Now with every calorie you burn, you will get a discount on your next health insurance premium. Sounds interesting right. This is the business model of the new entrant in health insurance, Aditya Birla Health Insurance (ABHS) which was launched today in Mumbai.
ABHS Health Insurance is a joint venture between Aditya Birla Financial Services and South African health insurer MMI Holdings. MMI holdings owns 49% stake in the joint venture.
In order to differentiate its services from existing health insurers, ABHS Health Insurance is encouraging people to get fit. Under this model, the company will reward people with good health. MMI Holdings has tested this model in overseas markets and is keen to launch it in India.
The company encourages its policyholders and prospects to use a mobile application to monitor the calories burned in a day. This application works like the application provided by fit bands. The more you burn calories and get fit, the more points you accumulate, which can be redeemed to avail discounts in premium.
Nicolaas Kruger, Group CEO of MMI told Cafemutual that they had received encouraging response in African countries in this model. He was hopeful of getting a good response from India too, given its favorable demographics and underpenetrated health insurance market.
Another unique factor was health cover for chronic lifestyle conditions which include asthma and diabetes. “We will look to expand the category as it will find relevance among a wider set of customers, including the young, health conscious and others with most common chronic lifestyle diseases,” said Mayank Bathwal, CEO, Aditya Birla Health Insurance.
Sharing his views on the new business, Ajay Srinivasan, Chief Executive - Financial Services, Aditya Birla Group said, “Health insurance has low penetration in India. According to an independent study, only 3% of Indian population has health insurance and most of them are underinsured. Thus, we sensed a huge opportunity in this space. We have come out with an innovative business model and I am very bullish on the growth prospects of our company.”
The company aims to break even in 5 to 6 years. Typically, health insurance companies take 8 years to break even.