Insurtech firm Vital aims to make health insurance plans affordable

Vital, a next-generation insurtech startup, has come up with a number of innovative offerings in the health insurance space. The company offers tailor-made, and comprehensive health plans designed specifically for every member's individual needs. It has also introduced the subscription-based payment model in which customers can pay premium amount every month. Established in 2020 by Rahul Kumar and Jayan Mathews, Vital also provides many other services including wellness and nutrition counselling through its tie up with many partners. The company has introduced the concept of small deductibles that helps customers to pay up to 60 per cent lower premium on their health insurance policies. The digital platform also assigns a dedicated care manager to every member for comprehending their needs and queries in real-time. In a conversation with the Bizz Buzz, company's Co-founder & Chief Product Officer,

Jayan Mathews said the insurtech startup is witnessing a lot of traction among consumers. The company that has raised $3 million this year from a clutch of investors and will raise further as it grows.

We work with Care Health Insurance for specific plans for our group of members. As Care Health Insurance is one of the best health insurance companies in India, our claim settlement ratios are always very good. Every customer who joins is assigned to a dedicated claims manager and the claims manager manages the whole customer process. As far as products are concerned, we have both individual and family health insurance plans

We have introduced the concept of a small deductible. By using the concept of a small deductible, a person can reduce the premium by up to 60%. So, a person today can take a Rs 20 lakh worth health insurance and pay premium that is equivalent to the premium of a 5 lakh health plan in the market without compromising on the cover. Secondly, we have introduced a monthly subscription-based payment, which is much simpler to use. We have also introduced something called benefits like diagnostics, full body health checkup, teleconsultation, pharmacy discounts, mental health and nutrition counselling, fitness pack among others. All these come under the monthly subscription payment

What are the differentiating features of Vital's products and services as compared to other insurtech platforms?

Our objective is to create a better health cover for India. To make a cover better, it has to be affordable. That (affordability) is the greatest challenge, people are facing. People have a perception that the health insurance product I am taking, will not be used by me. The thing that people buy a health insurance product when they are healthy. They may not use it for 10-15 years. So, they think, the product is not useful to them. Although that perception itself is false, they think the premium that they are paying is coming at a very high cost as the policy is not giving return to me immediately. Another thing which is coming to their mind is that the healthcare costs are not covered when they take treatment outside the hospital. So, we have come up with products which are better, which work when a person is healthy. So, the idea is to make an all-inclusive plan. We wanted to make an affordable and customised plan.

We have introduced the concept of a small deductible. By using the concept of a small deductible, a person can reduce the premium by up to 60 per cent. So, a person today can take a Rs 20 lakh worth health insurance and pay premium that is equivalent to the premium of a 5-year health plan in the market without compromising on the cover. Secondly, we have introduced a monthly subscription-based payment, which is much simpler to use. We have also introduced something called benefits like diagnostics, full body health checkup, teleconsultation, pharmacy discounts, mental health and nutrition counselling, fitness pack among others. All these come under the monthly subscription payment. When a person uses these plans, he or she earns points. These points can be used to pay the monthly premium. So, these differentiators put us in a good stead.

How technology is helping in the design of customised products?

As we gather data with more people joining our platform, the algorithm will get better. Currently, we are designing products on the basis of declaration by policy holders. We take into four-five factors like current health status, lifestyle, state of mind and genetic & hereditary makeup.

Subscription-based revenue model has picked up across industries in India. However, recent RBI guidelines on subscription-based payment have badly affected the industry. What are your thoughts on this aspect? Do you provide grace period to consumers in case he misses the payment schedule for the month?

Yes, 15 day grace period is given on our plans if there is a delay in the payment of the subscription amount. Also, we have to understand that subscription has its challenges. The churn rates in the subscription are slightly higher. Recent RBI guidelines on credit cards have also made it difficult. We are working around those challenges.

Are you working on launch of any new plans with your insurance partner? Will you throw some light on the claim settlement ratios?

We work with Care Health Insurance for specific plans for our group of members. As Care Health Insurance is one of the best health insurance companies in India, our claim settlement ratios are always very good. Every customer who joins is assigned to a dedicated claims manager and the claims manager manages the whole customer process. As far as products are concerned, we have both individual and family health insurance plans. We also have specific plans who have severe diabetes, heart conditions and pre-existing diseases. We have also worked out a very specific plan for our corporate clients. In the corporate segment, we focus on the SMEs.

How many customers do you have since inception? What kind of growth are you expecting going ahead?

We have around 8,000 lives covered under our various plans. We have seen good traction in our customer acquisition in the last six-seven months.

How big is your team now? You have recently raised $3 million as part of pre-series A round. Do you have any plans to raise more funds in the near future?

We are around 65 members now. As far as funding is concerned, we are adequately funded now. We will definitely raise money as we grow. We may look at raising funds of about $10 million in the series A round.

Can you throw some light on the revenue model of Vital?

Firstly, we are registered as a corporate agent. So, we get commissions as a corporate agent. We work with various partners for providing a range of services for which we get a premium.

When do you expect to be breakeven operationally? Can you give some timeline in this regard?

The way our products are designed, we hope to be breakeven in the next three years. As we have other products and services, the breakeven will be faster. We become positive when we sell an insurance product to the consumer. However, because of our expansion goals, the final breakeven will be much later. In terms of expansion, we hope to have 10,000 lives insured by end of December this year and around 50,000 lives insured by end of next year. We will also grow our team as we expand.