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India's health insurance sector is viewed as the fastest growing segment in non-life insurance business, with 39% CAGR over the last five years. Max Bupa, a joint venture between Max India and UK's healthcare services giant, Bupa, feels that its expertise in this market as a stand alone health insurer will give it an edge over its competitors. In an interview with FE's Debojyoti Ghosh, the company's CEO Damien Marmion talks about the sector's potential and his plans for breaking even in five yearsIn India, it is estimated that only 2% of the population has health cover. What kind of growth do you foresee for Max Bupa in such a market?Yes, Indian health Insurance market is still in a nascent stage. However, we see it as a market of huge potential as well. With a penetration of under 3%, 97 % of the population still needs health insurance. Being a standalone health insurance player, we have the advantage of specialization in this space. We have close to 400 hospitals where customers can avail cashless treatment and intend to increase this to 600 by the year-end. Our marketing spend in the first year will be to the tune of Rs 20 crore.We are confident about breaking even in five years.How do you plan to tap into the retail and corporate segment? What will be your distribution channel?We have started with one retail product 'Heartbeat' which is available in three variants for both individuals and families. Within this year we will introduce newer products for the group and rural segments. We are open to offering our services both with collaboration with the government and on our own.Which markets will you be targeting for expansion?We are focusing on a national footprint and not a regional one. We have started operations with key centres and aim to be present in 20 cities in the next three years.What are your investment plans?The plan is to invest Rs 700 crore in the first five years of operations, of this we have already invested Rs 151 crore.What are the major challenges for the sector? And what are your plans?There are many challenges facing the sector: the lack of data availability in standardized forms, on disease and usage patterns of different socio-economic segments in India poses a challenge for future innovations in product development. Absence of standardization of healthcare costs leading to under pricing of insurance products and higher value of claims, low levels of awareness among the consumers about health insurance products and their benefits.How do you see the health insurance market evolve in India?Health care has a lot of ground to cover. There is a need to build awareness so that people start looking at health insurance more than just an investment or tax saving option and look at it as risk insurance. As the market matures — there will be more product innovation like move towards more targeted products to cater to life stages and requirements.
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