Deutsche Krankenversicherung AG (DKV), a Munich Re group's health insurance firm, is entering the under-explored health insurance market through a joint venture with Apollo Hospitals Enterprise.
US-based United Health Group, too, is keen on India debut but prefers to wait till the foreign holding limit in the country is raised to 49 per cent from the current 26 per cent.
Apollo Hospitals informed the Bombay Stock Exchange that its board of directors authorised chairman Prathap C Reddy to sign a JV agreement with DKV on Wednesday. DKV is the leader in the European health insurance market.
UnitedHealth Group International, a division of UnitedHealth Group and the largest and most diverse healthcare services company in the US, intends to set up a standalone health insurance firm in India.
"Though it is not in the immediate future, the company will wait till the cap on foreign direct investment of 26 per cent is lifted. We are informally looking for partners. The minimum capital requirement of Rs 100 crore (Rs 1 billion) is too high, and if regulatory changes lower it to Rs 50 crore (Rs 500 million), it will be more sustainable.
An indication from Irda suggests that it may happen in 2007," said Roberto Leonardi, executive vice-president and CEO, Asia, UnitedHealthcare Group International, while speaking at the 10th insurance summit organised by the Confederation of Indian Industry.
UnitedHealth already has a presence in the country as a healthcare services provider to corporate clients. The India business, which employed 200 people, was growing at 30 per cent a year, he said.
UnitedHealth International has either full ownership or a joint venture arrangement with healthcare organisations in Hong Kong, Malaysia, India, the Philippines and Portugal.
Leonardi said, "The regulatory challenges in health are the costs involved in setting up a health insurance company. Health insurance is not regulated as a separate line of business. There needs to be clarity in minimum benefits, set standards in waiting period and exclusions of diseases for rational development of the market."
B D Banerjee, insurance ombudsman for Maharashtra and Goa, said, "Health insurance products offered by insurers lack versatility with certain exclusions and limits, pre-existing diseases are excluded from coverage. There is no major plan for preventive treatment and cost of insurance is prohibitive for the average middle class."
"The government should allow fiscal support through tax relief for health insurance policies. We feel health insurance should be underwritten by specialised health insurers as general insurers are cross-subsidising it," he added.
On the social challenges that restrict a fast growth for the health insurance segment, Leonardi said, "In Asia, there is lack of interest in protection insurance. Public perception is that insurers do not pay for the benefits that are covered. A foreign insurance firm sees a reputation risk for insurance products that do not cover the full spectrum of healthcare."