As the Chief Executive of a
standalone health insurance company, what are your key priorities? And your key
challenges?
At Max Bupa, the health of our customers is our top priority. It is our constant endeavor to be there during the time of need. Our calendar event Max Bupa Walk for Health reflects our commitment towards creating consumer awareness that ‘health is an asset worth protecting.’
With a penetration level of 7-8 percent, the biggest challenge the health insurance industry is facing is low consumer awareness and prevalence of myths. People need to understand that with inflation in healthcare costs and increase in the incidence of lifestyle diseases, health insurance will be beneficial in covering the treatment cost. However, the two key challenges the industry is currently facing are poor penetration and perception.
The reality is that most people in India do not have health insurance and more than 70 per cent of healthcare expenses are self-funded. Even in other poor and developing countries, the ratio is not this high. The cost of health insurance is usually a fraction of the medical cost one has to pay. To protect and guard against rising medical inflation, one should buy the policy early in life, by 30 or 35 years. This is primarily for two reasons: The customer will not only be serving out the waiting period at a much younger age, but there is little risk of being refused a policy.
How have you faced the challenge from large established players?
Innovations in product and service offerings along with focus on quality of service have helped us build a reputation and grow as a business. We have introduced many industry firsts like any age enrolment, lifelong renewability, and maternity benefits among others that have now become industry norms. Our Family First is a product that was designed for the Indian joint family, where 13 relations are covered in one policy.
Yes, there is competition but the fact remains that penetration of health insurance in India is very low and there is need to create awareness and spread reach of insurance.
What needs to be done to increase the health insurance penetration?
It all starts with customer education and awareness about the growing need of a health insurance amidst increasing medical inflation, rising healthcare costs and an equally alarming increase in the lifestyle diseases. The regulator and government have created an admirable path. This is reflective in the recent standardization guidelines that emphasizes on customer centricity, transparency and have streamlined the industry. A robust and vibrant distribution model too is imperative for deeper proliferation so that the health insurers can reach even the remote areas. The changing regulatory environment and opening up of new channels of distribution like bancassurance will also propel the growth of the sector.
As IRDA is considering increasing the tenure of health insurance products up to 5 years, tell us what would be the impact of this move in the health insurance industry at a stage when the cost of treatment has been spiraling?
This is a welcome move. Healthcare cost changes every year and health inflation is a key point in our business. I can't tell you which new drugs, procedures or types of treatments that will come up in 3-4 years. So if I write a long-term policy, the risk is that I may get it completely wrong. To avoid such a situation, the available option will be to adopt a lump-sum approach that hedges bets in a different way. For a company to be sustainable over a long time, we need economic returns on these policies, and that's why long-term policies haven't done well around the world.
Adviser productivity is a major challenge. How do you deal with advisers with low productivity?
Max Bupa emphasizes on training and provides efficient training to their agents. In insurance sector, the customer requires advisory and consultancy to suit their specific requirement. A lot of emphasis needs to be given on understanding of the segment. We at Max Bupa have special training modules which ensure that agents are adequately trained to handle customers. We run an innovative engagement programme for the agency force called Agency Priority Circle. The initiative helps to identify and encourage the top performers through a quarterly recognition platform and engagement with the senior leadership team, in turn helping us drive better mind share and loyalty.
How many agents do you have? What are your plans on strengthening your distribution team?
Our agent base has grown to 10, 000. We have a strong presence in 13 cities with 21 dedicated branch offices and tie ups with over 2500 quality hospitals. Through a multi-channel approach, we are reaching out to customers across the country. Our focus is to reach out to people through every possible distribution channel like direct sales, corporate agents, agency force, online and telesales.
How do you plan to increase your footprint in tier II and tier III cities?
Max Bupa has entered into the fourth year of business operations and in the last three years we have steadily grown our customer base and product portfolio. We will continue to cater to the burgeoning demand from Tier II and III cities through products like Max Bupa Health Companion with differential premium. We follow a multi-channel approach to reach out to customers wherever they are and our tele-sales channel already has customers from 500 cities of India.
Premium collection of Max Bupa has increased by 64 percent in the first quarter of FY 14. How do you propose to sustain this momentum?
We have completed three years of business operations and have witnessed an exponential growth on all parameters – be it business revenue, product portfolio, number of customers, offices, agents, network of quality hospitals and our team. Currently, we have a customer base of 1.3 million.
Right from the beginning, we have been focused on three things. First, to have the best health products in India in terms of design and features; second, to offer best in class personalized customer service benchmarked against international practices; and third, to reach out to people wherever they are through all possible distribution channels like agency force, telesales, online or directly.
We will continue to introduce comprehensive products based on customer feedback for retail and group segment. We are also actively seeking partnerships with banks to reach out to a wider customer base.
