Apollo Hospitals to re-enter health insurance business

Apollo Hospitals plans to re-enter the health insurance business soon, a little more than three years after its first insurance product Apollo Munich was sold to erstwhile mortgage lender Housing Development Finance Corporation (HDFC).

“We have an understanding of insurance which we want to bring to the forefront and offer consumers a product so that they don’t have to worry about how to pay for treatment,” Suneeta Reddy, Managing Director, Apollo Hospitals Enterprise, told Business Today in a recent interaction.  

The Chennai-headquartered leading healthcare chain had first forayed into the space with the creation of Apollo Munich Health Insurance. In January 2020, HDFC completed the purchase of a majority stake in Apollo Munich Health Insurance for Rs 1,495.81 crore.  

For Apollo, the deal was seen to drive growth in its core business of hospitals and help pare the promoter's debt. It included a three-year non-compete clause which meant that Apollo could not re-enter the health insurance sector for three years.  

This time, the group plans to innovate on health insurance policies, including for out-patient offerings. As per its most recent investor presentation, the insurance offering will likely be housed under the group’s omnichannel digital health offering Apollo Healthco Limited which accounts for 40% of its consolidated revenues.  

The vertical includes the offline Apollo Pharmacy chain of 5,700-plus stores; as well as digital platform Apollo 24/7 which offers virtual doctor consultation and online diagnostic booking among other services to its 8.8 lakh daily users. Shobana Kamineni, Executive-Vice Chairperson, Apollo Hospitals Enterprise, is responsible for the vertical.  

Suneeta Reddy said the group has consciously separated its businesses into verticals and all of them have to move to the next level of innovation. The group reported a consolidated revenue of Rs 16,612 crore in FY23. It plans to commission an additional 2,860 beds at a cost of Rs 3,435 crore till FY27. “We are looking at projects beyond that, too, and have plans till 2033,” said Suneeta.  

HDFC had purchased 50.80 per cent stake of Apollo Hospitals Group in Apollo Munich for Rs 1,485.14 crore and 0.36 per cent shareholding of employees for Rs 10.67 crore. After the acquisition, Apollo Munich was merged with the former’s general insurance subsidiary — HDFC ERGO. HDFC has since merged with HDFC Bank.  

Apollo Hospitals Enterprise includes 71 hospitals, 5,600+ offline pharmacies, retail chain of nearly 3,000 clinics and specialty centres, as well as digital platform Apollo 247 that make it the largest omnichannel integrated healthcare network in India.