Birla Group seeks partner for health insurance foray
07 Mar, 2014 01:01 PM
The AV Birla group has hired Boston Consulting Group to find a partner to foray into the country's fast-growing health insurance sector. The Indian conglomerate, led by billionaire Kumarmangalam Birla, is expected to hold 74% stake in the proposed venture, persons familiar with the matter told ET.

The group is in talks with a South African health insurance company, they added. "Within general insurance, Birla feels health has got good potential to grow," one of the persons said.

The AV Birla group did not respond to ET's email query on the development. Mumbai-headquartered AV Birla group is already present in the life insurance segment through a joint venture with Canada's Sun Life.

Birla Sun Life sells a range of life insurance products, including unit-linked and traditional products. Some large global health insurers like South Africa's Discovery and US-based Aetna have been scouting for a local partner to enter India's health insurance market, which is estimated to grow 25% in the next five years. As per the insurance sector norms, a foreign partner can hold a maximum of 26% in an Indian joint venture.

The Rs 12,606-crore domestic health insurance business accounts for about a quarter of the total non-life insurance business in the country. The latest entrant into this segment is Cigna TTK, a joint venture between US-based Cigna and India's TTK Group, which started operations this month. Apollo Munich, Max Bupa, Star Health & Allied Insurance and Religare are the other players.

All standalone health insurance companies focus mainly on the urban market, which is seeing a growth in hospitals, clinics and doctors. The AV Birla group has also applied for a banking licence. The persons quoted earlier said that if it gets a banking permit, it may find it difficult to start another financial services venture.
Source : The Economic Times

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