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Cigna Corp in association with Manipal Group, South Indian multinational, announced its entrance in the health insurance sector of India.
The chief executive officer of the joint venture, ManipalCigna Health Insurance Co. , Sandeep Patel said that they are to start with six branches in India and both the groups have invested $22million in this project.
As per the telephonic interview of Jason Sadler, global head of individual insurance business at Cigna, with The Wall Street Journal, he believes India is important market for them.
As per the stats available from World Health Organization, health care receives only 3.9% of the gross domestic product though India. The insurance covers only 14% of total private expenses on health. Till date various foreign companies have entered this sector via joint ventures but have not seen much profit, majorly because of the new regulations. For the expansion process the capital required by the ventures is not sufficient as they are not receiving it from Indian partners nor they can borrow from foreigners. New York Life Insurance and Dutch insurer ING Groep NV sold their stake because of the same reason.
Health insurance has so much space to grow as people in India live in large families relying on each other for care and they are generally unsure if the insurer will pay for the medical expenses. Cigna in this segment believes that educating people regarding the importance of health insurance and focusing the cities with high ration of lifestyle diseases can make them sustain in the market.