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If we insist on pre-sale medical check-ups, sales force will push back: Mayank Bathwal

LiveMint logoLiveMint 09-04-2017 Deepti Bhaskaran

Aditya Birla Health Insurance Co Ltd, a joint venture between Aditya Birla Group and South Africa’s MMI Holding Ltd, a financial services group, launched in November last year. In January they launched their flagship health insurance product Active Health. Mayank Bathwal, chief executive officer, Aditya Birla Health Insurance Co Ltd, in an interview with Mint, explains the focus on healthy living through their health insurance offering. Edited excerpts:

You being the latest entrant, how is your product not a ‘me too’ in the health insurance market? 

Currently the focus of health insurance is limited largely to covering hospitalization expenses. So a large part of customer segment like the very young and healthy, don’t feel the need for health insurance as they don’t consider hospitalization a serious probability. Even the sale process focusses on the fear factor. We felt there was an opportunity to expand the thought process and bring in the concept of healthy living in addition to insurance. In fact we realized that more people were interested in the conversation. This is why many health insurers have now started focusing on wellness. And we have support from our joint-venture partner, which has done a good job with engaging customers for healthy living through health insurance. 

About the core of health insurance plans—paying for hospitalization; some products put sub-limits and co-pay clauses. What’s your stand?

In our starting variant ‘Essential’, we have co-pays and sub limits. The maximum sum insured in this variant is Rs10 lakh. But customer has the option to buy out the restrictions by paying extra. The ‘Enhance’ version has no such limits, and the pre-existing waiting period is three years instead of four. The sum insured in this version can go up to Rs2 crore. On top of this, we have a reward system for healthy behaviour, in the form of cashbacks. In this, we give up to 30% of the premium back every year for healthy behaviour. 

This money gets credited into the health account of a person and can be used for health-related expenses. So it can be used for OPD (out- patient department) benefits or to pay for incidentals during hospitalization, which are not covered by your policy. One can also use this money at the end of the year to pay for renewal premiums. 

How does this reward system work?

The reward system is offered to individuals who take a medical test 90 days after buying the policy with us. In case they have not gone through a pre-policy medical check-up, we pay for these tests. These are five checks that can be done in a matter of minutes: blood pressure, cholesterol, blood sugar, body mass index (BMI) and the smoking status. Depending on the data we receive, the customers are classified into red, amber and green categories. 

Then, depending on their activity levels, every month we credit a percentage of the premium into their health account. For example, if a policyholder is active for 13 days or more in a month, and she falls in the green category, the customer is entitled to 2.5% of the premium (30% in a year) in her health returns account. 

Why a medical check-up after a policy is bought? Most insurers insist on it before policy issuance. 

We do have medical check-ups for applicants if they are above a certain age or buy a policy above certain sum insured. Ideally, we want a medical check-up for every applicant but unfortunately this category has evolved in a way that if we insist on a medical check-up before sale for everyone, there will be massive pushback from our distribution sales force. Customers ideally don’t want medical tests. But after buying the policy, we are rewarding customers to undergo a free health assessment. This way, we can find out their health status. 

Your reward system works on tracking the activity levels of your customers. But how will you track that?

If you download our app and link it to the device or a wearable, it will start recording different activity levels like the number of steps walked. We have also set up network of gyms in more than 50 cities. The gyms have a beacon. So if you walk into one of those gyms and do a ‘gym check-in’, it connects through Bluetooth and records your gym activity. 

And where activity can’t be tracked, like swimming and yoga, we have something called a fitness check-up once in 6 months. This determines the activity level that is applicable for the next 6 months and the reward is credited every month for the next 6 months accordingly. 

Does this account have an expiry date? What if a claim is made on the insurance policy, will the rewards stop accruing? 

No. However, if one decides to port out of the health insurance policy, then the person has 12 months even after porting out to make use of the money. Coming to claims, this account has nothing to do with claims. And even after a claim, a person will continue to get the benefit of health return, based on the health level.

Your chronic versions covers people with pre-existing ailments. Does this mean even the most severe cases can buy a policy from you?

We are not saying that all customers with pre-existing ailment will get insurance. But we hope to cover more people who would normally be denied a policy, or have a long waiting period. 

We have identified four lifestyle ailments in India: asthma, blood pressure, high cholesterol and diabetes. So if a person gets any of these conditions in the future, after taking the medical assessment in the first 90 days of buying the policy, then they become entitled to OPD benefits for that particular ailment at no extra cost. OPD benefits are defined and capped. The idea is to engage the customers to improve their health, so our claims will come down and we will know whether they are complying or not. This benefit is available in our regular version. If the person doesn’t take the health assessment within 90 days, then the OPD benefits kick in only after a waiting period of 3 years. 

In the chronic version, say you are already a diabetic and are buying this policy, the OPD benefit kicks in from day one and there is no waiting period on pre-existing ailments because of these four conditions. Of course, the premium is about 2.5 to 3 times higher. 

Have you sold policies to customers with pre-existing ailments? 

We started selling from January and have seen some good business coming from chronic products. Most of these have for diabetes. Yes, there is a possible risk attached, so we are also discovering what will happen. But the fact that there is a segment that is seeking this product and is ready to pay for it means that there is a requirement as well. We don’t just want to be a funder. We feel insurers have a role to play in influencing the health outcome. Many diabetic patients may also develop a problem in their retina, but many do not visit an eye doctor. In our OPD benefit, we cover ophthalmologist consultations, because if you don’t detect this early you will end up doing an eye procedure that can cost up to Rs1 lakh. Here, under the OPD benefit, I am paying for your doctor visit hoping that it’s treated early. So this is how the whole economics of the business works. We are making some investments but  over a period of time, and we hope our claims ratio will start coming down if we do our job right.

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