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The Indian medical insurance market is rife with possibilities, especially due to increased awareness regarding the need for a sturdy cover. According to Business Today findings health care inflation in the country is growing alarmingly at 15% annually. Naturally, people are quite concerned and look for the most useful and patient friendly insurance plans. With effective health insurance requirements, gaining momentum, more and more, new players are making their appearance in this industry rife with possibilities.
So, it's no wonder that Aditya Birla Group, the well known multinational conglomerate based in Mumbai, India has also decided to take the plunge through its Finances Segment. Recently, they have signed Memorandum of Understanding (MoU) with MMI Holdings Ltd., South Africa to make their entry into the health insurance sector official. In this joint venture, MMI initially will have a 26% stake. Aditya Birla Financial Services Group (ABFSG) today has a strong presence across different verticals as Life Insurance, NBFC, Asset Management, Broking, and Distribution. They also deal with Wealth Management, Private Equity, and Advisory General Insurance Services.
The Chief Executive Financial Services, Aditya Birla, Mr. Ajay Srinivasan feel that while, awareness regarding health insurance requirements may be increasing its penetration is still low. He feels that their partnership with MMI Holdings will give provide them a competitive edge in the health insurance market since the company has a high proficiency in this particular segment. This may be the first venture of Aditya Birla Group in the health sector the company is not new to the insurance segment in India.
They already have an insurance product in place, Birla Sun Life Insurance (BSLI). This again was a joint venture with Sun Life Incorporation, based in Canada, and considered among the most prominent international financial companies. MMI Holdings are also quite happy with this partnership and are hopeful about the future. Group CEO, Nicholas Kruger feels that India is an important strategic market for health insurance products, and hence the plunge. In the coming times, they are hopeful to develop a significant business presence in the country.
It seems that Aditya Birla Finances have chosen their partner well, especially given the reputation of MMI Holdings. They are the leading financial insurance-based services listed on the stock exchange in South Africa. The company came into existence in the year 2010 through merger of Momentum Group and Metropolitan Holdings. Today, MMI Holdings Ltd has turned into one among the biggest insurance providers in the country with their business spread over 12 other African nations as well as United Kingdom.
ABFSG has gone for this formal venture with MMI with latter holding 26% stake, which is the upper limit as per current FDI regulations. In future, if the environment related to Indian Insurance segment becomes amenable, MMI will be able to increase their stakes to 49%. The Group for now wants to focus on their retail presence and want to build it up across different products. They feel that there is a huge inherent potential waiting to be tapped in India.