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New-age Healthcare Start-ups are Disrupting the Insurance Space. Here’s How

New-age Healthcare Start-ups are Disrupting the Insurance Space. Here’s How

Riding on innovations such as subscription-based and bite-sized plans, new-age healthcare start-ups are disrupting India's insurance space

Riding on innovations such as subscription-based and bite-sized plans, new-age healthcare start-ups are disrupting India's insurance space Riding on innovations such as subscription-based and bite-sized plans, new-age healthcare start-ups are disrupting India's insurance space

For Assam-based Bhavjot Kaur, 34, the motivation to innovate on the healthcare experience in India came from personal suffering. Her father was diagnosed with diabetes in 2006 and even after months of hospitalisation, they could not save him; he passed away in 2010. Not only did the ordeal strain her family emotionally, but also drained their finances. “We did not have any health insurance to take care of the financial impact. So, the family was emotionally and financially torn,” she says. The incident was a moment of realisation for Kaur, an IIT Roorkee student then. It showed her how broken healthcare was in India. Eight years later, along with her husband, orthopaedic surgeon Suraj Baliga, she set up Clinikk. “For me, it was important that I work on something that changed how healthcare is experienced in this country. That’s the motivation behind our company,” says Kaur.

Clinikk operates 16 primary care centres across Bengaluru, and two in Hyderabad, known as Clinikk Health Hubs. It offers virtual consultation, unlimited access to doctors, medicines, diagnostics and specialist consultation, all in exchange for a subscription fee. Till now, it has partnered with Hero MotoCorp and Vodafone, tech platforms like Ola, Rapido and Shadowfax and the Government of Goa to serve over 2 million customers.

All these services are available in just one plan—something unheard of in a health plan, but these new-age health insurance start-ups—that call themselves managed-care service providers—have got you covered. And, while some don’t have a direct licence from the regulators yet, these firms are gaining traction as they transform the space with innovations like subscription-based and bite-sized plans. For instance, Onsurity offers plans exclusively for SMEs. The idea was born when Founders Yogesh Agarwal and Kulin Shah realised that there were no SME-focussed insurers in the country. “SMEs are underserved. When we talk about product offering and product servicing by the traditional insurers, they generally cater to retail customers. That’s how we started building Onsurity,” says Agarwal, who is also the CEO.

An Emerging Sector

According to a recent report by consultancy firm RedSeer, India’s insurance market is poised to grow to $222 billion by FY26 from $117 billion in FY21, driven by a growing middle class, increasing digital penetration and new online distribution models.

As these start-ups innovate, experts divide them into three categories: One, those offering employee insurance and wellness plans, such as Plum and Nova Benefits. Second, retail-focussed companies that offer OPD subscription-based plans, like Clinikk and Kenko Health. Third are embedded insurance providers such as Zopper that democratise access to insurance.

Riding on this innovation wave is Bengaluru-based Kenko Health that offers instant benefit on all medical bills, including out-of-pocket expenses for medicines, lab tests, doctor consultations, emergency services, at-home care, mental health and the like. “Our subscribers don’t rely on tedious paperwork, third-party agents or different apps to access healthcare services. They get all these benefits on a single app. From an operational perspective, tech helps us deliver faster benefits transfer and proof-processing, and better risk assessment with affordable pricing,” says Co-founder Aniruddha Sen. The common thread among these start-ups is strategy: they break down large premiums into smaller payments, making the product affordable and accessible. Consumers want to try out a service before committing, and it means greater flexibility and control over services without burning a hole in their pockets.

“Currently there’s a lot of traction for the idea of group health insurance being sold to smaller companies who are not targeted [by traditional insurers]. It’s a good idea because group health [insurance] was largely in the domain of large brokers, and for them it wasn’t efficient to cater to companies that have 10-100 employees,” says Shanai Ghosh, CEO and Executive Director at Edelweiss General Insurance. Their growing popularity can be observed in funding. Recently, Onsurity raised $16 million in a Series A round led by Quona Capital, alongside existing investors Nexus Venture Partners. Clinikk, too, raised $6.4 million in seed and pre-Series A round led by MassMutual Ventures, while Kenko Health raised $12 million as part of its Series A round led by Sequoia Capital India.

Regulatory hurdles

The rising interest in subscription-based insurance models makes the sector a high-growth market. But, there is the hurdle of clear regulations. The Insurance Regulatory and Development Authority of India (IRDAI) provides two types of licences: One is a distribution licence and the other is the tough- to-get insurer (manufacturing) licence. “There are two types of risks in forming an insurance company. First is the capital risk that requires insurance companies to set aside capital to meet a policyholder’s claims. Then there are regulatory risks that are required to be met to protect the interests of policyholders,” explains Abhishek Poddar, Co-founder and CEO of Plum, an employee benefits-focussed firm.

Hence, while companies like Plum and Nova Benefits are licensed distributors under IRDAI’s ambit, players like Kenko and Onsurity are not under the direct regulatory purview of IRDAI. It is for this reason that on April 13 this year the regulator issued a notice regarding Even Healthcare that offers health plans through monthly subscriptions. It advised people to note that they are dealing with the start-up at their own risk, and clarified that only IRDAI-registered insurance companies, or their appointed agents and intermediaries, can sell insurance products. The IRDAI did not respond to a request for comment.

Experts say that the space must be closely watched as it involves the collection of money from the public. Bhabatosh Mishra, Director of Underwriting and Claims at Niva Bupa Health Insurance, says, “The collection of money is a matter not just under insurance regulatory purview, it could be under the purview of the banking regulator as well. In anything of this nature where public money is collected, we need some safety net.”

Onsurity’s Agarwal says: “As a healthcare membership platform, we have insurance companies providing us a Group Master Policy that is governed by IRDAI guidelines. This is similar to how companies like travel portals and banks provide bundled insurance with their offerings like tickets, or credit/debit cards. Similarly, our membership comes with group health insurance”.

“IRDAI approves insurance companies. We’re much more than that. But we do partner with IRDAI-approved companies to provide healthcare benefits with our plans,” concurs Sen of Kenko Health.

“We have a managed-care model with a strong grievance redressal mechanism. And since we are an early-stage start-up, we take customer grievances very seriously. Also, IRDAI is thinking about creating a regulatory framework for managed-care models. We are working with IRDAI-approved insurers under its group insurance ambit where our subscribers can opt into a health insurance plan that they get as a group cover,” says Clinikk’s Kaur.

These new-age healthcare start-ups are bridging the gaps in the sector. However, there is a need for tighter regulations so that the interests of subscribers stay protected.