How this insurtech start-up allows broad health coverage at a lower premium

Health insurance can be a delicate product where one may not find the need for it when in good health, but its importance is magnified when a person is hospitalized.

Delhi-based insurtech startup Vital, founded in 2019, wants to bring a change in the functioning of this whole model, where the end consumer does not see this as an unnecessary expense while leading to a healthier lifestyle.

Founders Rahul kumar and Jayan mathews saw some shortcomings in the functioning of the health insurance industry in India and developed a digital platform to provide more personalized coverage to consumers.

Rahul is a serial entrepreneur and was a founding member of startups such as MakeMyTrip, TrulyMadly, and Expedia, while Jayan is a health insurance industry veteran with over 16 years of experience.

“The biggest challenge in the health insurance industry is that it takes a one-size-fits-all approach and it doesn’t work because each individual’s needs are different,” says Jayan.

The problem it solves

According to Jayan, the penetration of health insurance is still very low in the country and this is due to several factors. First, many consumers do not feel the need to purchase a health insurance product when they are in good health. Secondly, most of these coverages only cover the costs of hospitalization while the majority of expenses fall under the outpatient section like visits to the doctor, pharmacy, diagnostics, etc.

In addition, the consumer sees no financial return from paying a premium for health insurance and this only becomes important when one is hospitalized.

On the other hand, mutuals have created policies linked to specific illnesses requiring hospitalization, and do not cover expenses that are not the responsibility of the hospital.

The product

In this scenario, Vital has taken a more holistic approach by providing health insurance to consumers, where the coverage is broader than what the industry normally offers, while the premium is lower.

“We wanted to understand how we can come out with a product that isn’t just Medicare but more than that. I would like to use the term “health coverage,” which provides a health plan that includes both critical hospitalization as well as daily medical needs in a more efficient, cost-effective and valuable way, ”says Jayan.

Vital also brings other elements into its product, where it encourages and encourages consumers to adopt a healthier lifestyle. The objective being for health coverage to take into account three areas: hospitalization, day-to-day care needs and benefits or services for healthy living.

“We wanted to make the product affordable for the customer and we were the first to develop a subscription health plan,” says Jayan.

In addition, Vital has purchased a certain benefit structure in the plan so that the consumer can purchase the right amount of coverage at a lower cost. “This has reduced the cost of premiums by up to 60%,” explains Jayan.

The Vital co-founder says that while the average coverage offered by mainstream health insurance companies is in the Range Rs 3-5 lakh, in their wallet it is around Rs 15-20 lakh.

The startup has introduced other features in its product where health insurance coverage also supports regular health needs such as diagnostics, medical checks, teleconsultation, pharmacy referrals, etc.

Besides, it also introduced other benefits like nutrition counseling, fitness packs, mental health counseling, etc.

Partner-led approach

“We are working with partners to provide these benefits to customers and this whole package is made up of one subscription,” explains Jayan.

Vital has partnered with many players to provide these services such as Health Insurance is for the main product while others like Mfine, 1MG, Thyrocare and Cultfit offer comprehensive health coverage.

Today Vital claims to have more 7,000 clients, which consists of addressing them directly or through the organizations where they are employed.

A digital platform with a mobile-first approach, Vital claims to be able to create personalized customer profiles based on the data it receives.

“We actually want to create an interactive platform and give clients an updated health status and also tell them what they can do to improve their health. When the individual takes action to become healthier, there are rewards on bonuses and memberships, ”Jayan explains.

Vital increased $ 3 million in a pre-series A round funding in June of last year from BLinC Invest, Venture Catalyst, Survam Partners and angel investors.

The insurance segment has many other startups like Digit, Acko, Plum, and Turtlemint, and is a competitive area given the multibillion dollar market size.

Jayan says: “We stand out in the market where our solution has both an insurance and a well-being component. We thought Vital should go this route where insurance and other benefits are balanced.

As part of its future plans, Vital is keen to tap the SME segment as it believes it is an underserved market.

“SMEs have to buy health plans for their employees, which are designed for large companies and it is not beneficial for them. Our platform will allow them to choose the benefits they want and subscribe to them monthly, ”explains Jayan.

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