MANAGEMENT DISCUSSION AND ANALYSIS

Mr. Ashish Mehrotra

Managing Director & CEO

Ms. Anika Agarwal

CMO & Head - Digital and Direct Sales

Mr. Anurag Gupta

SVP & Head - Agency Channel

Mr. Aseem Gupta

SVP & Head - Portfolio Management & Affinity Channels

Mr. Atul Bhandari

SVP & Head - Bancassurance and Alliances

Mr. Partha Banerjee

Director & Head - Legal, Compliance & Regulatory Affairs

Ms. Priya Gilbile

SVP & Head - Health Risk Management

Mr. Rahul Ahuja

Chief Financial Officer

Mr. Tarun Katyal

Director & CHRO

Mr. Vikas Gujral

Chief Operating Officer

Max Bupa’s new product GoActive was recently recognised as ‘Health Insurance Product of the Year’ and ‘Best Product Innovation in Asia‘

Max Bupa’s new product GoActive was recently recognised as ‘Health Insurance Product of the Year’ and ‘Best Product Innovation in Asia‘

Max India Limited and UK-based health and care giant Bupa, came together in FY 2010 to form a promising and enterprising joint venture, Max Bupa Health Insurance Company Ltd. (MBHI), the third standalone specialist health insurer in India.

Max Bupa, a 51:49 venture, combines Max India’s local expertise in hospitals, clinical research, life and health insurance sectors with Bupa’s 70+ years of global and specialised experience in health and care spanning across 190 countries.

Today, Max Bupa is a leading player in its chosen segment and is among the most trusted health insurers in the country. A compelling customer-centric product proposition, combined with a strong market reputation and best-in-class technological solutions, makes Max Bupa the preferred health insurance partner to 2.8 million customers.

Max Bupa offers individual and family-oriented health insurance policies for Indians across all age groups. The organisation has a long-standing working relationship with a wide network of over 4,500 top quality hospitals and health care providers in the country.

Max Bupa offers quality health insurance services through a dedicated team of over 2,000 people, 12,000 agents and its network of 29 offices across 19 cities - Delhi, Mumbai, Hyderabad, Chennai, Bengaluru, Pune, Ludhiana, Chandigarh, Jaipur, Surat, Kochi, Kolkata, Patna, Goa, Gurugram, Lucknow, Vadodara, Thane and Jodhpur.

Over the last 8 years, Max Bupa has introduced many innovative offerings that cater to the evolving health needs of various customer segments.

The key differentiators of Max Bupa that set it apart from other players in the health insurance segment are:

1. An unmatched customer centric-product portfolio:

Max Bupa has carved a niche for itself in the health insurance sector through its innovative and comprehensive products that are designed keeping in mind benefits for young and old customers. Max Bupa’s portfolio consists of indemnity and fixed benefit plans.

  • Max Bupa’s market leading and comprehensive flagship product, Heartbeat, has a strong market penetration and sits as the most distinguished proposition in our product portfolio, with its host of ‘industry first’ features. Heartbeat focusses on customer-centric features like enrolment at any age and lifelong renewability, which later became a part of the regulatory framework. It offers coverage to individuals and extended joint families, maternity benefit and coverage for new born, lifelong coverage for day care procedures, a unique feature, international cashless coverage for treatment of critical illnesses, tapering copay benefit for senior citizens and much more

  • Over the years, Health Companion, a comprehensive plan with tiered pricing and a host of customer-centric features: no claim bonus, refill benefit and cover for alternative treatments like Ayurveda, Unani, Siddha & Homeopathy, has been one of the recommended health plans in the market. The product is popular and contributes significant volumes to the business

  • Health Assurance is a three-in-one benefit plan that offers coverage for 20 critical illnesses, personal accident up to ₹ 5 crore along with hospital cash benefit. It is one of the most flexible fixed benefit products in the market

2. Exemplary Service:

Max Bupa’s single biggest differentiator is its laser sharp focusses on service excellence and delivering a seamless experience at each customer touch point, be it at the point of sale, claim or renewal.

  • To fulfil its promise at the most critical juncture, that is, point of claim which is the real moment of truth for any insurer, Max Bupa introduced 30-minute cashless claims preauthorisation in India. This is one of the fastest cashless claim settlements by any insurer in the country

  • Max Bupa has successfully implemented a robust CRM solution that enables faster, seamless and real-time services to its customers, agents and partners.

Max Bupa, a 51:49 venture, combines Max India’s local expertise in hospitals, clinical research, life and health insurance sectors with Bupa’s 70+ years of global and specialised experience in health and care spanning across 190 countries.

  • Max Bupa is utilising latest technology and tools to enhance customer experience at each touch point. Max Bupa has self service apps for its agents and partners, namely InstaInsure and SARAL, to enable instant customer enrolment and policy issuance – creating customer delight at the point of sale

3. Thrust on innovation:

Max Bupa has built itself a rich legacy of many firsts - be it products, service promise, brand positioning or technology-led approach. The last fiscal witnessed a host of innovations by Max Bupa in the realm of point of distribution, claims and products.

  • Max Bupa launched GoActive, India’s first digitally-enabled ‘Everyday Use’ plan that has been designed to give customers 360-degree coverage for their daily health needs including inpatient hospitalisation and on-the-go access to OPD, diagnostics, personalised health coaching, second medical opinion, behavioural counselling and much more. Max Bupa has brought together the industry’s premier health-tech providers including GOQii, Practo and 1mg, on a single platform to create a digitally-enabled wellness ecosystem that will seamlessly offer all these services to its customers. The product was recently recognised as ‘Health Insurance Product of the Year’ and ‘Best Product Innovation in Asia‘ for its unique features that highlight a paradigm shift in how health insurance is purchased, perceived and utilised in India

  • Max Bupa introduced AnyTimeHealth, a completely automated, technology-based model with a simple interface that offers a comprehensive awareness-to-purchase journey, overcoming the procrastination hurdle experienced by many Indians. The customers can perform non-intrusive health assessment covering Body Mass Index, Blood Pressure, Body Type & Fat %, Muscle %, Bone Mass, Body Temperature, Hydration level and Blood Oxygen %; and buy a policy instantly within 180 seconds. The 5 simple step journey of Max Bupa ATH is as follows:

    • Registration using email ID and phone number

    • Non-intrusive health assessment

    • Automated health insurance policy recommendation based on details entered and test output

    • Instant payment

    • Instant policy issuance

  • In keeping with Max Bupa’s core tenet of achieving customer-centric profitable growth, the Max Bupa ‘Point of Care’ initiative was launched for our customers when they need us the most. The core value proposition behind this initiative was to create customer delight at the “Moment of truth”. ‘Point of Care’ (POC) desks at leading hospitals help Max Bupa customers navigate the otherwise complex and tiring hospitalisation procedures and protocols with ease. ‘Point of Care’ is a first of its kind initiative in India that aims at making the hospitalisation process smooth and seamless for policyholders. These POC desks have been established at leading hospitals in Delhi, Mumbai and Bengaluru in the first phase of the launch.

4. Market reputation and trust equity

  • Max Bupa is one of the most trusted and reputed brands in the industry. Its core proposition of keeping ‘customers first’ in all its decisions sets it apart from other insurers in the market.

  • It has emerged as the most trusted and well-known health insurance company in India, consecutively in multiple consumer surveys including the coveted Superbrands in FY 2016 and FY 2017 as well as the ‘Brand Trust Report’ in FY 2014, FY 2015, FY 2016 and FY 2017

  • Max Bupa’s flagship annual health initiative ‘Walk for Health’, started in FY 2012, has inspired millions to move towards a healthier lifestyle, over the last six years. It successfully established Max Bupa as one of the few brands that lives its purpose - of helping its people, customers and the community at large lead healthier, disease-free and successful lives

  • Max Bupa is among the most popular health insurance brands on social media with close to 5.5 lakh fans on Facebook and 23,000 on Twitter. The brand’s engaging and innovative content style has helped it become one of the most talked about brands on social media

Max Bupa’s core values – ‘CREATE’: Caring, Respectful, Ethical, Accountable, Trustworthy and Enabling are embedded in the organisation's DNA – they resonate in its overall philosophy, in each customer interaction and in the company’s R&R framework. This value system is instrumental in making Max Bupa one of the most dependable health insurers in India. A name which has a quick recall value. Each employee is trained on these values at the time of joining the company and is appraised on the basis of values that he/she demonstrates through the year; senior leaders take personal accountability for their actions and demonstrate a value driven culture.

An experienced and talented team of skilled leaders with rich expertise in the BFSI industry drive the strategic direction of the company. The management team at Max Bupa is focussed on providing its customers with innovative products and services that meet their evolving health needs. The team also reinvent existing models to bring healthcare closer to the patient.

They believe that a ‘people first’ culture and a performance-driven work environment is fundamental for employees and the organisation to grow, where enough opportunities are given to employees to learn and develop themselves within the organisation.

Mr. Ashish Mehrotra - MD & CEO Max Bupa taking a ‘Walkfie’ with Akshay Kumar

Mr. Ashish Mehrotra - MD & CEO Max Bupa taking a ‘Walkfie’ with Akshay Kumar

INDUSTRY OVERVIEW

Indian healthcare is experiencing a new wave of opportunity. In India, health insurance sector continues to experience high growth - it is the most rapidly growing segment in the BFSI sector with gross written premiums increasing by 22% from ₹ 34,588 crore in FY 2017 to ₹ 42,263 crore in FY 2018. Since only 27% of the Indian population has some form of health insurance coverage, the sector presents a huge opportunity of growth and thus continues to attract new players. Over the past few years, the rise in lifestyle, stress and chronic diseases like Cancer, Diabetes and Cardiovascular ailments is contributing towards the increased awareness about health insurance. According to industry experts, the health insurance market is expected to grow to ~₹ 51,500 crore of GWP by FY2020 and is likely to continue the same growth trajectory post 2020 for 3-5 years.

Max Bupa continues to cater to the B2C health insurance sector, growing at ~32% (5-year CAGR till FY 2018), ahead of industry’s B2C growth of 22% in terms of GWP. The Health Insurance industry continues to be dominated by 4 public sector companies, which together constitute 55% of the market share. In addition, there are 21 private general insurance players and 6 standalone health insurers. Four new private general insurance players have started operation in FY 2018. Edelweiss is the latest entrant which commenced operation in March 2018.

OPERATIONS – HIGHLIGHTS

Max Bupa further strengthened its foothold in the Health Insurance sector with a growing base of ~ 2.8 million customers across the country, serviced via its diverse distribution channels, including a network of 12,000+ agents, spread across the country, a telesales team covering 500 cities, along with deep partnerships with leading web aggregators like Policybazaar. The company also has strong enduring partnerships with leading Indian and International banks like - Bank of Baroda, Standard Chartered Bank, Federal Bank, RBL Bank, Deutsche Bank, Sarv UP Gramin Bank, Bajaj Finserv and Muthoot Finance, which provide it access to millions of customers in almost every nook and corner across the country.

MD & CEO Mr. Ashish Mehrotra at the launch of GoActive with Ms. Sania Mirza

MD & CEO Mr. Ashish Mehrotra at the launch of GoActive with Ms. Sania Mirza

With a workforce of over 2,000 people, Max Bupa has a pan India presence in 29 offices across 19 cities - Delhi, Gurugram, Mumbai, Hyderabad, Chennai, Bengaluru, Lucknow, Pune, Ludhiana, Chandigarh, Jaipur, Thane, Surat, Kochi, Kolkata, Patna, Goa and Jodhpur.

Max Bupa’s indemnity product offerings including its flagship product ‘Heartbeat’ and ‘Health Companion’ are favoured brands in the market and contribute to steady sales growth. With many industry first features, like international cashless, treatment for critical illnesses, coverage for 19 relationships in a single policy and tapering co-pay for senior citizens, Heartbeat now refreshed, continues to be one of the most comprehensive health insurance products in the market. The refreshed version of Health Assurance has been well received by all channel partners and customers. The product comes with attractive features:

  • higher sum insured options,

  • up to 3 years of tenure,

  • 150% of CritiCare amount in option 2, and

  • flexible combinations between the 3 different sub products – AccidentCare, CritiCare & HospiCash

Max Bupa further fortified its existing line of retail products to strengthen its customer value proposition with the launch of ‘GoActive’. ‘GoActive’ is a first of its kind digitally-enabled customer-centric offering in the industry that caters to the ‘daily health needs’ of Indians and has been designed with an intent to bring a paradigm shift in the health insurance industry. Unlike traditional health insurance plans that primarily provide coverage for only inpatient hospitalisation, ‘GoActive’ is designed as an ‘every day use’ product that provides on-the-go access to OPD, diagnostics, personalised health coaching, second medical opinion, behavioural counselling and much more. ‘GoActive’ is the outcome of powerful collaboration of the industry’s premier health-tech providers, including GOQii, Practo, and 1mg, to create a digitally-enabled wellness ecosystem that seamlessly integrates all these services on a single platform.

Max Bupa also launched a number of customised offerings (on GHI & GPA format) for its group customer segments. These include a 5-year group critical illness policy and a 2-year Group health secure cover; the first is a file & use product since the Health Regulations 2016 came into effect. The company will continue to innovate and expand its retail portfolio in FY 2018, to provide its customers with a wider and newer choice of products and services.

Max Bupa continues to offer fastest cashless claims settlement in the industry by fulfilling 94% cashless claims pre-authorisation requests within 30 minutes. Max Bupa has again taken a pioneering position by being the first Standalone health insurer (SAHI) to successfully launch ‘Point of Care’ model in India. The introduction of ‘Point of Care’ initiative has significantly improved customer experience at the moment of truth that is, the point of claim, a very touching moment for the customer. Max Bupa plans to expand POC desks in FY 2018 to more network providers to deliver a better personalised experience to its customers.

Max Bupa heavily invested in tech-enabled solutions to provide exemplary service and seamless processes to all its customers. A robust Customer Relationship Management (CRM) system, Agent self-service app, Instant policy issuance app, customer self-service app are some of the technologically-enabled services that are a part of Max Bupa’s service offerings. The company is investing in new-age technology like chatbots and artificial intelligence to further enhance and automate customer satisfaction.


Building consistent brand equity

Complementing the disruptive product – ‘GoActive’, which is a simple unified plan that covers majority of health needs on-the-go including OPD, Personal Health Coaching, Health Checks, Hospitalisation and much more – Max Bupa launched a new brand campaign that attempts to redefine how health insurance brands typically interact and engage with their customers.

The new TVC gives both – traditional health insurance policies, and GoActive – a human avatar to demonstrate their engagement and contribution to our daily lives. Max Bupa’s new campaign aims to target young Indians into the health insurance fold – a change that is one of the most effective ways to drive the country’s health insurance penetration. The campaign leverages humour to connect with today’s evolving, younger audiences. It also sets a new benchmark with respect to the disruptive treatment of the commercial and its tonality.

Max Bupa organised the sixth edition of its flagship health initiative, ‘Walk for health’, as a tri-city (Mumbai, Delhi and Bengaluru) walkathon in February 2018. ‘Walk for health’ is a reflection of Max Bupa’s commitment to help India put ‘Health First ‘on its agenda, and brings to light its purpose of helping its customers and the public at large lead physically fit, and healthy lives. The sixth edition of the ‘Walk for health’ initiative saw the introduction of internationally acclaimed concept of ‘Power Walk’ in India. Through this idea, the company endeavours to evangelise walking as a serious sport in India. Over 28,000 Indians participated in the sixth season of the Walk and 5,000 of them participated in the first ‘Power Walk’ competition in India hosted by Max Bupa.

Outstanding Campaign Results:

  1. Social Media Success - People participated and shared their experiences widely on social media. Celebrities tweeted about it and the netizens followed conversations rigorously. Interaction popularised in 20,200+ posts and 220 million impressions. 16 million people were covered through social media. Trended 5 times on Twitter.

  2. Partnership with The Times of India - The project was widely publicised by the Times Group with 400-plus advertisements and editorial coverage in The Times Group publications. High decibel campaign of 4 weeks reaching to about 12 million people, with more than 2 hours of editorial coverage on Times Now along with the live coverage of the event.

  3. Buzz through PR - The movement became a talking point across multiple platforms with more than 500 news articles in print and online media and 100 minutes of unpaid airtime through electronic media across the country.


Max Bupa’s key performance indicators for the year (FY 2018) are as follows:

  1. Gross Written Premium (GWP) increased 27% to ₹ 755 crore in FY 2018 from ₹ 594 crore in FY 2017.

  2. Client network increased to more than 4,500, spanning over ~500 cities in India.

  3. 5th largest B2C player amongst private insurers with an estimated market share of 4% in the private segment (as on March 2018).

  4. Leading Awards and Accolades:

    • Recognised as the Most Innovative Health Insurer by BusinessWorld magazine

    • Recognised as a Super brand in 2017 - Super brands is one of the biggest consumer awards in the country and is a respected name

    • Emerged as the Most Trusted Health Insurance Brand in the Brand Trust Report 2017. This is the fourth consecutive year of Max Bupa being recognised as the most trusted Health Insurance brand by the Brand Trust Report published by TRA, through an independent consumer research across 16 cities in India

Strategy – Staying Ahead

Max Bupa strives to achieve “Customer-centric profitable growth” in the long term; cement the trust equity of its customers and employees; deliver value to all its stakeholders and be at the forefront of innovation, customer service and digitisation in the health insurance industry.

Max Bupa will relentlessly pursue to retain its focus on the retail segment. The company is building a comprehensive suite of product offerings to become a “provider of choice” for all customer segments. The impetus is on developing simple and customer-centric products which can be distributed effectively through multiple partners. Max Bupa has identified customer service as a key differentiator – automation of its processes and building powerful partnerships to create a health ecosystem will become the key driver to excellent customer service. Max Bupa is strengthening its direct tie-up with over 4,500 hospitals across 500 cities. Max Bupa is also developing partnerships with health-tech and insurtech companies.

In order to deliver value to all stakeholders, Max Bupa continues to focus on profitable urban & value-adding segments. However, to build regional relevance it is increasing expansion to new geographies.

Felicitation of awardees at the Project of the Year Awards 2018

Health Risk Management (HRM) is one of the key strategic priorities for Max Bupa. HRM plays a major role in ensuring that risk principles regulate the design and development of products, sales process, underwriting and policy servicing processes.

To improve its customer reach, Max Bupa is strengthening its direct tie-up with over 4,500 hospitals across 500 cities. MBHI supports its customers through its in-house team of dedicated professionals including doctors.

The company is constantly enhancing its digital capability to improve experiences through digital processes, platforms and tools. Max Bupa is investing in developing a digitally-enabled ecosystem, superior analytics and digitally-enabled underwriting and claims to further improve its operational efficiencies.

People Development is an important commitment for the organisation. Max Bupa looks forward to invest in the development of its 2,000 employees through its “people first” agenda including the deployment of a formal talent assessment, management and development framework.

Regulatory Environment

From a regulatory perspective, the year also witnessed refurbishing of the existing insurance regulatory framework with new regulations being introduced and amendment of existing guidelines.

  • Regulator issued guidelines on insurance e-commerce regulating the set-up of ISNP by Insurers and intermediaries (other than insurance agents) to sell and service insurance policies. The manner and procedures for grant of permission to establish an ISNP for undertaking insurance e-commerce activities in India has now been prescribed

  • IRDAI recognised that Insurers have customer sensitive information. The regulator held Insurer responsible for ensuring that adequate mechanisms are put in place to prevent leakage of personal and confidential policyholder information and ensure that information is shared only on a ‘need to know’ basis. Whereas, in lines with the Supreme Court order, linkage of PAN and Aadhaar is still on hold. Several Insurers have installed requisite infrastructure and registered as KUA/AUA with UIDAI for storing the Aadhaar numbers

  • New Web aggregator regulation brought about a requirement for increased minimum capital for web aggregators and clarity on various ambiguities that existed in the erstwhile framework; thereby bringing in greater participation of web aggregators in the overall sale of insurance products in India

  • Protection of policyholder interest is one of the primary objectives of the regulator. This has ensured that the interests of policyholders are protected, while laying emphasis on grievance redressal; it established a robust policyholder-centric governance framework for the Insurer along with distribution channels, surveyors and other regulated entities

  • IRDAI Circular on Obligatory Cession: Applicable to Indian Reinsurers and other applicable insurers as per the provision of Section 101A of Insurance Act, 1938. Circular has prescribed that no sum insured limit shall be applicable for the cessions made during the period of 1st October 2017 to 31st March 2018. The Indian Reinsurer(s) may require the ceding insurer to give immediate notice of underwriting information of any cession exceeding an amount specified by the former. The ceding insurer shall inform the Indian Reinsurer(s) at all times whenever the cession exceeds such specified limits

  • Transfer of Unclaimed Amount to Senior Citizens’ Welfare Fund – Accounting Procedure: All insurers will be required to adhere to the accounting procedure for transfer of funds into the SCWF issued by Department of Economic Affairs. All insurers having unclaimed amounts of policyholders for a period of more than 10 years as on 30th September, 2017 were required to transfer the same to Senior Citizens’ Welfare Fund on or before 1st March, 2018. The process laid down in the SCFW Rules, 2016 specifies that the accounting procedure for transfer of funds to the Senior Citizens’ Welfare Fund is required to be followed every financial year and the insurers are required to make transfers to the consolidated fund of India on or before March 1 of every year

  • “Insurance Regulatory and Development Authority of India (Insurance Brokers) Regulations, 2018”: Key terms are defined such as Broker Qualified Person, Composite Broker, Scheme of Transfer of Business, Transferor. One certificate of registration will be granted to one entity in a group.

Outlook and Risks

The Indian healthcare sector is diversifying and opportunities are abundant in every segment. The health insurance sector continues to remain a fundamentally attractive industry with growth projections of ~15% over the next 3-5 years and the industry is expected to double from the current levels of ~ ₹ 42,263 crore. The industry is gradually shifting towards the B2C segment as witnessed over the last few years and is expected to continue this trend – B2C segment is the fastest growing segment with a CAGR of 22% over the last 5 years. Max Bupa, now the 5th largest B2C player in the private insurance industry, plans to continue building on its expertise in the retail segment and add more families through its novel product and service proposition. With established processes, a stable and energetic sales team and growing reputation, Max Bupa with its customer-centric orientation will continue to capitalise on its market differentiation, explore new healthcare models and build long-term customer relationships.