Mumbai, Apr 18: Bengaluru-based third-party insurance player Vidal Health is expecting over 25 per cent jump in revenue this fiscal at Rs 235 crore following the acquisition of the small rival Vipul Medcorp last month.
The merger will make Vidal the largest TPA (third-party administration) in terms of the number of lives covered at 3.2 million (2.2 million of its own and 1 million acquired from Vipul) and the second largest in terms of revenue after Medi Assist in an addressable health insurance market of Rs 40,000 crore in premium size, which is served by as many as 22 TPAs now.
“We closed FY21 with Rs 150 crore of topline. We see this crossing Rs 235 crore this fiscal, of which Rs 200 crore will be domestic income and the rest international revenue,” Girish Rao, chairman & managing director of Vidal Health Insurance TPA, told PTI.
Of the total income, Vidal’s international income was only 17-18 per cent last year, while the Gurugram-based Vipul had it around 20 per cent, Rao said, adding this should go up to 25 per cent or thereabout after the merger.
“The deal is good for us as we have been very weak in retail, as our focus has been crorporates (serving over 1,000 already), while Vipul was good in retail with 65 per cent of its income coming in from there. Similarly, we were weak in the North which is very large market, where Vipul has a strong presence, while our key markets are the South and West,” Rao said.
He added that however focus will continue to be group and corporates as that offer better margins — corproate fee is close to Rs 200 each life served while in retail it is around Rs 150 per life as this is mostly government business where fee is fixed at the bidding stage.
On average the operating margin varies from 10-12 per cent, he said.
Rao expects TPAs to play a bigger role going forward as the corporates and government are spending more on health insurance, especially given the pandemic.
He expects health insurance industry to clip at 20-25 per cent this year from 15-17 per cent in FY21.
On the international business, Rao said Vidal has presence in the UAE and Oman, which has been contributing around 17-18 per cent of topline income, while Vipul is very strong in Qatar and Oman getting around 25 per cent of its topline.
The combined entity will have around 25 per cent of revenue coming in from the Middle East now, as the TPA fee structure goes up to 4 per cent in certain cases and an average of 2 per cent of the billed amount.
Rao said, given the higher margin, he will increase the international business and will soon be entering Sri Lanka and is also looking at the US, the Philippines, Indonesia and Malaysia.
He said Vidal expects to complete the merger of Vipul Medcorp Insurance TPA with itself over the next two quarters.
Set up in 2002, Vidal also serves 135 million lives from the Ayushman Bharat-PMJAY and state health policies managed with over 12,000 hospitals and over 20,000 clinics. At 135 million, Vidal covers 60 per cent of state and central policy implementation. Combined with corporate clients it covers over 140 million lives. (PTI)
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