Re-insurance firm Swiss Re is selling its entire 26% stake in third party administration firm TTK Healthcare TPA Private Limited (TTKHTPA) to Vidal Healthcare Services, so that it can focus on the re-insurance business in India.

The transaction is subject to regulatory approval.

Through this deal, Vidal Healthcare Services Private Limited will capitalise on the opportunities arising from the healthcare sector.

Esatablished in 2002 and part of the TTK group, Bangalore-based TTKHTPA, which was formerly known as TTK Healthcare Services Pvt Ltd provides third party administration (TPA) services relating to Indian medical and health insurance policies.

Vidal was founded and majority-owned by Girish Rao. As the co-founder and Managing Director of TTKHTPA from 2002 to 2007, Girish Rao was instrumental in building TTKHTPA into one of India's leading TPA firms.

Transaction Reference: BS

Zurich based - Swiss Reinsurance is world's second largest insurer. It acquired GE insurance Solutions in 2006. It operates in more than 26 countries. It sells reinsurance for property, casualty, life and health business.

In India, Swiss Re has been present since 1998. It established Swiss Re Shared Services (India) Private Limited in Bangalore in 2000 and opened a service company in Mumbai in 2002 to provide support for Swiss Re Zurich's reinsurance activities.

Swiss Re acquired 26% stake in TTKHTPA in December 2006 from India Value Funds Advisors (IVF). India Value Fund invested in TTK Healthcare Services in December 2004.

Earlier, it was believed that Anil Ambani Group-promoted Reliance Life was in discussions to bring in Swiss Re as a foreign partner in the company by selling 26% stake to Swiss Re.

TPAs, typically stationed in hospitals, are entities to which insurers outsource servicing of health claims. Once insurance companies issue the policy, most of the back office work, including networking with healthcare providers, are undertaken by TPAs. In return, they get around 5% of the premium as fees. TPAs were introduced by the IRDA in 2001-02 to act as intermediaries under a contract from insurance companies.

Recently TPAs have complained to the Competition Commission of India (CCI) against four government-owned insurance companies. They have not like the idea of four public sector insurance companies setting up their own TPAs and forming a cartel and abusing their dominant market position in planning a TPA outfit of their own.

The four PSU insurers - National Insurance Company, New India Assurance, Oriental Insurance and United India Insurance have come together under the General Insurers (Public Sector) Association (GIPSA) to promote a captive TPA. They have sought to partner an existing TPA who will hold a 26% stake in the joint venture.

TPAs have also demanded 10% of the premium instead of the present 5.25% and have threatened to boycott the public sector insurance companies and stop cashless and other services for the general public if their demands are not met.

According to PSU insurers, inefficient service delivery by the existing 27 TPAs have saddled them with a commercially unviable claims settlement ratio of 115%, and forming a common TPA was one way of cutting costs.

Private insurance companies such as ICICI Lombard, Bajaj Allianz, Star Health and Max Bupa have already set up their own TPAs.

Previous Article

Ind-Swift Lab To Raise Rs 5oo Cr

Next Article

GVK Power To Raise R1200Cr

All Comments

Readers' Recommendations

1

September 08, 2010 11:02 AM

You know what You guys should stop complaining because, one the health care we have now isnt as good as it was supposed to be. also the law has just been signed so give it some time. so if u want to say u have the right to choose tell that to ur congress men or state official. If you do not have insurance and need one You can find full medical coverage at the lowest price by calling 877-882-4740 or check http://bit.ly/9 fDY7U If you have health insurance and do not care about cost just be happy it and trust me you are not going to loose anything! - Posted by keyshawn Recommended by 0 Readers