00:00Strong, strong numbers. The question really is whether that is sustainable for the next
00:04four to six, even nine quarters ahead. What's your take?
00:09See, I think India is in a situation where we have a very diverse population
00:14and insurance penetration is in very early stages. And because there is no social security,
00:21health insurance or very weak social security, health insurance and life insurance are almost
00:26essential for the middle class. So you have a massive room for growth. We have now delivered
00:32for our health and term business. We are now we've done 15 quarters of above 45 percent growth.
00:41Now, that doesn't happen normally, right, because it's a sustained growth that's been going on.
00:46I think 35 percent is a good outlook for the next three, four years.
00:53EBITDA margin jumping about seven percent. What levers do you think you can tap to get to double
00:59digits? See, that will happen automatically because we have a the way our business is structured is we
01:07get paid a small amount upfront and then we get paid every year for the life of the policy. And
01:13so
01:14as we've been growing very fast, our first year has been very large. But now the renewals have started
01:22to catch up and the renewals have about 85 percent margins, whereas the fresh business just about
01:27breaks even. And thus, as our mix starts to move towards renewals, we are now going to have over the
01:34next 24 months, we'll have more than 50 percent growth on renewals on a CAGR basis. So that piece will
01:41really start to deliver higher and higher profits. It's exactly as predicted. So there's no surprise
01:46here. Yeah.
01:49So there is a lot of confidence going forward. In fact, for you, there's a lot of clarity as well.
01:54How are you looking at growth per se? Is it mainly inorganic?
02:01I think it's mostly organic, I would say, simply because we are a very, very large country.
02:09Just think about it, right? The U.S. has, what, about a trillion dollars plus of health insurance?
02:16India has about 10 billion. That is 1 percent of the U.S.
02:21I know we are very different on per capita or whatever, GDP, etc. But we're not that different
02:27also. And, you know, at some point we have 1.4 billion people who need health cover.
02:32So the health care and the health insurance have to grow. The second part is health care
02:39and health insurance go together. Today, already 40 percent or 35 to 40 percent of hospitals
02:45billing is coming from insurance. What do you think it would be? You know, how do you afford
02:50hospitals in India? You know, corporate hospitals. Either you are rich or you have a government job
02:55or you essentially have insurance. There's no other way to afford, you know, high quality
03:01hospitals. And clearly, out of those, insurance is the one that's going to be the lever for expanding
03:07health care into India. So I do believe we have a very long runway and health care and health
03:13insurance are sort of tied to each other.
03:18So as you think about growth, though, wouldn't acquisitions make sense? I mean, wouldn't,
03:24you know, a tech led M&A boost your moat as you go forward?
03:32When you think about the development of this market and when we look into it, there isn't
03:37too much to acquire in the way we think about it. See, when we started this business, there
03:42was almost no health insurance and term insurance. Our focus clearly is social security, health
03:48and protection, health insurance and life insurance. In that, there is no large distributor.
03:55We are pretty much the only one. So who do you like? You know, we we keep looking, but we
04:02don't have anybody that we could acquire who could make even a one percent impact on our volume.
04:08And so we are quite in a race of our own.
04:13You alluded to how the penetration rate for insurance is pretty low compared to the global
04:18average. I'm just wondering what can be done to improve that? What will it take?
04:24It is a slow process. There is no magic bullet that's going to change this. What we need is
04:30confidence in our claims. See, why do people not buy? People are aware that health care costs are very
04:35high and the cost of losing a life is very expensive and their middle class, you know,
04:42will family will be in very big difficulty if those events happen. But they don't buy insurance.
04:48Why don't they buy insurance? They don't have confidence in the product. They believe at the
04:52point of claims, they will be made to run from pillar to post. That is the fundamental problem
04:57we are solving, that we are making sure. And that's, you know, you mentioned we are in 100 cities.
05:01We are actually in 300 cities. And we have people present there to help you at the point of claims
05:06because it's not, unfortunately, it's not a data or tech problem. It is an intention problem.
05:13Basically, the hospitals would like to charge more, the insurers would like to pay less,
05:16and it becomes a conflict. And somebody has to manage that conflict, somebody who has a say in it,
05:22somebody who's large enough in the insurance ecosystem who can influence it. So that is the
05:26role we play. And thus we impart confidence in consumers to buy more and more. And that is one
05:32of the reasons why we're getting into hospitals, because we're saying, listen, to provide a quality
05:37of service, we need to pretty much have our own hospitals. And I guess as you provide that quality
05:42of service, Indians will buy in larger and larger numbers. There's no doubt about it, because they
05:47don't have an option, right? And I'm not saying that in a mean way. It's just reality. I've come from
05:50the
05:51same background. And we don't have an option. How else do we afford health, you know, hospitals
05:56where the cost is, let's say, $1,000 a night or $800 a night? You know, we don't have that
06:01kind
06:02of money. Right. Ashish, before we let you go, just a question on QIP. Will you be returning
06:09to QIP anytime soon? The market has, after all, stabilized.
06:15I don't think we would return to that in a hurry. We don't have any such plans, you know. So
06:20we,
06:21we, you know, if you really think about it, at this point, we are just building our company
06:25for the next three, four years, built into a much larger organization. And strategically,
06:30we are well positioned. We are building out hospitals that is going to cost us a bit of
06:34money. But we are a 25, 26% shareholder. So there will be other partners also will be chipping
06:41in there. But that is that is our cash consumption. And otherwise, we will keep generating money from
06:46the insurance business.
Comments