Cigna has officially launched operations in India. The insurer, however, faces steep challenges in the hard-to-penetrate Indian health market.
A partnership with India-based TTK Group that included investing $22 million into the new company, now called CignaTTK, made Cigna the first U.S. insurer to sell health products in India. Cigna anticipates substantial room for growth in the country since only 14 percent of India's total private health expenditure is covered by insurance, the Wall Street Journal reported. Plus, India is facing major public health challenges, including diabetes and hypertension.
"The continued rise in medical costs in India, coupled with a parallel increase in lifestyle-related diseases, there is an urgent need to upscale health insurance penetration in the country," Sandeep Patel, CEO of CignaTTK, told Economic Times.
But few insurers have successfully cracked the Indian market, primarily because the country only allows foreign companies to own up to a 26 percent stake in insurance firms. What's more, Indians often rely on their large families to take care of each other instead of buying health coverage, and they are widely skeptical of insurance companies.
After conducting extensive research to understand Indian consumer needs and culture, Cigna is focusing on consumer education. "As a result to our research, we have insights needed to develop and launch innovative products and services aimed towards specific individual and family health needs, with processes that are easy to experience," Patel said.
Cigna is starting operations with branches in six major metropolitan areas and hopes to open 25 branches by year's end. It will sell up to 10 health products that offer solutions like health and wellness programs to help members manage chronic conditions and make lifestyle changes, Business Standard reported.
Cigna's move is part of a bigger trend of insurers expanding internationally. For example, the Blue Cross and Blue Shield Association partnered with London-based healthcare group Bupa to create the largest provider network in the world, while UnitedHealth paid $4.9 billion to buy Brazil's largest health insurance company. And consultant company Mark Farrah Associates advised insurers that global expansion is one of the best steps to grow their membership and boost revenue.