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The Indian Conglomerate, AV birla group led by the billionaire Kumarmangalam Birla, is ready and scouting for a partner to enter the higly lucrative Indian Health Insurance market
Mar 7, 2014, Mumbai: The Boston Consulting Group was hired to find and suggest a partner to the AV birla Group for entering the rapidly growing health insurance sector in the country. The AV birla group led by the billionaire Kumarmangalam birla, shall hold 74% stake in this partnership if expectations were to be believed. Sources close to the group divulged that the group is in talks with a South African health insurance company, and the group feels that within general insurance, health insurance has a high potential to grow.
Birla sun life (a Joint venture between, AV birla group and the Canadian insurance company “Sun”), is well known for their life insurance products (including Unit linked plans and Traditional plans). South Africa’s Discovery and US-based Aetna have been trying to spot a local partner to foray into the health insurance market of India, which, as estimates tell would grow 25% in the coming 5 years. According to the FDI rules in the insurance sector, a foreign player can hold a maximum of 26% in an Indian joint venture.
About a quarter of the aggregate non-life insurance business in the country is accounted for by Domestic Health insurance, which amounts to Rs 12,606-crore in numbers. Some of the new entrants in the market are Apollo Munich, Max Bupa, Star Health & Allied Insurance and Religare and ManipalCigna, a joint venture between US-based Cigna and India's TTK Group, which started operations this month, is the latest entrant.
The main focus area of all the standalone health insurance companies is the urban market, riding the growth wave as far as hospitals, clinics and Doctors are concerned. Sources added that the AV birla group has also filed an application for a banking license and if the banking permit is given to the Indian conglomerate then it could be difficult for the group to foray into another financial services venture.