Channel Sales: Different types of channel, working , Mindset behind the type of channel Selected, How it fuels and affect the growth of the company.

Submitted By:

Bhuvan Gupta

PGDM

Batch: 2011-13

Enrollment no: 030301057

IntroductionThe growing affluence of the Indian middle-class

accompanied with lifestyle-related diseases and inflationary healthcare costs are driving the demand for health insurance in India today.

Launch of new hospital chains with a stress on holistic well-being is further accentuating this demand, especially in urban areas. 

Contd..Meanwhile the government, in collaboration with non-

governmental organisations and insurers, is launching various schemes to provide low-cost health insurance facility to all citizens.

The Report of Health and Family Welfare Government of India, New Delhi projects that more than 630 million persons, or about half of the country’s population, can be covered with health insurance by 2015.

By this time, spending through health insurance is also likely to reach 8.4 percent of total health spending, up from 6.4 percent in 2011–12.

Why Health Insurance? According to WHO Survey 99 % family will get a financial crunch

if any serious health problem will deducted. LIFE is uncertain. Medical insurance is more than just safeguard of your health - it

also prevents you from extra expenses Peace of Mind: Should illness strike, you can have the peace of

mind that you and your family can have access to Private Care Choice: You can choose the hospital that best suits you from the

appropriate Hospital listing High Quality Care: You are assured High Quality Nursing care Convenience: You can plan an operation to suit your particular

timetable.  

Contd..

Bills from medical institutions even for situations not threatening your life can lead to the fail of your finances.

Excellent Facilities: High quality facilities are made available to

you. 

Quality advice: You can rest assured that you will receive quality

advice from a consultant.

Tax Benefit under Section 80D.

Role of IRDAAs India contemplates a significant increase in public

spending on health care, The World Bank releases its first comprehensive review of India's major government sponsored health insurance schemes.

IRDA supported standalone health insurance companies by allowing the companies by taking help of advisors who all working for life / non life insurance.

IRDA realized the importance of service quality in health insurance.

Components of Health Insurance- India

RegulatorTPA

IntermediaryBrokers / Agent

St. Everywhere

Insurance Co.Employer / Government

Individual Consumers

Provider of care

Apollo Munich Health Insurance- Introduction Quality healthcare and Apollo have become synonymous in the

Indian subcontinent, a fact reiterated by global healthcare experts and international accreditation bodies. Committed to bring world class health care within the reach of every individual, Apollo Hospitals Group has joined hands with Munich Health, a world leader in the field of health insurance.

Apollo Munich Health is a joint venture between Asia’s largest integrated healthcare provider, The Apollo Hospitals Group, and Germany based Munich Re’s newest business segment, Munich Health. The joint venture is poised to make good the conviction of both the partners that Indian health insurance market is on the brink of explosive growth

The company was incorporated in August. 2007. It is a specialized health insurance company in India that has expertise in both health and insurance and is able to leverage this understanding for the benefit of its customers.

“Munich Health is in fact the new brand under which Munich Re is now offering its healthcare-sector services to clients and partners throughout the world. Munich Re is thus bringing together under one banner its global insurance and reinsurance know-how in health”.

Synergies between three fields of business: Health reinsurance and services: We draw on the decades of

experience and strong, international market standing of Munich Re in health reinsurance sector.

Primary health insurance: We provide primary insurance via Munich Re companies around the world.

Risk management and services: We operate MedNet offices in numerous countries to provide local insurance clients with managed care services appropriate for the markets

Company’s Vision, Mission, ValuesVisionTo be a trusted leader in the health insurance sector

by providing innovative solutions to the citizens of India.

Mission “Our mission is to bring Healthcare of International

Standards within the reach of every individual. We are committed to the achievement and maintenance of excellence in education, research and healthcare for the benefit of humanity.”

e

Contd..

Why Apollo Munich? Video

Brand Ambassador: Sourav Ganguly

Product Portfolio

As a first step towards bringing in innovative insurance solutions, Apollo Munich has launched its first generation products such as:

Easy Health Individual and Family Health Plans (In-Patient Hospitalization Covers)

Overseas Travel & Health Covers – individual, family and groups Personal Accident Cover – Corporate and Individual Optima Restore- Awarded with Innovation of the year award Maxima – India’s first truly comprehensive health insurance plan Optima Cash – A daily hospital cash product with maximum benefits. Optima Plus – A unique top-Up plan for Individuals Optima Senior- Exclusively for Seniors

Apollo Munich promises to constantly engage itself in developing innovative health and travel insurance solutions catering to various insurance needs that may exist in the market.

Market Penetration Apollo Munich is headquartered out of Gurgaon and has 39

operational offices apart from the corporate office covering major metros and category - A, cities/towns.

Hospital Network: The products of Apollo Munich are valid in all the hospitals across the country on a reimbursement basis. In around 4000 trusted hospitals across 831 cities & towns including the 53 Apollo Group hospitals the customers can avail “Cashless Hospitalization” service.

Expected Growth: The Health Insurance market has been growing at a CAGR of over 35% for the last three years. In the last financial year the industry has registered a growth of over 30%.

Apollo Munich envisages being a significant player in the Health Insurance Segment and being at the forefront and regularly introducing innovative health insurance products of global standards in India.

Competitive Advantages

It is a unique Health Insurance company as it is backed by India’s

largest integrated healthcare group, The Apollo Hospitals Group, in

partnership with Munich Health, world leaders in Health Insurance. The joint venture brings together the complementary strengths of its

partners. The Apollo Hospitals group’s extensive understanding of the

healthcare domain & strong brand equity as a healthcare brand, in

India, combined with Munich Health’s technical expertise provides a

sound foundation for Apollo Munich. The Apollo Hospitals Group has been a pioneer in corporate healthcare

and has significant understanding of this space which includes disease

patterns and incidence, in-depth knowledge of prevention & wellness,

provider profiles and behavior, besides strong customer understanding

and leads generation skills.

Contd.. The Apollo Hospitals Group’s extensive healthcare infrastructure

comprising of large tertiary care hospitals, primary care clinics, the

largest retail pharmacy chain and rural reach through telemedicine

provides significant strength to Apollo Munich’s distribution

capabilities.

Munich Health’s extensive global reach and Apollo Munich’s ability

to leverage the same offers it a unique opportunity to offer globally

valid covers backed by superior service to the growing population of

Indian overseas travelers.

Munich Health is a pure Health Insurer with an extensive Health

Insurance expertise of 80 years of profound understanding of

scientific underwriting, product pricing, design of innovative products

backed by world class actuarial practices and technological support.

Apollo Munich’s Theme Video

Channel SalesTypes of Channels employed- Agency Channel: Working-The focus of this Channel is on Retail sales. In this mode of Channel, As

per IRDA mandate Agents or Advisors from Life, General or those having Composite License can work or attach with Standalone Health Insurance Companies for example Apollo Munich Health Insurance, Max Bupa etc.

On the basis of such Pre-requisites their Advisor Code is generated. After which they can start working with the company.

The role of the Managers is to push these Advisors for the business and help them along if they face any ambiguity. Therefore their role is to mainly provide Service. The Advisors use to Undergo a proper training programme to get acquaint with the product knowledge and objection handling aspect to pitch effectively to the customers.

This type of Business Model focuses on following Aspects:

• Relationship Building

• Respect

• Commissions or Payouts

Contd.. Mindset behind the Channel Selected- As the Advisors who are getting

associated with the company mostly have rich Experience of the Insurance sector as a whole. They generally use to have a existing Client base or reputation in the market. By associating with a health Insurance Company they can enhance their Portfolio of Offerings to the Customer. Further the pay-out structure is of great appeal to them.

As Per IRDA mandate the Advisors will get 15% payouts on the business generated by them on fresh business as well as on Renewals. Apart from this Company regularly doles out lucrative Contests to motivate them to achieve better results leading to accomplishing of the targets for a said Quarter or for the year as a whole. Example would be Singapore Calling Contest for JFM(January-February-March).

Share in Business growth- This Channel accounts to around 50% of the total business generated for the Organization and among the highest of all the channels.

Corporate Channel

It is based on following approaches: Need based-An Organization reaches to the company on its own. Direct Approach- Corporate Organizations are being approached, given

presentations to make them aware about the need. Reference based- Reference given by the Agents or Brokers (Note-

Commission of 15% will be passed on to them if deal gets materialized). This Channel Exclusively deals only in Corporate Insurance that is large

Organizations in need of corporate group insurance for their respective employees. This channel is handled completely by the Company’s employees. They have the Sole responsibility to generate leads and bring Business from the corporate fraternity.

It works on the procedures of Quotations and requirements by the Corporate Clients. It generally takes time to get the deals materialized.

Minimum Requirement for the Corporate Insurance is of 50 employees.

Contd.. Payouts- Payouts are same that is 15% as mentioned above on the fresh

business done as well as on Renewals. Mindset behind the Channel Selected-As it requires Experience, maturity

and business acumen and a great deal of negotiations on its part to generate business from such source, company separate its retail operations from the said channel selected.

Share in Business growth- This Channel accounts to around 30% of the

total business generated for the Organization.

Partnership Channel:

This Channel is also known as Broker Channel. It exclusively deals with Financial Institutions having large presence across the cities. SMC, Karvy, NJ etc are attached with the company. This mode of channel has tremendous potential due to sheer volume of the customer base these brokers encompass leading to better revenue generation prospects for the organization.

Mindset behind the Channel Selected- As the Brokers have rich Experience of the Insurance sector and Financial services sector as a whole. They generally use to have a large and loyal Client base or high reputation in the market. By associating with a health Insurance Company they can enhance their Portfolio of Offerings to the Customer. Further the pay-out structure is of great appeal to them.

Payouts- Payouts are same that is 15% as mentioned above on the fresh business done as well as on Renewals.

Share in Business growth- This Channel accounts to around 15% of the total business generated for the Organization.

D2C (Direct to Customer)-

This type of Channel Include COI’s(Centre of Influence). COI’s- These are the ones who are in regular direct contact with

prospective customers. These might be Doctors, Pharmacist’s, Diagnostic centre operators, Receptionist’s that is anyone who is directly or indirectly associated with Healthcare Industry.

The COI’s use to generate only Leads which are further converted by the employees of D2C Channel in contrast to Agency mode of channel where Advisors are obligated to take care of the whole process that is from generating leads to conversion as a customer for the company.

Next there is a Tele-calling Set up in HO (Gurgaon). Any Enquiry for a policy there is further passed on as a lead to the D2C Channel employees only on the basis of their geographical locations.

One of the most important Aspect of this type of channel is providing SERVICE as that is taken care by the employees of D2C themselves as there are no Agents or Advisors attached to it.

Contd.. Payouts-As Per IRDA mandate the COI’S will get 15% payouts on the

final leads Converted by them. They will not get any commissions on the Renewals.

Mindset behind the Channel Selected- As COI’s are in constant touch with prospective Customers, Company

found it compelling to start this type of channel. The leads given by these are quite Genuine in nature due to the circumstantial conditions. This is a relatively new channel as compared to others. This Channel finds its presence in few major Cities (Ahmedabad, Jaipur, Delhi, Mumbai, Kolkata and Bangalore). Apollo Hospitals and Apollo Pharmacies plays a major role in this mode of channel as the requisite infrastructure required is readily available.

This channel requires a special mention here as Apollo Munich Health Insurance is the First Company to successfully implement this type of Business Model.

Share in Business growth- This Channel accounts to around 5% of the total business generated for the Organization.

SWOT Analysis Strengths• No Claim based loading• No geography based Sub-limits• 100% Lifelong Renewal.• Clear Policy Wordings and Conditions.• Cashless Access to the best 10,000 Doctors and 4500 Hospitals in over 800

cities.• Our Healthcare and Health Insurance expertise.• One of the Fastest Claims settlement in the Industry• 50% No Claim Bonus in Optima Restore Health Plan- Highest in the

Industry.

• Cashless Authorization-Over 90% cashless authorization done within 2 hours of claim intimation

• Renewal Rate-Over 80% of our existing customers renew their policy every year

Weaknesses Lack of Product offering in the category of Sugar and Diabetic

patients. Only some of the products are performing well for the company. Lack of presence in Rural and semi-urban areas.

Opportunities Only 3% Market is Captured by Health Insurance Companies as a

whole, huge option to grow. As Diseases and therefore Medical Costs are on the rise, Mediclaim

has increasingly felt as a necessity. As Customers are increasingly becoming aware and educated about

the Health Insurance need and its importance, Scope of the company to grow gets bigger.

Threats More Companies are entering into the Health Insurance sector as

Government has increased the FDI limit from 26% to 49% for the insurance companies, Competition is on the rise.

Changes in the Government Policies like changes in the Service Tax structure (Changed from 10.3% in 2011-12 to 12.36% in 2012-13) affects on the premium charged for different products.

Cut Throat Competition from companies like Max Bupa, Star Health, ICICI Lombard and Bajaj Allianz.

Growth of Health Insurance in India

In 80s most of the hospitals in Indian government owned and treatment was free of cost.

The private medical care the need for health insurance was felt and various insurance companies introduced Mediclaim insurance as a product. According to recent news report health insurance continues fastest growing segment with annual growth rate of 25%.health insurance premium has also increase to Rs. 13345 crores in 2011-2012.

Table(s)

Percentage Growth

Competitive Analysis Among the Public Sector Undertakings (PSUs), United India

Insurance and National Insurance registered a strong growth of 33 per cent and 27 per cent respectively. Whereas New India recorded a growth of 17 per cent and Oriental has shown a decline of 1.6 per cent as compared to the previous year. Amongst the private players, ICICI Lombard has retained its top position with a market share of 11 per cent and growth of 12 per cent at the end of FY2011-12.

With the exception of Reliance General, IFFCO Tokio, Star Health & Allied Insurance, all the other companies recorded a growth during the period. Stand-alone Health Insurers Apollo Munich and Max Bupa have shown significant growth during the year. They registered a market share of 3 per cent and 1.00 per cent respectively at the end of FY2011-12.

Contd..

Comparison of Standalone Health Insurance companies Apollo Munich Health Insurance has shown a remarkable growth

of 147.21% in its premium collections during the financial year 2010-2011 as compared to last year.

The insurer has pocketed new business premiums of Rs 283.45 crores during April 2010 to March 2011 as compared to Rs 114.66 crores collected during the corresponding period last year.

Contd.. Apollo Munich Health Insurance, Star Health and Max

Bupa are the 3 standalone health insurers in the country. Max Bupa being the latest entrant started operations in March 2010 and has collected Rs 25.70 crores in new business premiums. 

Star Health & Allied Insurance on the other hand started its operations in 2006 and has gained a strong foothold in the health insurance segment. The company has recorded a growth of 29.87% since last year and collected premiums worth Rs 1248.88 crores in FY 2010-11 as compared to Rs 961.64 crores in FY 2009-10.

Apollo Munich Health Insurance has recently clocked Rs.700 crores in March 2013.

Bibliographywww.irda.gov.inwww.cppr.inwww.healthinsuranceindia.org www.ssrn.comwww.thehindu.comwww.isid.orgwww.apollomunichinsurance.comwww.timesofindia.com

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