young population will move in the age group of 40-50 years then what will happen? They will need healthcare assistance.

Yes people who matter are realizing the importance of health insurance.

How can these penetration levels be enhanced?

The insurance industry right from the regulator onwards, should invest in increasing the awareness of health insurance. For players, there is a need for marketing the products and services, besides earmarking some resources for educating the consumer. Organizations like CII and FICCI are playing an important role by organizing conferences which are getting publicized on the internet and in the media. This way all the stakeholders are playing a role. Being a specialist company, we will be making investments in this area and do what we can in our capacity as a corporation to raise the awareness to understand the requirements. We will blend this with right product and service through efficient distribution channels.

What roles do you perceive for Apollo DKV in the current scenario ?

We have a long way to go…there is lot to be done as an industry, as an insurer and with the regulator. We have about 8000 individual agents, who are our main sales people. We have been focusing on the individual insurances and for that we have many innovative products backed by network of about 24 offices, 400 odd staff and growing.

This way we are reaching out to customers in our own way.

We are looking at the penetration levels currently for which we have to work with the regulator and hope for some major changes. We have been actively following up with regulator to allow us to sell through banks and financial institutions even if they already have a bancassurance tie-up with a general insurance player. Probably when regulations happened, the provision was not made for the third group (referring standalone health insurance players). We hope that the regulator sees merit in our argument, Once that happens then we will get access to fairly big geography. As a standalone company, the cost of running the branches is significantly higher as compared to any other life or general insurance company because it is a single product.

What is your view on the long gestation period?

The general insurance company’s gestation period is 4-5 years whereas life is of 10 years and ours is closer to life companies. If we are supported with the rules and regulations which permit us to reach geographies we want to do it at a faster pace which is difficult with opening physical branches. This will help increase penetration. We see opportunities in the internet space which you are in (Ref: ApnaPaisa) - the digital space. It is a positive sign that sales through Internet usage are picking up. This is something in which we are looking at investing into as it will eventually lead to higher penetration levels. We are aiming substantial increase in our reach and book size in next five years.

It is a general perception that nationalized companies are better for general insurance. How do you view that?

Perception is perception, it depends on whom you ask and what their perception is. Today the service levels are such, that if you have an accident you should get the claim within few days. The times are changing, people need good service.

We are in this space because we are confident that we offer superior products and services and growing at a level which is quite satisfactory. We are confident of reaching there in few years time. There are lot of people out there who will be excited about what an insurance company which is specialist in the field can offer and these are the people we intend to speak to.

How does it help in devising the product offering for your customers given your parent’s (Apollo hospital group) huge experience with specialized health care?

In India, particularly in health insurance, very little science and statistics has gone into making of the products and services. The products are being sold but the question is how much research has gone into devising these products? Yes, it is a great opportunity to have parents, in India, leaders in health care industry – Apollo family - in this part of the world. On the other side, the player – DKV who is the largest re-insurer in the world and largest primary health insurer in Europe. We see tremendous advantage in terms of understanding the health care industry by way of having access to patients, to doctors and to potential customers. This has empowered us with launching a bouquet of many unique products which will provide us competitive edge. The products will be based on local knowledge of the health care industry combined with global expertise of pricing. We are a specialist company and our vision is to provide innovative solutions to the citizens of India, not to a specific group of people.

E.g. Apollo DKV has policy for lifetime coverage called ‘cradle to grave’,policy covering for dentals and spectacles and health check up once in two years.

What should be the optimum sum assured for an individual in health insurance and what are the parameters one should keep in mind before choosing the sum assured?

There is no easy answer to this as each one has to look at his or her individual situation. There are a number of parameters that affect the risk level you faceand consequently the protection that you need. Some of these factors include the city you are located, the age bracket you are in and the lifestyle you are following. The younger you are, the more flexibility of starting with lower sum insured and increasing it over time but healthcare should not be compromised.