Private insurance-provider Max India has entered into a joint venture agreement with the UK-based British United Provident Fund or BUPA to set up a standalone health insurance company by name Max Bupa Health Insurance Ltd., media reported.
As per agreement, the joint venture partner Bupa will hold 26% of the stake in the joint venture company and Max Bupa Health Insurance will hold the rest. Bupa has the option and right to increase its stake, in case of change in regulations and permit a higher foreign direct investment
Max India Chairman, Analjit Singh, said in a statement that the initial share capital of the JV would be Rs.100 crores and the company would roll out its first product in 12 to 18 months.
Outpatient consulting and diagnostics insurance for individuals is currently not present in India. One needs to be a part of a company or group. "We will fill in this gap and will structure products to cater to individual's need," said Singh added.
Max Bupa will be the third standalone health insurance company after Apollo DKV and Star Health Insurance. The company will appoint its Chief Executive Officer in the next 3 to 6 months, the report said.
To begin with, individuals in the National Capital Region (NCR) will have access to the services of Max Bupa, as the company plans to roll out its product in a phased manner starting with the NCR. The JV plans to consider all possibilities like individual, retail and group insurance and is targeting one million customers initially.
The company has expertise in healthcare facilities, which, at present, has a customer base of 2.7 million, he added.
Pointing out the favorable demographics of India, Director of Max India, Anuroop Singh, reportedly said the country has huge potential for health insurance, as the average age is expected to be 29 years in the next 12 years with people getting more spending power.
Regarding Bupa's India foray, Chief Executive Ray King, said, "There are very few markets that can match India's potential in the segment. We will structure products that suit the market requirement."
At the BSE, Max India closed Friday's trading at Rs.199.90, down by Rs.8.15 or 3.92% from the previous close.
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