Seen 1,000-1,500 port-in requests a month in past 2 yrs: Antony Jacob

Q&A with CEO, Apollo Munich Health Insurance

According to Antony Jacob, CEO of Apollo Munich Health Insurance, lack of awareness about insurance continues and policyholders prefer simple indemnity plans over others for a cover of Rs 2-3 lakh. He believes this coverage is not sufficient for medication in tier-I cities. In conversation with Neha Pandey Deoras, he says increasing awareness will help boost growth but the industry should come together to achieve this end and should be supported by the government. Excerpts:

Both life and general insurance sectors have met the Finance Minister to discuss measures that can boost growth. Which measures, according to you, can boost the sector at this point?
Firstly, public awareness about health insurance needs to be increased beyond tier-I cities. Companies are doing their bit individually, but the industry needs to come together to campaign. And this needs the government's support.

Secondly, banks and non-banking finance companies (NBFCs) should be allowed to distribute multiple insurers' product. This has been allowed by way of a draft norms recently. But these norms need to be implemented. Lastly, tax benefits for paying premiums towards health insurance should continue even under the Direct Taxes Code. And this benefit should increase in tandem with the increase in medical costs. 

What are the trends in the health insurance space?
Rashtriya Swasthya Bima Yojana (RSBY), the health insurance scheme for poor, has been witnessing growth as more states are introducing the scheme. We're also seeing 20 per cent growth annually on the retail side.

Policyholders are seen to prefer hospitalisation / indemnity plans over others, typically for a sum assured of Rs 2-3 lakh. This amount may not be adequate for treatment taken in tier-I cities. Those preferring medication in tier-I cities should have a cover of Rs 7-10 lakh. Those in tier-III or IV cities would be better off with a cover of Rs 3 lakh. 

Given the fact that hospitalisation covers are preferred, how has the response been to your product Restore? Apart from you, Religare Health Insurance's Care also gives a recharge option. Aren't these complicated for policyholders?
Restore is a popular product due to the option to restore the entire sum assured in a policy year and also for the no-claim bonus multiplier benefit. With this product we are rewarding / helping those who have made claims and those who have not. And I don't think these products are difficult to understand.

Irda has blamed health insurers for hiking renewal premiums 'arbitrarily' and may come out with guidelines to that effect. What is your views on this?
According to the health insurance guidelines, companies can go back to the regulator every 12 months for price revision, explaining the reason for the same. As of date, we go to the regulator every 36 months for price revision. And we don't load premiums based on individual claim experience.

Most companies have a senior citizen plans. Do senior citizens actually buy these products?
Earlier, companies had restricted end age for policyholders. Some individuals owned health policies for a year and then went uninsured. Some others relied on group policies only. However, a senior citizen is a high risk customer and hence should pay a higher premium. We do see senior buying health plans if they can afford to. That said, the decision to buy would also depend on how they value the risk-reward matrix.

Why has portability not taken off?
We have seen a consistent 1,000-1,500 port-in requests every month over the last two years. So, I am no sure if it hasn't taken off. Mobile number portability saw a similar response and so will savings account portability when it happens. Portability is only an option given to policyholders. They will port-out only if they aren't happy and you won't see mass porting all of a sudden.

What are the new products on the anvil and what are your expansion plans?
We don't plan to launch any products till March 2013. We want to focus on increasing our retail presence by widening our agent network. Last year, this time we had 25,000 agents, which today stands at 30,000 and plans are there to increase it to 35,000 by March. This should see our top line grow to Rs 610 crore from Rs 475 crore last year.

Now that the FDI limit has increased, is your foreign partner also looking to hike its stake?
I do not want to answer this question now. This may be discussed at an appropriate time in the future.