Taking the plunge into India, US health insurer Cigna has joined forces with Indian consumer products conglomerate TTK to establish a new health insurance company. Cigna will have a 26% stake and TTK a 74% stake in the company, to be named Cigna TTK.
TTK’s attraction as a partner lies in its involvement in India’s consumer sector and its extensive distribution network. Among TTK’s interest are the manufacturing and marketing of pharmaceuticals, fast moving consumer goods, bio-medical devices and food products.
Cigna and TTK are eyeing 2013 to launch Cigna TTK which has still to be licensed by India’s Insurance Regulatory and Development Authority. Cigna TTK is to be headed by Sandeep Patel who joined Cigna in 1998. Patel has served in several leadership roles including the expansion and management of Cigna’s business in the Middle East region.
Cigna TTK will become India’s fourth stand-alone health insurer, joining Star Health & Allied Insurance, Apollo Munich Health Insurance and Max Bupa. Health insurance is also offered by life insurers, general insurers.
In the six months to September 2011, the IRDA reported that the three health insurers and general insurers had written total premiums of INR672bn ($13.4bn), up 21.3% compared with the same period in 2010. The IRDA does not disclose life insurers’ health insurance premium income.
According to consultancy Towers Watson, India’s health insurance market continues to be dominated by the four state-owned general insurers, or so-called public sector undertakings (PSU). The four PSUs, notes the consultancy, have a combined market share of about 60%. Among private players, the top position in the six months to September 2011 was held by ICICI Lombard with a market share of 11.4%. The second largest private player was Star Health & Allied Insurance with market share of 8.9%.
Towers Watson notes that Indian life insurers are stepping up their efforts in the health insurance sector. Specifically, notes the consultancy, declining sales of unit-linked insurance products and pension products are forcing life insurance companies to sell their cover along with health insurance policies.
“Life insurers aim to tap their existing vast distribution network to offer health insurance along with life insurance [and] a few such products have already hit the market,” states Towers Watson.