Chennai-based TTK Group, a diversified home appliances-to-healthcare product enterprise known for its popular household brands like Prestige, has inked a joint-venture with US-based health service provider Cigna to sell a range of health insurance products across India, the company has said in a statement.
The financial details of the agreement are not disclosed.
Cigna and TTK are currently seeking approval from India’s Insurance Regulatory and Development Authority and plan to submit a comprehensive filing early next year. But a full licence to operate is not expected until 2013, the statement adds.
Founded in 1928 and headquartered in Chennai & Bangalore, Rs 1,500-crore TTK Group operates multiple businesses and sells everything from cookware to pharmaceuticals. Under the deal, Cigna expects to leverage its direct-to-consumer marketing capabilities, which include a combination of telemarketing, online and direct response television. Combined with TTK’s pan-India retail reach, products will be marketed across geographies and customer segments, including those in rural areas.
“TTK brings a strong brand, local market knowledge and proven strategies for distribution,” William L. Atwell, president of Cigna International, commented on the joint venture.
“Cigna has proven capabilities to improve the health and wellness of consumers, and we share with Cigna a deep commitment to serve the people of India,” said T T Jagannathan, group chairman of TTK.
Shares of TTK Healthcare were trading at Rs 387.50 a unit at 2:41 pm on the BSE, down 2.80 per cent from the previous close.
Incidentally, in September 2010, Swiss Re sold off its entire 26 per cent stake in third party administration firm TTK Healthcare to Vidal Healthcare Services for an undisclosed sum.
Incorporated in 1792, Cigna Corporation is based in Bloomfield, Connecticut. The company operates as a health service organisation and provides insurance and related products and services in the USA and also internationally, through its subsidiaries.
Earlier, Cigna had reportedly negotiated with few government-owned banks to form an Indian JV and foray into the health insurance sector. However, the talks didn’t fructify.
TTK-Cigna will be up against specialised health insurance firms such as Apollo-DKV, Max-Bupa and Star Allied Health Insurance besides various general insurance firms who also have it as one of the product offerings.
Indian health insurance market is expected to grow at a CAGR of 43 per cent between 2011 and 2015, with the market penetration rising threefold during this time period, according to Technopak Advisors. India’s low health insurance penetration, which stands at only 15 per cent of the total population, is believed to be one of the key drivers of this industry.
Key factors driving the growth in this space include increasing awareness regarding health insurance, rising healthcare costs, supporting demographic profiles (as more Indians are ageing), de-tariffing of the general insurance industry and rationalisation of premium rates.