New Delhi: Aditya Birla Health Insurance Company Ltd (ABHICL) is likely to break even in the next financial year as the company is growing at a “good rate”, a top company official said.
The Aditya Birla Group’s health insurance company commenced its operations in October 2016.
“We are focussed on break-even, we want to break even in the next financial year. We are growing at a good rate, and creating a good business. ABHICL grew close to 50 per cent last year and we want to maintain this kind of growth,” ABHICL Chief Executive Officer Mayank Bathwal told PTI in an interaction.
He said the company would like to grow at a similar rate of around 50 per cent in the current financial year as well.
The company’s gross written premium during April-June 2021 rose 50 per cent to Rs 368 crore. However, there was a loss of Rs 128 crore during the first quarter, due to COVID-19 claims of Rs 112 crore.
During the April-July period of the current financial year 2021-22, the company’s gross direct premium income grew about 43 per cent to Rs 493 crore.
At the end of the March 2021 quarter, ABHICL recorded a gross written premium (GWP) of Rs 1,301 crore and covered more than 13.4 million (1.34 crore) lives.
Bathwal said the insurer has seen good traction across categories as customers are now realising the importance of health insurance as the coronavirus pandemic has hit them hard.
“Good thing is that from the regulatory perspective, there have been a lot of enablers. However, there are challenges in terms of the initial impact of COVID-19 cases as the claims have been high,” he added.
The company’s unique and differentiated health-first business model, such as 100 per cent return of premium, is contributing to more than 50 per cent of retail health new business.
The insurance company’s products also incentivise policyholders for maintaining a good health record, Bathwal said.
He said the company’s Rs 1-crore policy cover that was launched a one-and-a-half year ago has also become a successful product.
The pandemic has come as an unexpected event, though it has helped in increasing the awareness level of consumers. They are realising why it is critical to have an insurance cover, said the official.
Now, people have started buying insurance at an early age. Besides, the value of the sum assured has also gone up. The sum assured amount has now gone up to Rs 5-10 lakh, which was in the range of Rs 3-4 lakh earlier, he said.
Also, people are finding that their corporate insurance cover may not be enough to cover for any eventuality, so they are looking for top-up and additional insurance coverage also, the official added.
On being asked about the company’s capital requirements, he said, “We are in a growth mode, we are still having our losses. But, as I said that we will be breaking even next year, so we will continue to seek some capital. But, we are at the fag end of that requirement.”
“So, our capital requirements will not be there after that,” he said without specifying any amount.
On growth opportunities, he said there is a lot of potential in tier-III and IV cities. It will also help create better healthcare facilities.
“If you have more health insurance in smaller towns, then automatically it will create more demand for healthcare facilities because the insurance product will fund it.
“So, it will automatically create the demand for healthcare facilities to open up there. So, in a way, more insurance helps the opportunity to create better healthcare facilities,” Bathwal added.
Now, the government is also providing incentives to set up more healthcare facilities in smaller towns and there are a lot of good things that are being heard from there, he said.